In workers' compensation fraud, which type involves an employer misrepresenting payroll information?

The correct answer focuses on premium fraud, which occurs when an employer deliberately misrepresents payroll information to reduce the amount of workers' compensation premiums they are required to pay. This misrepresentation can involve under-reporting the number of employees or their respective wages, which directly affects how much the employer pays for insurance coverage. By inflating employee classifications or misclassifying them to a less hazardous category, an employer can lower premiums even though the actual risk associated with their workforce might be higher.

This type of fraud can significantly impact the workers' compensation system by potentially leading to inadequate funding for genuine claims when an employer is not contributing the correct amount based on their true exposure. Understanding these premiums is crucial to maintain the integrity of the workers' compensation insurance system and ensure it is adequately funded to support injured workers.