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What should we do if we suspect employee is engaged in workers’ comp fraud?

by on
in Employment Law,Human Resources

Q. While on unpaid leave, one of our employees applied for and was granted workers’ compensation. This person has not expressed any interest in returning to work. We think she may even be working somewhere else. Can we terminate her?

A. In Pennsylvania, workers’ compensation leave does not provide job protection for the employee, but an employee cannot be terminated in retaliation for receiving workers’ compensation.

However, the employee may be entitled to 12 weeks of job-protected leave under the FMLA. If she qualifies for FMLA leave and has not exhausted her 12-week leave entitlement, then you are prohibited from terminating her (unless she has been released to return to work and does not do so).

If the employee does not qualify for FMLA leave or has exhausted her FMLA leave, she may still be entitled to job protection under the ADA. Under that law, employers are required to enter into an interactive process with the employee to determine whether she needs a reasonable accommodation for a disability, which could include a period of unpaid leave.  

If your employee has no interest in returning to work, you can terminate her, but you should engage in a dialogue with her to confirm her intentions.

Additionally, if you believe the employee is collecting workers’ compensation fraudulently, you should notify your workers’ compensation insurer, which can investigate. Typically, after providing timely notice, an employer/insurer can stop paying benefits if there is evidence that the employee has returned to work at wages equal to or more than she was earning before her injury.

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