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Workers compensation scam

workers compensation scam is the type of scam a worker plans to dupe an employer. Mostly workers compensation scam involves physical harm deliberately inflicted by the workers themselves  just to gain some cash from the company. This scam is rare but happens especially if there are bad conditions of labor at a company.In revenge a worker may think of doing something that can make him reach the wage expectations. The scam is very trick in a way that some workers can formulate a harm to themselves just to make the company pay even when they know it is a danger to their health. This scam is common in companies that employ people on a temporal basis and if manual work is the core purpose of such employees.

Workers' compensation  is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue their employer for the tort of negligence. The trade-off between assured, limited coverage and lack of recourse outside the worker compensation system is known as "the compensation bargain". One of the problems that the compensation bargain solved is the problem of employers becoming insolvent as a result of high damage awards.
The system of collective liability was created to prevent that, and thus to ensure security of compensation to the workers. Individual immunity is the necessary corollary to collective liability.
While plans differ among jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment.
General damage for pain and suffering, and punitive damages for employer negligence, are generally not available in workers' compensation plans, and negligence is generally not an issue in the case.

What causes workers compensation scam

workers compensation scam is a clear indication of some confusion or dissatisfaction of some things by workers .though in other cases it can be just fraudulent minds of an employee despite given enough wages.

1: Low wages

Although economists talk about the high cost of labour in South Africa, at certain enterprises and in certain Industries, strikes take place simply because the minimum wage levels were very low. These employees have very little to lose by going on strike because they aren’t taking home very much money anyway.

2: Poor communication within the employer organisation

One of the key reasons for strikes is the high level of mistrust between employers and trade unions. More than one strike has taken place because the employer pleaded poverty during the negotiations, but announced healthy profits before the end of the wage negotiations! Employers must be very careful for mishaps like that, because it can shatter employee-employer relationships in the wink of an eye. Make sure that the rest of your business is synchronised with your Human Resources Department when you are embarking on wage negotiations and the one hand knows what the other hand is doing.

3: Disparity with increases awarded to senior people

Employees or trade unions will not take you seriously during negotiations when you argue for limiting wage increases while at the same time the Boards of Directors or Remuneration Committees have declared enormous increases or special payments to directors and/or senior managers.

In the first instance this suggests indifference to the plight of employees and secondly it creates perceptions that increases due to employees are being given to other parties within the enterprise. In some cases the increases given to directors have been so high that the negotiating capacity of company negotiators has been totally compromised.

Therefore employers must use their discretion when handling matters in such a fashion, because it is will result in employee disengagement. Just this week Bobby Godsell, previous executive head of large mining company and now chairperson of Business Leadership South Africa announced that he welcomes and in fact pleads for a reconsideration of the remunerations packages of executive management in South Africa. It should not be something to be ashamed of, business leaders should be able to justify their packages without fear and reservation.

4: Employee debt

This has become a serious problem. The reality in South Africa is that some employees are in so much debt that they are left with as little as 20% of their pay after paying their creditors. There are so many emoluments attachment orders against them, that they don’t even take much money home because of the deductions employers make in terms of these court orders. This was one of the biggest contributors that lead to the Marikana strike.

Godsell believes this to be a key influencer in the employee’s desire to demand increased wages. These employees have very little to lose by going on strike because they aren’t taking home very much money anyway. So they are prepared to take the risk of going on strike to get a bigger increase. They also face family pressures because they have to explain why very little money is brought home. This may lead to hardened attitudes.

It is a fact that it is in the best interest of the company to train their employees in terms of debt. Yes, employers are not the ones who took out the debt, but the collection of the debt becomes the Employer’s problem on behalf of the debtor. The money is deducted straight from their salary by court order, and these employees end up taking home very little. It then becomes very easy to blame the employer who does not pay enough! This is what is crippling the mine workers industry. Mine workers are some of the best paid workers in the country, and if they are struggling with poverty, one should expect the situation to be even worse in other industries.

Ultimately, employers can no longer avoid these issues and say it is none of their concern, I suspect because in the end it most probably will come back to haunt you. Can you afford such an attitude?

5: Consumerism

Employees look at their colleagues and see that they are purchasing expensive motor vehicles and household goods and this gives rise to feelings of anger and envy. We are in an age of consumerism where it is expected that the person primarily responsible for purchasing goods for the family should do so on a regular basis.

Although the need is articulated in different ways, employees strive to increase their purchasing power to obtain what today are regarded as being basic purchases such as TVs, toasters, vacuum cleaners etc. Once employees are unable to obtain the ‘basics’ for their families, feelings of wrath fill them and with no wage increase, a scam will become inevitable.

6: Expectations

The reality is that Affirmative Action, Employment Equity, Black Economic Empowerment, the skills development legislation, the establishing of SETAs and a government sympathetic to workers has created expectations. Despite these efforts, there are many employees who feel they have not been given their “place in the sun” and they have not benefited from the new democracy.

As these issues are a reality and forms part of every organization, employers must make sure that they are aware of which factors are driving their employee’s demand and must be ready to bargain and negotiate if/when the time comes.


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