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According to the NICB workers' compensation fraud costs the insurance industry approximately $5 billion annually. Employees, the group most likely to abuse the workers compensation system, also feel the effects from fraud in: Layoffs, Raise or new hire freezes, Company relocation, Cutback in work hours, Employer bankruptcy. In addition, employers increased premium costs mean consumers pay higher prices for goods.

Negligent Hiring

If this term is not familiar, then you should acquaint your self with it. Negligent hiring is the failure to thoroughly check a job applicant's background when, as an employee, the person causes harm to a third party. Employers can and should do an extensive background check of all prospective employees with prior employers. Although many employers give only neutral references in order to guard against defamation suits, many managers will still talk to prospective employers about an applicant's work record. A report that an applicant with an outstanding resume was actually terminated from his prior job for stalking a female coworker at her home is of much more value than any psychological test or polygraph report. Conversely, reports from prior employers that an applicant with a criminal conviction proved to be an outstanding and trustworthy employee may serve as a go-ahead to hire the candidate. 1

Character is always a consideration in employment. The needs of an employer are usually specific to the job performed. Consequently, the employer needs to know that the person, who is being considered for the position, has the basic knowledge to perform the duties inherent to the job. Education and references are the two most important factors in the evaluation of past performance as it pertains to the ability to perform the job. Many employers train on the job, but still have the expectation that a potential employee will be able to learn quickly and be a self-starter.
Do potential employees embellish their résumés?


Why? Because they know that employers do not have the time to do complete background checks and will often take their word for it. The information that an employer receives from a job reference, school records, and previous employers, can help evaluate the potential employee's suitability for the job at hand.
All businesses should attempt to control cost of insurance claims and institute a BUSINESS PLAN AGAINST WORKERS COMPENSATION FRAUD by identifying common indicators of fraudulent activity, screening all new job applicants, informing workers where the money ultimately comes from, and using fraud prevention employee exit interviews.


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