When Workers’ Compensation fraud makes headlines, it often focuses on injured workers accused of exaggerating injuries or collecting unnecessary benefits. But workers are not the only ones who commit fraud within the system.
A recent criminal case involving a San Francisco construction company illustrates the risks to injured workers when employers commit fraud. Prosecutors allege the company’s owners underreported payroll to avoid taxes and insurance premiums, and that one later attempted to prevent an employee who lost a finger at work from receiving Workers’ Compensation benefits.
What Happened in the San Francisco Workers’ Compensation Fraud Case?
The San Francisco District Attorney announced in August that Declan McKevitt and Grace McKevitt, owners and managers of An Dun Construction, were arraigned on multiple felony charges, including Workers’ Compensation premium fraud and payroll tax fraud. Both pleaded not guilty.
Declan McKevitt also faces insurance fraud charges related to allegations that he made false statements to deny compensation and discourage an injured employee from seeking Workers’ Compensation benefits. The allegations surfaced after the employee severely injured his hand while using a table saw, resulting in the amputation of a finger.
Prosecutors allege that Declan McKevitt instructed the employee to tell medical providers the injury did not occur at work. He later allegedly denied the worker was employed by the company and claimed he was at the job site without his knowledge.
However, payroll records and witness statements reportedly indicate that the employee had worked for the company for approximately seven months. The alleged denial delayed the worker’s benefits for four months, prosecutors said.
How Does Underreported Payroll Affect Workers’ Compensation?
Employers pay Workers’ Compensation insurance premiums based in part on payroll and the type of work their employees perform. An employer that intentionally underreports payroll can pay lower premiums than it otherwise would owe. However, payroll fraud is not just a financial dispute between an employer and insurance company.
Accurate employment and payroll records can become extremely important when someone gets hurt on the job. If an employer denies an employment relationship, misclassifies a worker, conceals payroll, or provides inaccurate information to insurers, injured workers can face significant obstacles seeking medical care and Workers’ Compensation benefits.
The San Francisco case presents an especially stark example. If the allegations are proven, the employer accused of underreporting payroll also attempted to deny that a seriously injured worker was an employee at all, illustrating how payroll fraud and inaccurate employment records can directly interfere with access to benefits.
What Ways Can Employers Commit Workers’ Compensation Fraud?
Public discussion of Workers’ Compensation fraud frequently centers on employees accused of filing false claims. Employers can be equally responsible for Workers’ Compensation fraud, which can potentially involve:
- Underreporting payroll to reduce insurance premiums
- Misclassifying employees to obtain lower premium rates
- Paying employees off the books
- Falsely claiming a worker is an independent contractor
- Providing inaccurate information about a workplace injury
- Denying that someone is an employee after an injury occurs
- Discouraging an injured employee from reporting an accident or filing a claim
What if My Employer Denies My Employment?
Being paid in cash, working without formal paperwork, or being labeled an independent contractor does not necessarily mean you are ineligible for Workers’ Compensation benefits. Likewise, an employer’s denial of your employment does not automatically resolve the question.
California Workers’ Compensation cases can involve disputes over whether an employment relationship existed, how you are classified, whether the injury occurred at work, and which benefits are available.
Evidence can be especially important in Workers’ Compensation cases. Pay records, text messages, emails, work schedules, photos, witness statements, and other documentation help establish the nature of the work relationship and the circumstances surrounding your injury.
What Happens if an Employer Commits Workers’ Compensation Fraud?
California employers that commit Workers’ Compensation or related payroll fraud can face significant consequences. Depending on the conduct and circumstances, these may include:
- Criminal Charges: Workers’ Compensation insurance fraud and certain forms of payroll fraud can result in misdemeanor or felony charges.
- Fines and Penalties: Employers may face substantial fines and other financial penalties associated with fraudulent conduct or failure to comply with Workers’ Compensation requirements.
- Restitution: Courts may order an employer to repay money obtained or withheld as a result of fraud, including losses suffered by insurers or government agencies.
- Unpaid Premiums and Taxes: An employer that concealed or underreported payroll may be required to pay insurance premiums, payroll taxes, interest, and other amounts that should have been paid.
- Potential Incarceration: A conviction on serious fraud charges can expose business owners, managers, or others responsible for the conduct to possible jail or prison time.
The San Francisco case demonstrates the seriousness with which these allegations can be treated. The two construction company owners face multiple felony charges, while one also faces additional insurance fraud charges related to the handling of the injured employee’s Workers’ Compensation claim.
San Francisco Workers’ Compensation Lawyers at Walters & Zinn, Attorneys at Law, Help Injured Workers Secure Benefits
If you were hurt at work and have questions or concerns regarding benefits, the experienced San Francisco Workers’ Compensation lawyers at Walters & Zinn, Attorneys at Law, are here to help. Call 916-610-4706 or contact us online to schedule a free consultation. Located in Folsom and Fairfield, California, we serve clients nationwide.