Skip to Main Content
Contact Us Search
CA Department of Insurance
CA Department of Insurance
CA Department of Insurance

Workers' Compensation Fraud

Workers' Compensation Insurance Fraud Program

In California, workers' compensation insurance is a no-fault system. Injured employees need not prove an injury was someone else's fault in order to receive workers' compensation benefits for an on-the-job injury. In addition to medical expenses being covered for injured employees, some injured workers are entitled to recover a portion of lost wages resulting from injury. Fraudulent workers' compensation claims can be an enticing target for criminals.

Workers' compensation insurance fraud occurs in simple and complex schemes that often require difficult and lengthy investigations. Employees may exaggerate or even fabricate injuries. At the other end of the spectrum, white-collar criminals, including doctors and lawyers, entice, pay, and conspire with others to defraud the system by creating false or exaggerated claims, over treating, and over prescribing harmful and addictive drugs. Insurance companies pick up the tab, passing the cost onto policyholders, taxpayers, and the general public.

The Workers' Compensation Fraud Program was established in 1991.The legislature made workers' compensation fraud a felony, required insurers to report suspected fraud, and established a mechanism for funding enforcement and prosecution activities. The legislation established the Fraud Assessment Commission to determine the level of assessments to fund investigation and prosecution of workers' compensation insurance fraud.

Funding for the program comes from California employers who are legally required to be insured or self-insured. The total aggregate assessment for fiscal year 2022-23 was $85,700,386.

During fiscal year 2022-23, the Fraud Division identified and reported 2,846 suspected fraud cases (SFCs), assigned 597 new cases, made 164 arrests and referred 257 cases to prosecuting authorities. Potential loss amounted to $404,424,635.

Workers' Compensation Fraud Convictions

District Attorneys' Workers' Compensation Program

In fiscal year 2022-23, 35 counties received funding totaling $51,246,880. The district attorneys reported 1,512 investigations and 341 arrests, which includes some of the Fraud Division arrests. During the same time frame, district attorneys prosecuted 1,142 cases with 1,294 defendants, resulting in 242 convictions. Restitution of $38,652,228 was ordered in connection with these convictions and $22,182,466 was collected. The total chargeable fraud was $1,540,586,583 representing only a small portion of actual fraud since so many fraudulent activities remain to be identified or investigated.

Program for Investigation and Prosecution of Workers' Compensation Insurance Fraud Regulations

Google Translate