Dealing with Workers’ Compensation Fraud
One of the hardest things to prove in a Workers’ Compensation case is that an employee has committed fraud. Proving Workers Compensation fraud by the employee under Louisiana Revised Statute 23:1208 requires the employer to prove (1) a misrepresentation (2) willfully made (3) for the purpose of obtaining or defeating compensation benefits. See Resweber v. Haroil Const. Co., 94-2708 (La. 9/5/95), 660 So.2d 7. This burden of proof means that the employer must demonstrate that the employee knew that what he was doing was wrong or improper. One of the more common forms of fraud occurs when an employee works or otherwise earns income while also receiving indemnity benefits for being out of work per a physician’s order. With this type of Workers Compensation fraud, employees often claim that they were not aware that what they were doing was wrong or improper. Unfortunately, some courts will accept this excuse and deny a fraud defense because the claimant did not “intentionally” commit fraud in that he did not know that what he was doing was wrong. Louisiana Revised Statute 23:1208 also applies to the employer and/or carrier if they commit similar willful misrepresentations to defeat an employee’s claim for benefits.
One of the best tools you can use to support the loss of a Workers Compensation fraud defense under these circumstances where an employee collecting indemnity benefits is working is to have the employee complete a LDOL-WC-1025.EE form and/or LDOL-WC-1020. This form lays out in detail the criminal and civil penalties to which the employee could be subjected if he receives income while also receiving indemnity benefits for being out of work. The employee’s signature on these forms prevents the employee from claiming later that he did not know that working while collecting these benefits was improper, as these forms clearly lays this out in detail. Unfortunately, before the new amendments to the Workers’ Compensation Act, there was no way you could force an employee to sign this form. Quite often, when the employee was represented, and these forms was sent to the employee or his attorney to execute, the employee would simply stop working or never return the form.
New Law Creates Better Mechanism for Employers to Deal with Workers Compensation Fraud
Now, under Louisiana Revised Statute 23:1201.1, your attorney is allowed to file an expedited hearing with the court to compel the claimant to execute the LDOL-WC-1025.EE or LDOL-WC-1020 forms without the initiation of a Disputed Claim for Compensation (LDOL-WC-1008) or a complete trial on the merits. If you were unable to get this form executed by the injured employee, you should strongly consider having your attorney file this expedited motion to have the claimant execute the appropriate form. This will have the effect of either giving rise to a fraud defense if you later find the injured employee working, or the fear of the penalties may prevent an employee from otherwise attempting to work while collecting indemnity benefits for being out of work.
Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.