Workers' Compensation Insurance Fraud

The Merced District Attorney's Office is committed to providing you with the necessary information to help identify potential scams and other forms of insurance fraud related crimes. We will continue to pursue an aggressive campaign to identify, investigate, and prosecute workers' compensation insurance fraud.

Effects of Fraudulent Claims

Fraudulent claims undermine the integrity of the system and cause unnecessary delays in treating real injuries, while casting a shadow over the thousands of legitimate claims that are filed each year. These crimes can be committed by employees or employers and can occur in both the private and public sector.

Workers' Compensation Fraud occurs when someone knowingly makes a false statement or conceals information in order to receive workers' compensation benefits or prevents someone from receiving benefits to which they might be entitled.

The Law Regarding Workers' Compensation

California Labor Code 3700 requires all employers to insure against the costs of workers' compensation. This can be done by purchasing workers' compensation insurance or by being lawfully "self-insured." While owners of a business can choose whether or not to be personally covered by workers' compensation insurance, all of their employees must be covered.

Workers' compensation protects employees who get hurt on the job. It may also protect employers from certain types of lawsuits brought by injured workers. Employers who do not carry workers' compensation insurance have an unfair economic advantage over businesses that obey the law. The office of the District Attorney enforces these laws to protect workers and to assure fairness among businesses.


Some examples are:

Claimant Fraud

  • Exaggeration of symptoms.
  • Working while allegedly disabled and not reporting income.
  • Claiming a job-related injury that never occurred.
  • Claiming a non-work related injury as a work-related injury.
  • Falsifying mileage reports.

Employee Fraud

  • Under-reporting payroll for misclassifying employees for lower insurance premiums.
  • Deducting premiums from employee wages.
  • Employer knowingly fails to have necessary workers' compensation coverage. It is illegal for an employer to operate without workers' compensation insurance (CA Labor Code Section 3700.5).

Medical or Health Care Provider Fraud

  • Providing unnecessary testing or treatment of injured workers for financial benefit.
  • Billing for services never preformed.
  • Billing the workers' compensation insurer and worker's health insurer for the same services.

If You Do Not Have Workers' Compensation Insurance

Employee labor cannot be used until you obtain it. Immediately call your insurance broker, agent, or a workers' compensation insurance company. Failure to carry the required workers' compensation insurance is a misdemeanor, pursuant to California Labor Code 3700.5 (a). A person convicted of this crime can be

  • Sent to jail for up to one year;
  • Ordered to pay a fine of up to double the amount of the premium owed, but not less than $10,000.00;
  • Or both jail time and a fine.

As soon as you get workers' compensation insurance, provide a copy of your certificate in the following manner:

Send (by fax or email) or deliver your policy certificate within 10 days to:

Merced County District Attorney
C/O W/C Insurance Fraud Unit
550 W. Main St., Merced, CA 95340

Contact Phone:  (209) 385-7383
Fax:  (209) 725-3563

If you feel you know someone who may be committing this type of fraud, report the fraud to your employer. You may also contact the District Attorney's Office at (209) 385-7383 or report it to the following agency:

CA Department of Insurance Fraud Hotline:

(800) 927-HELP (4357)

[email protected]