Workers’ Compensation Law is a remedial humanitarian statute that the courts and the Workers’ Compensation Board have mandated to be broadly construed as it was created as a safety net for the injured worker. But for many injured employees it has become a trap. Insurance carriers and employers increasingly use the system not to support recovery, but to grind down injured claimants and their own workforce respectively with delays, denials, and false defenses and line their pockets. The goal is simple: avoid paying for treatment and lost wages to starve workers out until they return to the job injured, desperate, and still in pain. Is it any wonder that for over a decade the private workers’ compensation system has experienced strong profitability?
The playbook is well established. Carriers file boilerplate objections to even the most clear-cut claims, disputing injuries that multiple doctors have verified. They demand redundant “independent medical examinations” conducted by hand-picked, insurance-friendly doctors—appointments that last barely two minutes yet produce dozens of pages of reports dismissing injuries as exaggerated or unrelated. These medical opinions are not worth the paper upon which they are printed, but they are gold to a carrier seeking to avoid paying medical and/or indemnity benefits to the injured worker. Employers, knowing their workers can’t survive without wages, back these tactics with pressure campaigns: “light duty” offers that don’t exist, thinly veiled threats of replacement, or outright refusals to accommodate recovery. These are not honest disputes; they are manufactured defenses meant to run out the clock.
Another common delay tactic is the raising of Section 114A (or fraud) under the Workers’ Compensation Law. Compensation insurance carriers raise this defense on the flimsiest basis with the intent of securing a direction from a Law Judge to: temporarily or permanently suspend a claimant’s indemnity benefits; deny medical treatment for an established site of injury or condition of injury; and/or deny the amending of a compensation claim to include an additional site or condition of injury.
Every delay works to their advantage. Benefits are withheld for weeks or months while hearings drag on. Medical bills mount, rent falls behind, families buckle under the strain. Workers soon face an impossible choice: hold out for justice and risk financial ruin or give up the fight and return to work still injured. Insurers and employers bank on the latter. They know most people cannot stay afloat long enough to see their cases through, and they exploit that reality.
New York’s transit system offers a stark example. After the MTA outsourced its workers’ comp program to Sedgwick in 2025, more than 3,500 injured employees saw payments delayed or cut off. Union leaders accused the agency of using the breakdown deliberately, arguing that starving out injured workers was cheaper than paying claims. “They’d rather have injured transit workers coming back to work than get them paid on time,” said TWU International President John Samuelsen. For workers like conductor Emily Louise Allen, the result was devastating: “The last thing anyone should worry about when they’re trying to heal is whether they can pay the light bill.”
This is the quiet fraud no one talks about, not staged by claimants, but by carriers and employers who file spurious defenses and hide behind legal loopholes. They flood the system with denials they know won’t hold up if litigated, counting on the fact that most workers can’t endure the months or years it takes to prove them wrong. By then, the damage is done: the worker is back on the job, still hurt, while the employer and insurer pocket the savings.
The human cost is staggering. Premature returns lead to re-injury, chronic pain, and long-term disability. The psychological toll is just as severe, with workers reporting anxiety, depression, and humiliation at being treated like fraud when fraud is in fact on the other side of the table.
The winners are obvious. Insurers profit more and more, year after year, by avoiding payouts. According to Donna Glenn, the Chief Actuary at the National Council on Compensation Insurance, the private workers’ compensation system remains strongly profitable for what will be the 12th year in a row, due to underwriting gains and declining claim frequency, among other things. Employers benefit from lower premiums and a replenished workforce. The insurance friendly panel of IME doctors get paid. But the workers—the very people the system was meant to protect—are left to shoulder the cost, their injuries compounded by the betrayal of a system stacked against them.
Until there is sufficient enforcement of penalties for filing knowingly false defenses, strict timelines for benefits, and independent oversight free from employer influence, this cycle will continue unabated. Workers’ compensation cannot function if delay and deception are more profitable than the care it was intended to provide.
Today, too many Americans are forced back to their jobs because they have been bullied and starved into returning, they do not return because they are healed. That isn’t protection. It is coercion dressed up as law, and it leaves the nation’s workforce working wounded.
Charlemagne Yawn, Chair of the Workers’ Compensation Department, and Christopher Long, construction accident attorney, are part of Liakas Law, P.C., a family-run, community-based firm in New York City focused on labor law and workers’ compensation disputes. For more information, call (212) 937-7765.
