Getting injured on the job is not as common as it used to be, but when it does happen, employers foot the bill for medical care and employees get partial pay while they are out of work. Sometimes, however, employees are not truthful about their injuries and are caught defrauding their employers.

Rory Parnell, a workers’ compensation attorney who represents mostly blue-collar workers, including building contractors and electricians, says there are rare times when he has withdrawn from a case because his client lied. “We’re required to withdraw if we discover there might be fraud and, in those cases, we step back and let the client know politely we can’t be their attorney anymore,” he says, recalling a case where this happened.“There was video of the individual doing something they shouldn’t have been doing and we gave them an opportunity to be honest. They declined. You could tell me that you buried Jimmy Hoffa and I can’t tell anybody. So why on earth would you not tell me these things?”

Parnell says most of his clients are hard-working people who want to get back to work. There is a myth, he explains, that people receiving workers’ compensation are trying to milk the system. “My clientele are often tough people working hard labor jobs [who] get hurt and are in a system that 95% of them hate,” he says. “It’s not, ‘I’m on workers’ compensation, I’ve hit the lottery.’ They’re often miserable. And think about a contractor who can no longer do contracting work but has partial disability and is reduced to being a desk jockey.”

New Hampshire law recognizes two types of disability for injured workers. Temporary Total Disability (TTD) applies to injured employees completely unable to work due to their injury. These employees are eligible to receive 60% of their preinjury average weekly wages. Temporary Partial Disability (TPD) is when an employee returns to work in a reduced capacity making less money than prior to their injury. These benefit payments are 60% of the difference between their pre-injury and post-injury average weekly wage. If a person was making $1,000 per week prior to their injury but is now making $600 they would be eligible to claim 60% of $400 as their partial benefit. “Workers’ comp doesn’t pay them the full difference in income if they’re making less money,” Parnell says.

But when workers are dishonest about injuries, it costs employers and drives up the costs of workers compensation insurance.

When a claim is identified as potentially fraudulent, insurance companies work closely with the NH Insurance Department’s Fraud Unit, sending them all relevant information, says Gregory Jamison, senior vice president of underwriting for MEMIC, (Maine Employers’ Mutual Insurance Company) based in Portland, Maine. MEMIC has 451 active workers’ compensation insurance policies covering a range of businesses in NH. “This information includes medical records, statements, surveillance and payment history,” Jamison says, adding that MEMIC has not made any fraud referrals in NH for the last three years.

“If the case appears significant and solvable, we request a complete copy of the claims file,” says Brendan Harris, director of NH’s Fraud Unit. “Once that has been reviewed, and assuming it still appears to be a good case, it’s assigned to one of our fraud Investigators to complete a thorough investigation to determine all the facts.”       

According to NH law, workers’ compensation fraud is defined as the intentional misrepresentation of facts or circumstances related to a workers’ compensation claim that are not rightfully due. This could include someone pretending to be injured at work when they were not or exaggerating the severity of a legitimate injury. Other forms of fraud include lying about the circumstances of the injury, the nature of the injury, the medical treatment received, or working or engaging in restricted activities while collecting benefits.

Workers’ compensation fraud referrals generally fall into two categories, Harris says. This includes individuals working while collecting Temporary Total Disability (TTD) benefits for a workers’ compensation injury, and those suspected of engaging in activities beyond the scope of their alleged injuries or restrictions.

“The first category of referrals typically leads to stronger criminal cases,” Harris says. “If we can demonstrate through a company’s payroll system that an injured worker is gainfully employed while collecting TTD benefits, we can collect his or her paycheck stubs, bank records, and other relevant documents via subpoena to calculate the exact amount earned.”

After this, Harris says the Fraud Unit presents its information to the insurance carrier, which calculates the total overpayment equating to the amount of theft. If the overpayment exceeds $1,000, the NH Insurance Department presents the case to the relevant county attorney for review.

“If the county attorney believes the case is good enough to proceed, one of the investigators in the Fraud Unit will testify before the grand jury and seek a felony criminal indictment,” Harris says. “Once the indictment is secured, it is served on the [defendant] who will appear in court and start the prosecution process. At that point, the investigator assigned simply becomes a witness for the state.” 

The second scenario, involving cases where people are suspected of engaging in activities outside the reported restrictions is “far more difficult to prove,” Harris says, adding there are between 25 to 35 of these cases investigated each year.

“In these cases, the court and jury may hear about the injured worker having a few ‘good days,’ and defense attorneys may also bring in hired medical experts who can provide explanations for what is seen on surveillance videos,” he says. “This often leads to a ‘white coat versus white coat’ situation [doctor versus doctor], and prosecutors tend to avoid cases like that.”

The Role of the Department of Labor
Danielle Albert, NH’s deputy commissioner of labor, says the NH Department of Labor (DOL) is responsible for administering and enforcing the state’s workers’ compensation laws, including overseeing the claims process, reviewing applications, and determining eligibility for benefits.

While the DOL doesn’t investigate cases of fraud directly, Albert says she does communicate with the Insurance Department, insurance companies and employees about the criminal penalties for making false statements. “If an employee thinks they should get benefits we do outreach with insurance carriers and the Insurance Department to make sure the insurance carrier and employer is complying with law,” she says, adding “The same goes when an insurance carrier believes they should not be paying benefits. If it ever came up that something was possibly fraudulent in the course of a hearing, we’d coordinate with law enforcement.”

The Department of Labor’s Hearings Bureau settles workers’ compensation and wage claim disputes, whistleblower complaints, and labor law enforcement actions. During FY 2022-2023, 74% of all cases (1,980) heard by the Bureau were workers’ compensation cases related specifically to benefits disputes. But Albert says in her 10 years as commissioner, she has only been involved in one or two cases of fraud leading to the involvement of law enforcement. “We’re mostly focused on whether a person’s weekly check isn’t coming when it should be,” she says

The Penalties for Workers’ Comp Fraud
Workers’ compensation fraud is considered a felony if the value of the claim or other benefits are more than $1,000. All other cases are considered misdemeanors.

People convicted of violating workers’ compensation law can also be prohibited from participating in any public works projects for a period of one to three years and ordered to pay restitution.

New Hampshire Insurance Commissioner D.J. Bettencourt says insurance fraud can drive up costs for everyone and erodes consumer confidence. “New Hampshire prosecutes felony-level insurance fraud to protect consumers and uphold a fair and honest marketplace,” he says, explaining that because of rising costs and inflation, the threshold for felony-level fraud is low. “This means even smaller fraudulent acts can have significant legal consequences.”