When a worker is injured on the job in California, he or she is quite likely eligible to receive workers’ compensation. It is the responsibility of the employer to see to it that a claim is reported to the proper channels so that the worker gets the appropriate level of compensation.
In order for their employees to receive workers’ compensation, employers are required to pay premiums. The premiums that companies pay are based on a number of factors, including the number of employees that are on the payroll and the wages these workers are paid.
Understandably, companies generally want to control their expenses. So, in an attempt to have lower premiums, a company might underreport the number of individuals they have working for them. They might even misclassify their workers so as to make it appear the workers are receiving lower wages.
Giving false reports to insurance carriers in order to secure a lower premium is considered a fraudulent act. As such, an employer who is facing allegations of having committed workers’ compensation insurance premium fraud could be subject to criminal prosecution.
However, the fact is, in today’s economy, many companies hire employees and let them go with great regularity. Often, properly classifying employees can be a confusing process. In short, it could be very easy for an employer to unknowingly misstate the details that determine the cost of workers’ compensation premiums.
A company that is accused of workers’ compensation insurance premium fraud could suffer damage to its reputation. Individuals accused of the act could face serious fines and jail time. Therefore, if you or someone in your company is charged with this act of fraud, you could likely use the counsel and representation of a California white collar crimes attorney.