Beauty Store Business magazine - January, 2020

Get ’Em Under Control, p.5


Fraud can be expensive in terms of rising workers’ compensation premiums due to appeals in court and the time and expense required for hiring replacement employees. “The great majority of claims are legitimate,” says Burton. “Most are compensable and correctly filed. But there are occasional outliers, and they can be costly to the employer. In a time when everyone is competing in a global economy, the costs of fraudulent claims can make an employer less competitive.”

How can you prevent such claims? “Use good interviewing techniques when hiring new employees,” says Burton. Interviews should assess the work background and history of the applicant and his work ethic. “Also, educate managers to be mindful of things that might be suspicious,” adds Burton. “Educate your [staff]. Be sure they understand that [when] you add costs to a business it makes the business less competitive and may result in an employer eliminating positions due to increased expenses.”

Should you fight a fraudulent claim in court? “If the employer has substantial evidence either through investigation or surveillance, certainly it would be beneficial to challenge a claim,” says Burton. “Hopefully the workers’ compensation commission will make the right determination. Bear in mind that most claims are nonetheless legitimate.”


Workers’ compensation fills a vital need for employers who are protected from lawsuits by injured workers. The system makes sure employees receive compensation for a portion of lost wages and medical costs resulting from workplace injuries.

The workers’ compensation system is not subject to the same cost controls as the health-insurance industry. Nor do injured workers pay deductibles. For these reasons and many more, premiums are likely to rise further in the years ahead.

“No one knows what will happen once health care reform takes hold,” says Free. “One might think that the legislation will cause claim costs to go down because everyone will be insured. Whatever happens, we can expect workers’ compensation costs to become an even greater concern in the future.”