Crackdown on workers’ comp fraud impacting construction companies

Authorities are stepping up enforcement of workers’ compensation laws, and construction companies need to be aware of their legal duties to avoid the potential consequences of fraud.

One type of fraud involves paying employees cash off the books so that the amount of payroll on which premiums are calculated is reduced. Another common type of fraud involves employers intentionally misclassifying employees as independent contractors. Another common illegal strategy is using shell companies set up for the sole purpose of paying employees without paying workers' comp insurance and other benefits or taxes.