As we make our way through this often bumpy ride and become more familiar with the world and its happenings, certain fictions disappear from our minds, usually with eye-opening experiences.
Santa Claus is not real. The Easter Bunny, like any other bunny, does not lay eggs. And sometimes, just sometimes, employees don’t tell the truth when pursuing a workers’ compensation claim.
An Earth-shattering realization this might be, but let me assure you it quiet is true. Sometimes employees don’t tell the truth about whether or not they got hurt at all. Sometimes they don’t tell the truth about how they got hurt. Sometimes they exaggerate how hurt they are.
We’ve all seen those instances where an employee’s weekend spent helping a relative move turns into a Monday-morning back claim 90 minutes after clocking in. We’ve all seen those timelines where a suddenly remembered injury is reported shortly after a denied raise or a given reprimand.
What is the employer supposed to do in those instances, just curse and write a bigger check for workers’ compensation premiums? Surrendering rights to due process is not a pre-requisite to owning a business in California (at least, not yet) and employers absolutely can and should take action when a bogus claim is filed. Action does not mean sitting back and wishing the insurance adjuster “good hunting,” but active participation in defending against a baseless claim.
California Labor Code section 3761(a) imposes upon insurance companies the duty to report a claim to the employer within 15 days of said claim being filed – so if the allegedly injured worker tries to bypass the employer and go straight to the insurer, the employer has a right to know. Furthermore, the Code allows the employer to object to a claim being accepted and provide information to the insurance company that would disprove any aspect of the claim.
If done properly, the insurer will be required to give 15 days written notice to the employer before submitting a settlement to the Workers’ Compensation Appeals Board for approval, and all settlements must be approved by a workers’ compensation Judge to be valid and binding.
What effect might this have on a bogus case?
There are, unfortunately, some workers’ compensation insurance companies in California that take the tactical decision to quickly settle cases, save on administration and litigation expenses, and then pass the cost of the settlement onto policy holders through higher X-Mods and premiums. This is not the approach taken by all insurers by any means – some that your author has had the pleasure of representing are responsive to policy holder requests and information.
When an insurer rushes to accept and pay out a case, the employer can use LC 3761 to throw a monkey wrench in the works. By demanding notice and then demanding an opportunity to be heard, an employer can delay settlement and also object to settlement before a workers’ compensation judge. Since all settlements have to be approved by a workers’ compensation judge to be binding, this gives the employer an opportunity to be heard and to argue against approval of the settlement.
Employers, as policy holders, also have an economic tool to use in making sure their interests are not ignored by their insurance company. After all, whoever hires the band picks the music…
If you are confident that the claim should be denied, but the insurer decides to accept it anyway and pass the costs on to you, then it’s time to have a serious conversation with your broker about taking your business elsewhere. Your broker can help you identify an insurance company that will be more responsive to your concerns. Perhaps a small investment in a higher premium early on will pay a huge dividend in not having to pay even higher rates on claims with no merit.
As we all come to grips with the realities of life in California – namely working from home and fondly recalling those days when friends and family could gather regularly, or when kids could do their screaming competitions on playgrounds instead of next to our workstations – we should be ever cognizant of the encroaching creep of complacency.
If you or your clients are faced with a claim that you know or suspect is fraudulent and/or purely retaliatory in nature, speak up and push back.
Note: The opinions expressed herein may or may not be those of Workers’ Comp Executive. Gregory Grinberg, Esq. is one of California’s premier workers’ comp defense attorneys. He is a managing partner of GALE, SUTOW & ASSOCIATES, APC.