Employer’s Guide to Dealing with Fraudulent Employee Claims
Claims of both:
False expense claims, and
False compensation claims
UK employers are losing more than £1bn a year due to false expense claims, this is almost 25% of the total paid by companies, according to a survey.
A survey of more than 4.8 million expense sheets by employee expense service provider Global Expense found that fraudulent expense claims account for around £350 million, while £671 million are paid out. pounds sterling to employees for non-recoverable expenses in accordance with company policy.
The highest claim was £24,000 for a week of training, while the purchase of 20 bibles, haircuts and even a betting slip were some of the income recorded as expenses.
David Vine, CEO of GlobalExpense, warned that companies are wasting money by not verifying claims. “Not all out-of-policy spending is bogus: it may be that an employee has exceeded the spending limit by £1 or failed to produce a valid receipt. But this is an area where public figures and professionals can forget. his ethics,” he said.
If an employer finds a suspicious claim, the employer must withhold payment pending investigation. A full investigation must be conducted to ensure claims are not improperly held and to determine if disciplinary action is necessary.
If invalid expenses are accidentally paid, the overpaid expenses can be deducted from the employee’s salary. This action must be exercised in a reasonable manner (so as not to break the trust between employer and employee). It is also good practice to obtain the employee’s written consent for the deduction or include a specific clause in the employment contract that allows such deductions.
If evidence of fraud or deception is discovered, the employer must take disciplinary action, following its policy and statutory minimum disciplinary procedures. Any sanction must be appropriate to the seriousness of the offence. Minor violations of expense policy may require only a casual conversation, while deliberate fraud or deception on a large scale could warrant summary dismissal for gross misconduct. In certain cases, the employer must consider criminal prosecution.
Workers are now bombarded with ads asking ‘have you had an accident at work?
The inevitable consequence has been an increase in fraudulent compensation claims against employers. The initial reaction to these claims could often have been to make a quick and sometimes generous payment, rather than endure the time-consuming and very expensive legal process. For example, £7,000 could settle an injury claim, going to court could cost several times more than this in legal fees, and management time is wasted.
Most companies are insured for employee claims, and the easy payout will be much more expensive in the long run. Encourage more claims to be made. Increases the insurance premium to be paid in future years.
It makes good business sense to ensure that compensation claims are thoroughly investigated before any payment is agreed. Claims are often dropped when it becomes clear that the claims will be fully investigated.