Workers’ Compensation Fraud and the Penalties in Pennsylvania

Workers’ compensation fraud, according to the National Insurance Crime Bureau (NICB), accounts for about 25 percent of all property/casualty insurance fraud, and costs about $7.2billion a year.

There are two forms of workers’ compensation fraud committed by employers, and those include underreporting payroll and through misclassifying employees. Employers can underestimate how much payroll they have in order to lower their insurance premiums. They can also claim that certain employees, who are, in fact, employees are independent contractors. Employees can also misrepresent what their employees do and the level of risk involved with the work they do. For example, classifying construction workers as clerical workers in order to get away with paying lower premiums. Then there are those employers who are required by law to carry workers compensation insurance, but they do not. This leaves employees exposed to significant risk. If they get injured on the job, there is no workers’ compensation insurance to pay for that employees’ disability wages and medical expenses.

Penalties for workers’ compensation fraud in Pennsylvania

Those who commit workers’ compensation fraud in Pennsylvania may be subject to both civil and criminal penalties. Anyone who has insurance fraud can report it to the PA Office of the Attorney General, or by calling 717-787-0272.

Employers who are uninsured face both civil and criminal charges for failure to maintain workers’ compensation coverage. The employee can take legal action against the employer for their work-related injuries or occupational disease in excess of the amounts allowed under the workers’ compensation program. Additionally, the employer will be criminally charged for each day that they failed to maintain continuous workers compensation coverage for their employees. Misdemeanor charges and a fine of $2,500, and up to one year imprisonment for each day the employer is in violation of the requirement to maintain insurance coverage. A felony conviction and a $15,000 fine and up to seven years imprisonment for each day the employer intentionally violated this requirement. The employer may be required to pay all benefits awarded to the employee by a workers’ compensation judge.

If you have been injured at work and discovered that your employer did not have workers’ compensation insurance, you are welcome to contact the Philadelphia workers’ compensation attorneys at Larry Pitt & Associates. From our multiple offices we serve clients throughout Berks, Bucks, Chester, Delaware, Montgomery and Philadelphia Counties.



Larry Pitt

Larry Pitt

If you've been injured, Larry Pitt & Associates can provide you with the legal assistance and representation you need to ensure that justice is served. Get in touch today for a free consultation to discuss your case. Whether it’s a work injury, auto accident, medical malpractice, or any other injury-related matter, we are here to help make sure your rights and interests are respected. We understand the stress and frustration that can accompany an injury, and we are committed to providing thorough legal guidance and support throughout the entire process.