Most people have heard about the woman who sued McDonald’s because her coffee was too hot. This case is often used by critics as an example of what happens when “lawyers run amok.”
However, few people know that the resulting lawsuit demonstrated that McDonald’s did indeed know that they were serving coffee too hot, and the injured individual suffered serious third degree burns that required skin grafts.
Furthermore, McDonald’s had received over 700 complaints prior to being sued, yet did not change their policies.
We bring up this renowned case in order to discuss fraud in the workers’ compensation sphere.
Types of workers’ compensation fraud
Many people assume that the only fraud that occurs in workers’ compensation is either people faking injuries or injured individuals who are trying to pin an off-the-job injury on workers’ compensation. But this is clearly not the case.
Fraud that takes place in the workers’ compensation system is most commonly perpetrated by individuals or businesses who fail to obtain workers’ compensation insurance.
If a worker gets hurt on the job and their company did not have workers’ compensation insurance (even though they should have), the injured worker could be out of luck. They still may be bound by the workers’ compensation system—meaning they can’t sue their employer for a liability claim—and there may be nothing left to recover.
The employer will be subject to penalties and fines, and will be responsible to pay the injured worker’s medical bills and lost wages under the Act. But quite frankly, many of these companies just close up shop, leaving the injured worker in the cold.
Another type of fraud that takes place by employers is when they provide “fake coverage” to general contractors. The coverage that they show as proof to general contractors might be legitimate, but it may only cover office workers of the sub-contractor—not the laborers that they hire. In turn, this may shift the burden of workers’ compensation to the general contractor and result in a very messy coverage dispute.
Fraud can also occur when an employer tries to shuttle employees from one company to another without the individual’s knowledge in an attempt to stay below the statutory requirements for the number of employees.
Fighting workers’ compensation fraud
Some states are beginning to fight workers’ compensation fraud; however, Georgia has yet to join this movement. That said, we feel confident that our state will soon join the party.
Reducing fraud in the workers’ compensation system benefits ALL parties—injured workers included—and this crackdown is long overdue.