Fraud Prevention - Department of Industrial Relations





The Department of Industrial Relations (DIR) takes fraud seriously. DIR works to identify, combat and prevent fraud that affects California’s 18 million workers. Fraud costs taxpayers billions and hurts law-abiding employers as well. When employers misclassify or understate workers, report inaccurate payroll, do not report work injuries or encourage workers to submit fraudulent workers compensation claims—this is fraud. Fraud also occurs when unscrupulous medical providers abuse injured workers in the workers compensation system. Help protect the integrity of our programs and report fraud when you see it.

How to Report Fraud

  • Anti-Fraud Unit
    The Anti-Fraud Unit deals with suspending any physician, practitioner, or provider from participating in the Worker’s Compensation system, per Labor Code § 139.21 and staying liens of criminally charged providers, per Labor Code section § 4615.
  • Labor Enforcement Task Force
    The Labor Enforcement Task Force is a coalition of California State government enforcement agencies and local agencies that work together to combat the underground economy. When employers use fraudulent business practices as their model, it hurts workers and compliant business, while also being a burden on taxpayers.
  • Misclassification
    Misclassification of workers occurs when an employer improperly classifies their employees as independent contractors so that they do not have to pay payroll taxes, minimum wage or overtime, or comply with other wage and hour law requirements such as providing meal periods and rest breaks.
  • Wage Theft
    Wage theft occurs when employers do not pay workers according to the law. Examples of wage theft include paying less than minimum wage, not paying workers overtime, not allowing workers to take meal and rest breaks, requiring off-the-clock work, or taking workers' tips.
  • Workers’ Compensation Insurance Fraud
    Workers’ compensation fraud can take the form of health care providers billing for services never performed, employers under-reporting payroll, and attorneys or claims adjusters facilitating fraud.
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