Consequences of Filing a Fraudulent Workers’ Compensation Claim

Think twice before filing a false workers’ compensation claim in California. Filing a fraudulent claim to recover workers’ compensation benefits can have both civil and criminal consequences. The California state government and your employer may not hesitate to press charges and file civil claims against you. If you are accused of workers’ compensation fraud in California it is important to contact an experienced worker’s compensation defense attorney. Hiring an attorney can improve your chances of a positive outcome.

What is Worker’s Compensation?

California requires that all employers carry workers’ compensation insurance. This insurance is used in case an employee becomes sick or injured on the job. Injured or sick employees can file a claim to recover workers’ compensation benefits to help pay for:

  1. Medical expenses;
  2. Temporary disability;
  3. Permanent disability;
  4. Vocational Rehabilitation;
  5. Death benefits; and/or
  6. Other compensable consequences of a work-related injury or illness.

California operates under a no-fault system. This means that employees can recover compensation without proving that the accident or injury was someone else’s fault. Workers’ compensation benefits are paid regardless of who is at fault. Employees who collect workers’ compensation benefits give up the right to sue their employer. Workers may not pursue damages through a personal injury lawsuit if they are collecting these benefits.

Since California operates under a no-fault system there is a high potential for abuse. Filing a false workers’ compensation claim and collecting benefits without actually needing them is a crime. You can face both civil and criminal consequences for your actions.

Civil Consequences for Worker’s Compensation Fraud

Employers in California may seek civil damages from an employee for filing a false workers’ compensation claim. California Labor Code Section 3820 explains that “the Legislature finds and declares that the addition of civil money penalties will provide necessary enforcement flexibility.” California decided that civil penalties were “necessary” to “combat the fraud and abuse that is rampant in the workers’ compensation system.”

Workers’ compensation fraud has become commonplace. It is so common that the state of California thought it was necessary to impose civil consequences. If you are found guilty of workers’ compensation fraud under Labor Code Section 3820, penalties can include:

  1. A civil fine of between $4,000 and $10,000 for each fraudulent workers’ compensation claim, and
  2. A civil fine of up to three times the amount of the medical treatment expenses paid by a workers’ compensation insurer.
  3. A criminal conviction for workers’ compensation fraud will make the civil consequences worse. You may be required to pay up to $4,000 more per false claim in your civil suit if you are convicted.

Criminal Consequences for Worker’s Compensation Fraud

What are the criminal consequences for workers’ compensation fraud? In California, the primary statute under which workers’ compensation fraud is charged is the False and Fraudulent Claims Act. The law, which is found in Insurance Code 1871.4, makes it a crime to:

  1. Knowingly make a false or fraudulent statement or material representation to recover insurance benefits;
  2. Knowingly present a false or fraudulent written or oral statement in support of (or against) a claim to recover insurance benefits; or
  3. Knowingly assist, aid, conspire with, or solicit a person to recover insurance benefits without cause.

The False and Fraudulent Claims Act applies to several types of insurance compensation. Workers’ compensation benefits are a type of insurance. When you make a fraudulent claim, or when you provide fraudulent evidence, you will have violated this law.

A violation of the False and Fraudulent Claims Act can be charged as a misdemeanor or a felony offense. The charges will depend on the financial value of the fraudulent claims and your existing criminal record.

A misdemeanor conviction for workers’ compensation fraud can be punished by:

  1. One year in county jail;
  2. A fine of $150,000 or two times the amount of the fraudulent claim, whichever is greater; and
  3. Restitution to the employer and/or insurance company victimized by the fraud.

A felony conviction for workers’ compensation fraud can be punished by:

  1. Two to five years in California state prison;
  2. A fine of $150,000 or two times the amount of the fraudulent claim, whichever is greater; and
  3. Restitution to the employer and/or insurance company victimized by the fraud.

Fighting Worker’s Compensation Fraud Charges in California

If you have been accused of committing workers’ compensation fraud in California it is important to speak with an attorney as soon as possible. You can face serious civil and criminal consequences for filing a fraudulent claim. In addition to possible jail time and monetary fines, fraudulent claims could result in the loss of your job.

Other employers who are aware of your history of filing fake workers’ compensation claims may not want to employ you.  Hiring an attorney to represent you can reduce the potential consequences you face.

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