The Missouri Labor Department’s Division of Workers’ Compensation (DWC) fraud and noncompliance referrals to the state attorney general for workers’ compensation violations more than doubled in the first quarter of 2010 when compared to the same time period in 2009.
From Jan. 1, 2009, to March 31, 2009, the department’s DWC referred 39 cases to the AG for prosecution. On March 31, 2010, the Division reported that it has already referred 87 cases since the beginning of 2010.
The increase in referrals is caused by the combination of the Division’s efforts enhance its ability to analyze more cases and the fact that employers are likely to cut coverage during hard economic times.
Any employer with five or more employees (one or more, if that employer is engaged in construction) must have workers’ compensation coverage in Missouri, either by securing an insurance policy or by obtaining authority from the DWC to self-insure its liability.
For the last five years, approximately 80 percent of the cases referred to the attorney general involved noncompliance – the failure of an employer to carry workers’ compensation coverage.
Of the 87 cases referred to the attorney general so far in 2010, 67 involved noncompliance, 17 involved fraud by an employer or insurer (e.g. failure to report an injury that occurred), and three involved fraud by employees.
Failure to comply with the workers’ compensation requirements is a class A misdemeanor that carries a penalty of up to three times the premium the employer would have paid or $50,000, whichever is greater. Failure to report an injury is also a misdemeanor with a penalty of $50-$500 per violation. Making a false representation in order to obtain a benefit is a class D felony carrying a fine of up to $10,000 or double the value of the fraud, whichever is greater.
Source: Missouri Labor Department’s Division of Workers’ Compensation
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