Workers facing the prospect of a layoff amid a downturn in the economy will sometimes file a workers’ compensation claim because they’ll get more money and the benefits last longer than if they had filed for unemployment insurance.
Moreover, the frequency of workers’ compensation claims tends to increase as the economy worsens.
None of the above, of course, is ethical or legal, but it doesn’t stop people from trying to scam the system.
The COVID-19 pandemic is expected to drive up fraudulent claims, especially as more state legislatures try to make it easier for employees to file workers’ compensation claims for COVID-19 under the presumption they had caught the virus at work.
There are factors during downturns, of course, that are responsible for injuries and legitimate workers’ compensation claims. Among them:
- Workplace conditions may deteriorate because employers fail to replace older, less-safe equipment, leading to a jump in injuries.
- Employees who keep their jobs are asked to work longer shifts, leading to injuries among overworked, and perhaps under-trained, employees.
Regardless, we expect to see a rise in fraud in the coming months.
There will no doubt be fewer workers’ compensation claims, but it’s important to keep a closer eye than usual on the claims that roll in for instances of fraud.