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Bad economy leads to 25 percent increase in NY workers’ comp fraud

Posted on Sep 30, 2010

The still-struggling New York economy is causing an uptick in NY workers’ compensation fraud cases, according to investigators. Workers appear to be under increased pressure to make money any way they can, even if it involves cheating the workers’ comp system.

NY fraud investigators have found that more and more workers are claiming to be unable to work so they can continue to receive benefits, all while they accept a new job. It is illegal for injured workers to claim that they are unable to work yet take on a job anyway, without notifying authorities.

One common kind of fraud involves workers receiving workers’ comp benefits who start a home-based business. Because it is so easy to set up a home-based business, many workers think they will avoid getting caught – or they don’t think what they are doing is wrong.

Working a second job while collecting workers’ comp benefits is known as “double dipping”, and can lead to jail time, probation, and workers usually have to pay back what they were given. Experts estimate that over the last year fraud has increased 25 percent, and from 2008 to 2009 arrests for this type of fraud went up 21 percent.

Employees are not the only ones who are cheating the system more often these days. Employers are also committing fraud, doing everything from misclassifying workers to committing claim fraud.