Senate Bill 58, a workers’ compensation Bill, amends Chapter 616D of the Nevada Revised Statutes. Chapter 616D addresses prohibited acts, the penalties for such acts and what offenders can expect with respect to prosecution of such acts in the context of industrial insurance fraud.
As in many states, Nevada has included the prohibited acts/penalty section, dealing with fraudulent acts of employees and employers in the context of either an employee lying about a material fact to obtain workers’ compensation coverage for an alleged industrial injury or an employer lying about a material fact to avoid providing coverage to an injured employee.
SB 58, which will become effective on October 1, 2011, specifically makes it a misdemeanor for an employer to knowingly make a false statement or representation or conceal a material fact regarding the eligibility of a person claiming industrial insurance benefits of less than $250 and a category D felony if the fraud regards benefits of $250 or more.
Existing law already penalizes employers for fraud with respect to making false statements or concealing facts regarding the amount of payroll upon which their premiums for workers’ compensation coverage were based. In essence, SB 58 adds the same penalties for employers for fraud regarding employee eligibility for workers’ compensation benefits as already exists for employees who act fraudulently in claiming eligibility for workers’ compensation coverage. Among other things, the act protects whistleblowers who report employer fraud, allows the Attorney General and the Division of Industrial Relations to share information regarding such employer fraud and authorizes the Attorney General to prosecute employers for such fraud and requires all employers to allow inspection of their books and records by the Attorney General when investigating such potential fraud.
The fact is that this new law will assist the Division of Industrial Relations and the Attorney General in ensuring that if a Nevada employer attempts to lie with respect to covering a valid workers’ compensation injury of one of their employees, both the employee and the state have some recourse. Moreover, smart Nevada employers will now know with certainty that any attempt to avoid paying legitimate workers’ compensation benefits will result in prosecution. Such certainty adds to the legitimacy of the entire Nevada workers’ compensation statutory scheme.