7,788. That is how many workers' compensation cases were reported in Arkansas in 2010. What was the resulting burden for Arkansas business owners? Collectively, they paid over $144 million in workers' compensation, and over $19 million of that was just for medical expenses. How much did you pay? (www.awcc.state.ar.us/reports/biennial/fullbiennialreportfor2010.pdf).

As you can see, workers' compensation claims cost Arkansas businesses a hefty chunk of their revenue. I doubt anyone reading this would begrudge an injured employee fair compensation, but I wonder how many of you reading this are certain that all of the monies you paid out in workers' compensation were legitimately claimed.

Workers' compensation fraud is big business for unethical employers, employees, and third parties such as doctors and medical laboratories. This type of fraud causes honest employers to have to pay higher insurance premiums to offset the cost of compensation for fraudulent claims. As a business owner, you have both a right and a responsibility to stop the bleeding from fraudulent claims, but you can't do it alone. You need the specialized skill of a private investigator to help you determine the validity of workers' compensation claims.

Is workers' compensation fraud really a big deal? Yes, it is. Workers' Compensation Fraud is a class D felony, and a person convicted of Workers' Compensation Fraud may be sentenced to up to six (6) years and be given a fine of up to ten thousand dollars ($10,000).  (A.C.A. §11-9-406). Worker's compensation fraud can be perpetrated by an employer, an employee, or a third party.

By an employer

Workers' compensation fraud by an employer may take the form of coverage fraud or claims related fraud. The amount of insurance an employer has to pay is directly related to the risk level of his business. Coverage fraud is committed when an employer falsely minimizes the risks involved with their business in an attempt to artificially reduce high insurance premiums, or avoid having to set aside as much money to pay for future injuries. A 2007 study found that employers in high-risk California industries may hide up to 75 percent of their payroll - or $100 billion - for the most-dangerous jobs. (Frank Neuhauser and Colleen Donovan, University of California-Berkeley, 2007) A separate study found that more than 39,500 employers misclassify 704,785 workers throughout New York State each year. (Linda H. Donahue, James Ryan Lamare, and Fred B. Kotler,Cornell University, 2007)