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Cheating The Workers’ Compensation System Doesn’t Pay

There are many ways people commit fraud. In the workers’ compensation system fraud is committed by employees, medical professionals and in some cases the employers themselves. It is the employer who has to pay insurance premiums to cover workers’ compensation benefits. The higher the insurance premiums, the less money available for other areas of the budget. This may reduce profits or place a financial burden on some small businesses. As a result, some business owners try to find ways to reduce insurance premiums, some of which are not legal.

Insurance premiums for workers’ compensation benefits are calculated based on the number of employees as well as their “classification”. Certain occupations pose an increased risk of injury, therefore the job description is very important when determining accurate workers’ compensation insurance premiums.

A recent article published on ClaimsJournal.com provides details on a case involving a New York construction company executive charged with under-reporting payroll. It is alleged that Carlos Ramos used a check cashing facility to facilitate an “off-the-books” payroll which reduced the amount of payments to workers’ compensation insurance by close to $200,000 over a four year period. From July of 2003 through July of 2007, Ramos allegedly under-reported payroll to the New York State Insurance Fund. Ramos now faces multiple felony as a result of his attempts to avoid the premium owed for workers’ compensation insurance.

Employers are urged to learn how acts of fraud result in higher insurance premiums across the board. Anyone considering these fraudulent activity is reminded that eventually a higher price will be paid by all for the actions of a few. In addition to higher insurance premiums, hefty fines and other legal consequences will eventually catch up with fraudsters.

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