Workers’ Comp Fraud Penalties

Workers’ compensation fraud is a serious offense that undermines the integrity of systems designed to support employees injured on the job. The legal consequences of committing such fraud are severe in Arkansas and Missouri.

If you commit workers’ comp fraud, jail time is a strong possibility. It’s a criminal act that not only impacts the financial health of businesses but unfairly burdens honest workers and employers who adhere to the law.

This post will explain examples of what constitutes workers’ compensation fraud and applicable penalties in Arkansas and Missouri. 

We aim to highlight the importance of abiding by workers’ compensation laws and the risks of committing fraud in workers’ comp claims. From restitution and heavy fines to imprisonment, committing workers’ compensation fraud can derail a person’s entire future.

Penalties in Arkansas and Missouri reflect a stringent stance against fraud. Both employees and employers must recognize the gravity of these offenses, as criminal charges are not limited to employees who break the law. 

What Constitutes Workers’ Compensation Fraud?

Workers’ compensation fraud occurs when an individual deliberately misrepresents the truth to obtain or deny compensation benefits. Employees, employers, or even healthcare providers can commit workers’ compensation fraud.

For employees, it often involves fabricating or exaggerating an injury or claiming a non-work-related injury as a work-related one. Similarly, returning to work while still collecting benefits without reporting the income or faking an inability to work are also fraudulent acts.

On the other hand, employers may commit fraud by underreporting their payroll or misclassifying employees as independent contractors to lower their workers’ compensation premiums. Furthermore, healthcare providers can engage in fraud by billing for services not rendered or by inflating the costs of services provided to injured workers. Each of these actions constitutes a deliberate attempt to manipulate the system for personal gain or to avoid financial responsibility, making them fraudulent and punishable under the law.

Workers’ Compensation Investigations and What They Look for 

When you file a workers’ compensation claim, it’s standard for the insurance company to investigate to verify the legitimacy of your claim. That means they might even talk to people in your life, including family, friends, or neighbors.

These investigations are meticulous as they look for any hint of fraudulent activity. Investigators will examine workplace surveillance footage, cross-check your medical records, and get witness statements. Expect your social media to be scrutinized, too. The goal is to verify the claim’s authenticity to avoid paying out on a fraudulent claim. 

How Long Can You Get in Jail for Fraud?

Workers’ comp fraud jail time varies depending on the state and offense. Here’s a look at potential offenses in both Missouri and Arkansas. 

Penalties for Workers’ Compensation Fraud in Missouri

A first offense of workers’ compensation fraud in Missouri is classified as a Class E felony. Offenders may face a $10,000 fine or double the value of the fraudulently obtained amount, whichever is greater, and up to four years in prison. A second offense is a Class D felony, carrying similar fines but with a potential jail sentence of up to seven years.

Moreover, employers and insurance companies are not exempt from these penalties either. They can be held liable for refusing to comply with workers’ compensation obligations, providing invalid certificates of insurance, or making false statements to discourage employees from filing claims. These actions can result in felony charges and civil liabilities.

Penalties for Workers’ Compensation Fraud in Arkansas

Arkansas treats misrepresentation under its workers’ compensation law as a Class D felony. Individuals convicted of workers’ compensation fraud in Arkansas face penalties that include restitution, fines of up to $10,000, and imprisonment for up to six years. This firm stance reflects the state’s commitment to maintaining the integrity of its workers’ compensation system.

In addition to financial penalties and incarceration, individuals in Arkansas providing false testimony in workers’ compensation cases and fraud investigations can also be prosecuted for perjury. 

Contact a Workers’ Compensation Lawyer at Cottrell Law Office

If you’re struggling to get benefits for a legitimate workers’ compensation claim, Cottrell Law Office stands ready to help. We know navigating the workers’ compensation system can be frustrating and confusing. If you’re dealing with a workplace injury, you don’t need the added stress of the legal system. That’s why we’ve dedicated ourselves to helping injured victims in need. 

At Cottrell Law Office, we believe in clear and consistent communication. We will keep you informed every step of the way. Reach out to our office today, and let us answer any questions you have about workers’ compensation cases and how to get the benefits you’re owed. 

Author Photo

Wesley Cottrell

Wes Cottrell earned his B.A. from Pittsburg State University in 1981 and his J.D. from the Washburn University School of Law in Topeka, Kansas in 1985. He was admitted to practice law in Kansas in 1986, in Missouri in 1987, in Arkansas in 1989, and Oklahoma in 1993. He is licensed to practice law in the United States District Court for the District of Kansas, eastern Arkansas, western Arkansas, and western Missouri. He was Deputy Prosecuting Attorney in Crawford County, Kansas from 1987-1989.

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