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Louisiana Director of Workers’ Comp Admin Outlines Plan to Fight Payroll Fraud

Sheral Keller, the director of the Office of Workers’ Compensation Administration at the Louisiana Workforce Commission (OWCA), has written an article in which she explains how worker misclassification and payroll fraud have directly harmed Louisiana employees and taxpaying citizens in past years, and how in 2017 the OWCA Fraud Unit and the Office of Unemployment Insurance (UI) plan to work together to combat these unscrupulous and illegal practices.  The article was published in the Greater Baton Rouge Business Report and in the first quarter 2017 edition of 10/12 Industry Report.  The article includes numbers from the past two years:

“In 2016, the Fraud Unit investigated 790 allegations of fraud, with 20 having been referred to the Attorney General’s Office.  Successful criminal prosecutions resulted in restitution of $1,233,875 from nine employers and $391,018 from 11 employees.  While these numbers are impressive, they represent only the tip of the iceberg of the fraud committed in our state, mostly by employer misclassification.

“In 2015, audits of 1,068 companies by UI identified approximately 19,956 people misclassified as independent contractors rather than as employees (2016 numbers were not available at press time).  Consequently, the agency billed $1,496,778 in unemployment insurance taxes that employers owed based on the underreporting of $100,818,591 in taxable wages.”

Kellar goes on to explain that combining the personnel resources of the office of UI and those of OWCA will result in the investigation and auditing of more employers “without increasing the size of government or unduly burdening Louisiana businesses.”

Kellar writes:

“The year 2017 presents a rare opportunity for the Fraud Unit of the Office of Workers’ Compensation Administration and the Office of Unemployment Insurance, to work together in the pursuit of employer misclassification and payroll fraud.”

Sheral Kellar is the director of the Office of Workers’ Compensation Administration. She has served at the Louisiana Workforce Commission as a workers’ compensation judge since 1991 and as chief judge since May 1999.