One Way Employers Can Prevent Workers Compensation Fraud in New York

A little advice  about how employers can prevent comp fraud in NY.  "Tips from Ted," a workers comp defense attorney with 30 years helping employers (and a few employees) reduce their workers comp exposure.
This is about a little advice. Not for the employer, but advice that employers can give their employees – to prevent comp fraud.
Most people, employers and employees alike, are not familiar with partial disability payments and work comp in NY. It is often assumed that “disability” in comp means “total disability” and that being able to perform light or part time work will render a worker unable to collect comp. Or, it is wrongly assumed, trying to allege a total disability will produce higher settlements. (WCxKit)
After a period of initial total disability, many workers become active, leave the house and begin to perform light chores – all perfectly legal. Some, however, are tempted to take occasional light, part-time work and fail to report the activity to the treating doctor, the Board, the IRS, the carrier or their own lawyer – all quite illegal. And  foolish.
Every so often, the NY Workers Compensation Board publishes a list of person who have been arrested for comp fraud – usually persons receiving comp working at undisclosed jobs. The jobs, however, are usually minimum wage activity. Perhaps more than half of those arrested would have improved their claims if they simply disclosed the work and what it paid. Why? Because a person working remains eligible for comp – if the wages are less than the pre-injury wages. The worker continues to receive 2/3 of the difference.
It may seem that the worker is reducing the comp payments. That is true, often, but the true measure is what the net weekly income is when comp is added to after tax income. Since comp is tax free, a part time worker on comp is materially far better off with reduced comp payments and some earned wages than they are with “total disability”. And a valid work effort is presumed to be the correct measure of disability – it is difficult to contest, unlike total disability.
An employer is wise to suggest to workers on comp for more than a few weeks that they call the Board, if they do not have an attorney, and get the facts about partial disability payments. Persons experienced in NY comp, reading the reports of comp fraud arrests usually shake their heads and ask, “Why didn't they just report the work effort?”

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, New York. He is a frequent writer and speaker, and has represented employers in the areas of workers' compensation, Social Security disability, employee disability plans, and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100.

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
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