Fighting fraud: Is it OK to spy on employees?

Suspect an employee on medical leave is milking the system? You may be surprised to find out how far courts will let you go to prove it …

Medical leave fraud can have a crippling effect — in terms of cash and productivity — for companies.

A recent court decision in Chicago made it clear that spying on employees was a valuable and legal way for employers to fight FMLA fraud. Here’s what happened:

An Indiana auto parts factory employee was fired for abusing her medical leave, based on the findings of an off-duty police officer (hired by the company). The police officer saw the employee, who was on leave for migraine headaches, working for her husband’s business.

The woman sued, but the court upheld the company’s decision, stating that the company acted based on an “honest suspicion” that the employee wasn’t using her leave “for the intended purpose.” Because of the employer’s honest suspicion, the company did not violate the employee’s FMLA rights.

But be careful. Even though courts generally side with employers in cases like this, there are plenty of exceptions. Recreating Orwell’s 1984 environment for employees on medical leave probably isn’t the best idea — especially if you don’t have an inkling of the “honest suspicion” that courts need to see.