Employees are typically the ones who file workers compensation claims – especially after suffering a workplace injury that will lead to a substantial loss of income. Therefore, when researching and investigation potentially fraudulent claims, the employees are usually the primary targets.

However, contrary to popular opinion, employees are not the only ones fraudulently using workers compensation insurance. Studies have proven that workers compensation investigations in Phoenix also target employers as well. Here are some of the reasons why an employer may want to abuse the workers compensation system.

Underbidding Competitors

According to the Washington Times, the abuse rate of workers compensation fraud has increased in recent years primarily due to such factors as the desire to underbid competitors when submitting proposals. Depending on the circumstances and work required for a specific project, legitimate contractors and firms include workers compensation insurance-related expenses within their proposals.

Even though workers compensation is a requirement, there are quite a few companies that avoid paying for this insurance so that their bids will always be lower than their competitors. That is, of course, until their fraudulent acts eventually catch up with them – such as after a thorough workers compensation claim investigation.

Keep Overhead Expenses Low

Another reason why an employer may strive to avoid investing in workers compensation (even if their particular industry requires it) is to reduce their overhead expenses in general. For instance, they may have a start-up company that is still striving to make ends meet while growing their business. On the other hand, it may be a highly-successful company that simply does not view workers’ comp as a valuable investment. By not purchasing the policy at all, they are able to save thousands (or even tens of thousands) of dollars while also risking the safety and lives of their employees in the event of an unexpected emergency.

Keep Premiums Low

Some companies that legitimately obtain workers compensation insurance do not mean that they will legitimately manage that coverage. For instance, the employer may strive to keep the premiums associated with the insurance policy as low as possible even after reported incidents threaten to cause that cot to increase at renewal.

To keep the premiums low, though, dishonest employers do not mind trying to cheat the system perhaps by not filing certain claims at all or manipulating the management of those claims to the advantage of the company more than the advantage of the customer.

Receive Bonus from Safety Programs

There are certain safety programs that offer companies and firms (such as contractors and construction teams) bonuses and pay raises based on their overall performance, adherence to safety guidelines and/or the amount of time that has passed since their last workplace accident. A dishonest employer who is focused more on getting that bonus than maintaining integrity may strive to fraudulently manipulate the workers compensation program to achieve their own goals. Once again, it may seem to benefit the employer by adding more money to their bottom-line revenue each year. However, it could also jeopardize the lives of the people working for them.

It Starts at the Top and Trickles Down

As most consumers and workers know, everything seems to always start at the top of the corporate ladder and then trickle its way down to the employees. For instance, when the managers and supervisors are praised and awarded for the team’s hard work, that level of recognition may trickle down to the employees in the way of award ceremonies, bonus checks and advancement opportunities. Sadly, the same applies to workers compensation fraud and other types of fraudulent practices in the workplace. It may start at the top, but it is not very long before the negative effects of their decision trickle down and affect the livelihoods of their staff members.