4 Commons Examples of Employee Fraud
When most people think of employee fraud, they think of large-scale schemes like embezzlement or insider trading. But employee fraud can take many forms and can happen in any organization, no matter how big or small.
This post will look at four common examples of employee fraud. We’ll also discuss some warning signs indicating someone is engaging in fraudulent behavior. So if you’re interested in learning more about employee fraud, keep reading.
1 – Personal Time Fraud
Personal time fraud, also known as “weekend warrior fraud,” is a common type of employee fraud. Employees claim they work weekends or off days to receive overtime pay. In most cases, the employee is not working these extra hours. They may be at home sleeping, running errands, or taking care of personal business. This fraud costs companies millions of dollars annually in wasted wages.
To prevent this fraud, businesses should have a time tracking system that requires employees to clock in and out for their shifts. Employees should also be required to submit documentation such as timesheets or work logs to receive overtime pay. By taking these precautions, businesses can help to deter personal time fraud and protect their bottom line.
2 – Double Dipping Fraud
You may have been tempted to collect your salary and your temporary disability benefits if you’ve been injured at work. However, this is considered fraud, and it can have serious consequences. Double dipping occurs when an employee collects wages and temporary disability benefits for the same period.
This is a prevalent form of fraud in the construction industry, where workers are often paid “under the table” in cash. In addition to being illegal, double dipping can also lead to higher insurance premiums and cause problems down the road if you need to apply for Social Security disability benefits.
3 – Exaggerating An Injury
One of the most common examples of employee fraud is exaggerating an injury. Workers might say their back is so painful they can’t even get out of bed. If found guilty of this fraud, employees will receive criminal charges, including having to pay back the insurance company for benefits received. This type of fraud is costly to businesses and insurers, as well as unfair to those who are genuinely injured.
Not only does it raise premiums for everyone, but it also puts a strain on the resources of those trying to help genuine claimants. If you suspect someone exaggerates their injuries, report it to the authorities. Helping to stamp out this kind of fraud benefits us all.
4 – Fraudulent Insurance Certificates
Lastly, insurance fraud is one of the most common employee frauds. In many cases, employees will apply for insurance coverage and then cancel the policy after they receive the certificate of insurance. This fraud costs businesses millions of dollars each year in premiums and can also lead to costly lawsuits.
To help prevent this type of fraud, companies should require employees to provide proof of insurance before hiring and then regularly check to ensure that the policy is still in force. Employees should also be aware that there are consequences for committing insurance fraud, including possible jail time.
Popular Employee Fraud Examples: In Closing
In conclusion, business owners need to be aware of the different types of employee fraud that can take place in their organization. By being proactive and educating employees about these scams, business owners can help reduce the chances of their company becoming a victim of fraud.
