Employee Fraud

In some circumstances, an employee-claimant’s fraudulent representations on a benefits application or during a deposition can bar the recovery of worker’s compensation benefits and can even be the basis for criminal penalty.

However, even the defense of employee fraud is not absolute. Under a Louisiana statute similar to that of other states, an appellate court held that fraudulent misrepresentations do not bar the award of worker’s compensation where the employee did not make the misrepresentation for the express purpose of obtaining benefits. Thus, if an employee engages in fraud for a purpose other than the express purpose of collecting benefits, then the employee is entitled to benefits.

For example, the employee in the Louisiana case severed his fingers within the course of his employment. In a deposition regarding his claim for benefits, he concealed his habitual marijuana use for fear that disclosure of the truth would drive his attorney to abandon his case. Eventually, he admitted the extent of his habit as well as having smoked the drug four days prior to the accident. His fraud did not have a disqualifying effect because the court found that having smoked the drugs four days prior to the accident was not the cause of the accident.