Some people make fraudulent insurance claims based on false or exaggerated employment. The following situations may occur and are considered to be insurance fraud:
- A legitimate employer completes insurance forms that are subsequently altered to exaggerate the level of income earned prior to the incident.
- An employer completes insurance forms for a person who:
a. No longer works or never worked for them
b. Works for them but not at the rate or for the hours documented. - A business is created on paper for the sole purpose of being listed as an employer in an insurance claim. The business may never actually exist, or it may exist but not conduct any business.
- False documentation – such as pay stubs, cheques, T-4 forms, income tax returns and bank statements – are submitted to support fraudulent claims for lost income.
- An employer is paid a kickback to complete fraudulent insurance claim forms.
- A legitimate, uninvolved business is fraudulently listed on a claim form.
Real businesses can be significantly affected by employment fraud in a variety of ways:
- When an employee is off work to support a false injury claim, the business loses money unnecessarily.
- If an employee sustains a real, but minor, injury and intentionally exaggerates it to receive additional insurance benefits, the business loses money unnecessarily.
- When legitimate employment forms are altered or falsified, the reputation of a business may be compromised.