Dec 12, 2017 Workers Comp Premium Fraud Leads to Jail Time and Fines
Two men, a father and son, recently pleaded guilty to felonies including insurance fraud and the denial of insurance and health benefits to injured workers. The pleas stem from a scheme that was recently uncovered by California insurance regulators, and led to the two men being fined over $370,000 and sentenced to 250 days in jail.
The case goes back potentially years as the two men ran a company that provided laborers to the fruitful Salinas Valley. According to reports, the two men kept two separate sets of books. One was a real record, while the other was purely to show insurance companies. They also kept their workers from getting the correct compensation when they were injured and denied them the healthcare to which they were entitled.
It appears from the reports that the purpose of this scheme was to save on premiums they were required to pay. Apparently, the tip-off came when the company reported zero employees on one of their annual reports. This drew the insurance department’s gaze. It led to a revelation about the company not paying premiums, hiding worker injuries, and denying benefits.
There is no telling how widespread this kind of abuse is, but there may always be the potential for it. There are several factors that go into a company choosing not to comply with the law, or even to commit fraud. One of those factors is the ever-increasing mountain of regulations that companies in California face. Another factor is the vulnerable population that works in the California agricultural industry. Many workers would rather get paid and be denied benefits than speak out.
This company learned the hard way that compliance with the rules and regulations can make the difference between remaining in business and going to jail. Most cases are not this extreme, but even simple noncompliance may lead to fines, work stoppages, and the loss of profits. Companies operating on a budget can simply not afford these kinds of intrusions.
Compliance is the Only Good Option
This case should be a good lesson for any company doing business in California, particularly those in the agricultural sector. It is tempting to skip on some requirements, and save money by hook or by crook, but it never pays off in the end. The best answer to remain viable is to remain compliant with state regulations in every way.
Both large and small companies need to comply with many rules and regulations. That is why your company needs the right partner to create and execute a plan that keeps you compliant. This plan will range from ensuring that you are current and compliant with labor rules such as worker’s compensation insurance, as well as wage and hour requirements that can change with every legislative session.
Understanding the AgTech Industry
Every agricultural company in the state needs an employment and labor partner who understands the industry and rules that affect them. At the Royse Law Firm, our team of dedicated employment legal professionals know the issues that your company faces, and will work with you to form and execute a great compliance plan. Contact us today.Disclaimer: This blog and website are public sources of general information concerning our firm and its lawyers, as well as the information presented. They are intended, but not promised or guaranteed, to be correct, complete, and up-to-date as of the date posted. This blog and website are not intended to be, and are not, sources of legal opinion or advice. The materials, information, and communications on this blog and website do not apply to any particular person, entity, or situation, and do not apply to you or to your specific situation. You will need to consult with an attorney and/or other appropriate professional about your specific situation. Thank you.