Keeping Your Worker Comp Costs in Check

Tam Harbert -- Expert Business Source, 2/10/2007 12:02:00 PM

Because of the nature of the business and the workforce, the construction industry is a frequent target of worker compensation claims – both legitimate cases and those without merit.

Small contractors in particular are vulnerable to claims, since they often rely on part-time or seasonal workers – a frequent source of fraudulent injury filings, according to Garry Bradford, president and CEO of Unique Staffing, a professional employer organization in Corpus Christi, Texas, that specializes in the construction industry. Small contractors also may lack the resources to put the proper safety programs in place and educate their employees about safety, he adds.

Although it doesn’t keep statistics by industry, the Coalition Against Insurance Fraud (CAIF) estimates that workers’ comp fraud amounts to $6 billion a year. That figure includes fraud by both workers and employers, according to James Quiggle, director of communications for the non-profit organization.

The most common symptom of fraud is the “Monday morning” injury. “They’ll hurt themselves at home over the weekend, come to work on Monday, and within an hour they are claiming an injury,” says Bradford. Other red flags include:

• The worker avoids medical treatment.
• There are no witnesses to the injury.
• The injury occurs just before a strike, layoff or disciplinary action.
• The worker has a history of injury claims.
• The worker changes doctors frequently.

To lower the risk of a fraudulent claim, experts offer the following tips:

• Show that you care.
  Small firms should make sure their workers feel appreciated and pay special attention to any and all injuries, says Bradford. In other words, try to avoid giving workers a reason to become disgruntled. “The more unhappy and unmotivated workers are, the more likely they are to vent their frustrations on their employer through fraudulent claims,” says Quiggle.

• Educate and reinforce.
  Even on a small budget, companies can emphasize safety and even reward safe work practices. “Maybe you give a small bonus to everyone who is doing a good job on safety,” says Bradford.

• Check a job candidate’s background and references carefully.
  A history of short-term employment or a lack of health coverage are red flags for potential insurance claims.

One other tip: If you suspect fraud, don’t be averse to hiring a detective to follow the employee’s off-hour activities, Bradford says. He cites the case of a worker who claimed a back injury so severe that he wore a brace and arrived at court in an ambulance. However, a detective had filmed the worker rebuilding his trailer house and lifting heavy objects, including a lawn mower. When the film was shown in court, Bradford recalls, “I don’t know which of them got out of there quicker – the ‘injured’ worker or his lawyer.”

Tam Harbert is a freelance writer based in Rockville, Md.