According to the National Academy of Social Insurance (NASI), employers’ costs for workers’ compensation amounted to nearly $97 billion in 2016. Fraud estimates vary, but if even one per cent of those cases were fraudulent that would amount to $970 million.

Both employees and employers are capable of committing workers’ compensation fraud. An employee may lie about or exaggerate an injury to obtain more benefits whereas an employer might misclassify workers to avoid providing benefits.

A workers’ compensation investigator gathers information and evidence about the injury to either confirm or deny the validity of the claim. To do the job properly, there are nine questions you must ask to decide whether the claim is legitimate or not. Use these tips in your next worker's compensation fraud investigation.

Near miss reporting is one way to prevent reccurring safety issues before they cause true harm. Download our Near Miss Reporting Template here.

9 Key Workers' Compensation Investigation Questions

1. Describe the Accident in Detail

Ask the employee to describe the accident in detail. This includes information such as:

• The time of the accident
• The incident location
• What task they were performing
• How long they were performing the task before the incident occurred
• Who was with the employee and what they were doing at the time of the accident
• What equipment they were using or PPE they were wearing

Try to capture as many facts of the worker's compensation case as possible. If the employee is having a hard time giving you as much detail as you need, follow up with more specific questions. The goal for the worker's compensation investigator is to receive so much information that they are able to envision the accident clearly in their head.

Not sure where to look for red flags? Read through our guide: 31 Warning Signs of Workers' Compensation Fraud. 

2. Describe the Location of the Accident

The next step to take when investigating worker's comp claims is to gather details about where the incident occured. Ask the injured employee to describe the location where the accident occurred and the physical condition of the area.

For example, if the employee tripped on the warehouse floor and got a concussion, it’s important to know whether the floor was cluttered, wet, or muddy, and if there were any warning signs (i.e., "Caution: Wet Floor") posted.

Having this information may reveal a number of key factors that caused the accident. You can then rule out factors until you uncover the root cause of the accident.

3. Were Any Witnesses Present?

One of the most important questions to ask is whether there were any witnesses present and what they were doing at the time of the accident. Witnesses often provide valuable information that can drastically alter the outcome of the investigation. Most witnesses have nothing to gain and willingly offer information that the injured individual may have wanted them to conceal.

A witness also might remember details that the claimant does not, especially if they hit their head or were otherwise traumatized by an injury. For instance, a bystander might have seen the person trip over an obstacle that they couldn't see themselves because they were carrying a large box.

4. Were Company Procedures Being Followed?

One of the most important worker's compensation investigation tactics is to see if the claimant was behaving in an unsafe way. In other words, you need to uncover whether the injured employee was following company procedures when the accident occurred. Proper company procedures can include anything from following the exact steps to using the right tools and equipment.

It’s important to learn this because there are always procedures in place to prevent accidents from happening. If the injured employee ignores these steps and gets injured, they must take responsibility for that, and the company is protected from liability.

5. What are the Employee’s Job Duties?

Similarly, it’s important to learn the employee’s duties according to their job description. Was the task a part of the employee’s regular job and were they qualified to carry out this task? Had they carried out the task without supervision or a "buddy" before?

A workers' compensation investigation becomes much more convoluted if the employee was injured performing a job outside of their scope of employment.

6. What is the Nature and Scope of the Injury?

Contact the injured employee’s medical provider to verify the nature and scope of the injury. If applicable, also inquire about their diagnosis, prognosis, treatment plan, and work restrictions. Get as many details about how the employee will be physically affected, how long their injury and treatment will last, and what types of activities the doctor says the employee can and cannot perform.

This information can be cross-referenced with what the injured employee and witnesses claim. Ideally, the information will match what the injured employee and witnesses said.

7. Can the Employee’s Job Be Modified?

If the employee seems to really be injured, the next step is to evaluate whether their job can be modified. Is there a way to change the employee’s day-to-day tasks to fit the work restrictions set by the medical provider?

Speak with the employee’s direct manager to determine if the job description can be modified to accommodate the employee’s injury. For example, if a chef broke their foot and can no longer stand for long periods, they might be able to sit at a table to chop vegetables or roll silverware rather than stand at the stove until they heal.

8. Have They Sought Workers' Compensation Before?

Look at the employee’s history. Do they seem to get injured on the job a lot? Do they have a habit of seeking workers' compensation? If yes, have they won?

Some jobs are more dangerous than others, but it’s particularly concerning when a fraudster makes numerous attempts to win their workers' compensation cases in court but fail.

Numerous failed attempts may be a sign that the employee is actively trying to fraud the system (but not doing such a great job of it).

9. What Actions Could Have Prevented the Accident?

Workers' compensation investigations have two important goals. The first goal is to confirm the legitimacy of a claim. The second is to identify any immediate, long-term, temporary or permanent actions that can prevent similar accidents from occurring in the future or minimize their effects. This question will help you prevent future accidents.