MISSOURI DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS LABOR NEWS Matt Blunt, Governor      Todd Smith , Director

FOR MORE INFORMATION CONTACT:  Wanda Seeney (573) 751-7500
FOR IMMEDIATE RELEASE:  January 18, 2008

JEFFERSON CITY, MO – Throughout calendar year 2007, the Missouri Department of Labor and Industrial Relations received 446 allegations of workers’ compensation fraud and 598 allegations of workers’ compensation noncompliance.

“We take our responsibility seriously when it comes to identifying fraud and referring cases for prosecution,” said Todd Smith, director of the Missouri Department of Labor and Industrial Relations. “It’s critical that employees have the coverage they need in the event they’re injured on the job. Gov. Matt Blunt also takes fraud seriously and supports our efforts to take legal action against violators,” Smith added.

In 2007, 198 cases of fraud and noncompliance were referred to the Attorney General’s (AG) Office for prosecution. The following further breaks down the cases by category:

• Of the 198 cases referred to the AG in 2007, 62 or approximately 32 percent were for workers’ compensation fraud. There currently are 125 fraud and noncompliance cases still pending prosecution.
• Of the 598 noncompliance cases referred to the Missouri Department of Labor and Industrial Relations, 136 were determined to violate the law and were referred to the AG for prosecution. It was determined that 17 cases or 12.5 percent of employers initially tried to claim their employees as sub/independent contractors when in fact, those persons were employees.

In the state of Missouri, businesses with five or more employees are required to carry workers’ compensation insurance. Construction employers with one or more employees must buy coverage. Those businesses who fail to carry workers’ compensation insurance are deemed noncompliant with the law.

The total number of workers’ compensation fraud and noncompliance cases referred for prosecution is based on several factors. To prosecute cases of fraud, there has to be proof of the intent to gain a benefit. Fraud is committed when an employee, employer, healthcare provider or others, lie to obtain a benefit – monetary or otherwise. Department figures do not include cases that are still pending and require additional investigation, or those cases that were deemed as “no show of intent.” Likewise, this data does not include those cases involving suspects who could not be located for an admission or proof.

To ensure compliance with workers’ compensation laws, the Fraud and Noncompliance Unit within the Missouri Department of Labor’s Division of Workers’ Compensation conducts confidential investigations of allegations of workers’ compensation fraud and noncompliance. If fraud or noncompliance is evident, the case is referred to the Office of the Attorney General for prosecution.

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