Area of Law: Insurance Law
Answer # 2799
Workers' insurance fraud investigationsRegion: Ontario Answer # 2799
What is the Workplace Safety and Insurance Board?
Ontario’s Workplace Safety and Insurance Board (WSIB) is the government body that administers compensation and no-fault insurance to Ontario employers and oversees workplace safety and insurance claims. It operates in compliance with the Workplace Safety and Insurance Act.
Who can initiate workplace insurance board investigations?
Normally, the WSIB investigates claims if an insured worker is suspected of an offence under the Act. However, to keep their insurance premiums from increasing, employers may themselves initiate an investigation to eliminate any claims that they suspect may be fraudulent. The higher an employer’s claim rate, the higher their insurance premiums are.
In the process of such investigations the employer and the WSIB may hire private investigators to determine if fraud or wrongdoing is occurring and to document it.
Who can be investigated?
According to the WSIB, most claims-related offences are committed by workers. However, an investigation may include a spouse of the worker, or a worker’s dependant, such as a child.
Employers themselves may also be investigated by the WSIB for offences under the Act, such as:
- failure to register as an employer within 10 days
- failure to keep accurate statements of wages paid
- failure to notify the WSIB of an accident
Medical practitioners and health-care providers
Medical practitioners and health-care providers have also been known to commit workers’ compensation fraud, for example, by reporting non-occupational injuries as work-related, or billing for exams of patients that did not occur or for treatment never received.
Why are people investigated?
The following offences are the most common and are considered to be fraud under section 149 of the Act:
- Knowingly make a false or misleading statement – Most often, employees will overstate the symptoms or severity of a work-related injury in an effort to increase or prolong benefits.
- Failing to inform the WSIB of a material change in circumstance when required to do so. A material change in circumstance refers to any change that affects a person’s entitlement to benefits and services under the Act, and can include changes to:
- health care status, such as improvement of the work-related condition or stopping treatment,
- earnings or income, such as getting a wage increase or decrease,
- work status, such as termination due to the work-related injury, and
- having additional income from other employment while claiming to be incapacitated or unable to work.
Workers compensation fraud generally occurs when there has been deliberate dishonest conduct that results in a financial loss to the WSIB, usually as a result of a fraudulent claim. Certain offences are also considered fraud under Section 380 of the Canadian Criminal Code, such as making a false claim, or forging or altering a document.
When can an investigation be initiated?
Before an investigation can occur, there must be sufficient grounds, or red flags, that suggest an offence has been committed.
The red flags that may prompt the WSIB to investigate a claim they have received include:
- problems speaking to an injured worker directly
- frequent change of phone number or address
- anti-social behaviour or overreaction
- forms returned by someone else or not signed
- an unreasonable distance travelled by the worker to see a doctor
If the WSIB approves a claim, an employer may want to initiate its own investigation if they disagree with the WSIB’s decision (called a denial of initial entitlement). An employer may believe a claim is fraudulent and should not have been approved for a number of reasons, including if:
- the worker is taking too long to come back to work,
- the worker is exaggerating symptoms or severity of injury in an attempt to increase benefits,
- the employer believes the worker’s injury is not compatible or consistent with the duties of the job,
- the employer suspects that the injury is not work related, or
- there is an issue with the suitability of modified work offered when the worker is saying they are too disabled to participate (but employer has heard that the worker is very physically active on the weekends).
Investigations by the WSIB
1. Preliminary inquiry
If red flags are present while the WSIB is reviewing a claim, and the WSIB suspects that an offence under the Act has been committed, a preliminary inquiry is first conducted. A preliminary inquiry includes gathering information such as proof of an accident, verifying earnings, and confirming an employer’s premium information.
2. Referred to Regulatory Services
If the preliminary inquiry uncovers evidence of wrongdoing, the file is then referred to Regulatory Services. The Regulatory Services department reviews all referred cases and decides whether it will conduct an investigation.
3. Investigator gathers evidence
If Regulatory Services decides an investigation is to take place, an investigator may be hired to gather evidence to prove that an offence has occurred. Evidence may be gathered by:
- background checks
- locating witnesses and obtaining their statements
- video surveillance
- audio surveillance
- personal observations
An investigator will document such things as:
- the apparent degree of disability,
- any physical restrictions or limitations the individual is exhibiting,
- the employee’s daily activities,
- the types of transportation the employee is using, such as driving a car or riding a bicycle,
- if the person is getting assistance from a caregiver or housekeeper, or performing domestic duties on their own, and
- whether the person is working at any other business to generate income.
An investigator will use the same techniques and gather the same evidence when conducting an investigation for an employer as is done for the WSIB.
4. Investigator’s report
Once an investigation is completed, the investigator will present a written report, along with any video and photos, that includes all the evidence discovered. This evidence may be used at a WSIB hearing. In addition, the investigator may be required to appear at the hearing to answer questions about the investigation and the report.
Charges and penalties under the WSIA
If wrongdoing is proven, the type of offence committed determines what action is taken. In the case of a claim-related offence by an individual the WSIB will decide whether to terminate or reduce benefits or record a benefit-related debt.
In the case of offences committed by employers, Regulatory Services may take administrative action, such as levying a penalty. The Legal Services department of the WSIB may start a civil action to recover money or property.
Regulatory Services may also lay charges and prosecute. Convictions of an offence under the WSIA carry the following penalties:
- for individuals, a fine of up-to $25,000, or imprisonment for up to 6 months, or both
- for corporations, a fine of up-to $100,000
Criminal Code offences
Certain acts may constitute fraud under the Criminal Code. Examples include,
- making or using a false document (i.e., a false birth certificate, Social Insurance Number, or WSIB clearance certificate)
- knowingly falsifying an employment record
- billing the WSIB for services not rendered
If an offence is considered criminal, Regulatory Services refers the case to the police, who then decide whether to lay charges under the Criminal Code. If convicted of fraud exceeding $5,000, penalties can include imprisonment for up-to 10 years, fines, probation and an order to pay full restitution. For more information about WSIB fraud and compliance investigations, visit wsib.on.ca.
To have someone conduct a workers’ insurance fraud investigation, or for other investigation services, contact our preferred Investigators, MADPI GLOBAL .
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