SafetyPolicy Podcasts

What is Worker’s Compensation?

Workers’ compensation is an important tool for both employers and employees.

• It ensures an injured or ill worker may receive benefits without litigation.
• It helps protect a company from a lawsuit that could damage it financially.
• It’s a “no-fault” system; neither the employee nor employer must be found legally “at fault” for the insurance to pay out benefits.

Workers’ compensation considerations

While the general concept of workers’ compensation is simple, it’s challenging to describe how the specifics apply to any given case because situations differ. The unique nature of each injury or illness and the circumstances of the worker and their position can affect workers’ compensation amounts and outcomes. Individual cases will often be more different than similar. Factors include:

• Bodily injury location
• Injury severity
• Recovery duration
• Potential work return

Is workers’ compensation required?

Generally, yes. All states except Texas and Wyoming mandate that businesses with employees have workers’ compensation insurance. Companies operating in these states may still need workers’ compensation insurance if they have employees working in other states.

Workers’ compensation requirements by state

Because workers’ compensation is primarily regulated at the state level in the United States, we operate in a system where specific information about workers’ compensation laws, benefits, requirements, and penalties for not purchasing workers’ compensation insurance differ—often significantly—by state.

In most states, companies can purchase workers’ compensation insurance from any private insurer, subject to state requirements.

How does workers’ compensation work?

Workers’ compensation provides wage replacement and medical benefits if an employee becomes injured, ill, or disabled due to an incident that happened in the course and scope of employment. Benefits are paid after filing a claim, paid out by the workers’ compensation plan. In exchange for payments made by the employer to the insurance provider, workers’ compensation helps simplify the process and limit legal battles. Key parts of workers’ compensation are the benefits the worker receives, the types of policies available to the employer, and how the coverage is paid for.

What does the workers’ compensation process look like?

While the broad outline of what happens after an incident is generally the same in most workers’ compensation environments, remember that state-by-state and other differences can come into play. Here’s a typical sequence of events:

• A construction worker accidentally drops a brick on a co-worker’s foot. While their company employs and encourages safety measures—like requiring steel-toe shoes—the worker was injured and decides to start the workers’ compensation process.
• Because the worker chooses to accept workers’ compensation—and is now on the path toward receiving medical benefits and/or wage replacement without litigation—this employee gives up the right to sue the employer for the injury in most cases.
• In return, the construction company can now work with its workers’ compensation insurance carrier and other third-party professionals, such as healthcare workers, to help the worker receive the care needed to return to work in due time.
• Depending upon coverages and case details, the worker could receive benefits, including wage replacement and payments for medical care and rehabilitation. These are paid by the insurance plan, not the company.

What’s covered by workers’ compensation insurance isn’t always obvious because workplaces and work duties vary. Some incidents that may be covered by workers’ compensation include:

• An employee is injured while driving a company car for work.
• A remote worker sustains a job-related injury away from company property.
• A worker catches an illness while handling hazardous job-related materials offsite.

Again, many variables apply. What is covered in one state jurisdiction may not be covered in another.

Cost of workers’ compensation

The cost of workers’ compensation varies, though it begins with a calculation.

Generally, insurance providers start with a base rate (for example, $.30 per $100 in payroll). If a business pays an employee $40,000 in payroll, the starting premium for that employee would be $120. Base rates vary. Workers whose job tasks make them less likely to become injured or ill on the job have lower rates per $100 in payroll. Each state uses a specific source for these ratings.

The insurance provider then applies carefully researched rate factors, modifying the base rate. A factor greater than 1 raises the rate. A factor lower than 1 lowers the rate. The net rate is a result of all factors multiplied together.

Mitigating workers’ compensation costs

Build a safety program

A successful safety program—incorporating training, monitoring, and reporting—can help    reduce workers’ compensation costs for employers.

Build a culture of safety

Organizations committed to safety, making it a priority at all levels without exception, can often reduce risk.

Hire smart

Qualified employees generally have less risk of being involved in an on-the-job incident.

Train effectively

Workers who know how to perform tasks and use equipment correctly can lower their risk of injury or illness.

Establish a return-to-work program

In our experience, the longer a worker is off the job, the less likely they’ll return to their prior level of performance and job satisfaction. Alternative work can be an option in some situations.

How do workers’ compensation claims work?

 

Filing a claim for workers’ compensation is often dissimilar to filing a claim for other types of insurance, such as insurance that covers property damage. Because workers’ compensation insurance is carried by the employer and covers injuries and illnesses affecting the employee, the process for filing and managing a workers’ compensation claim involves multiple parties.

1. Before a claim: Typically, an employer will train a supervisor to report injuries or illnesses that may be workers’ compensation to the plan provider. We offer you resources to help you conduct this training.
2. Reporting a claim: In the event of an accident or illness, once safety and proper medical attention are underway, the supervisor should help determine the appropriate course of action, complete an injury or illness report, and communicate with the employee about workers’ compensation procedures. The company will then file this report with its workers’ compensation carrier. Prompt reporting can help speed results.
3. Managing a claim, recovery, and return to work: Communication between the supervisor, employee, carrier, and medical professionals will occur to ensure appropriate benefits and the affected employee’s possible return-to-work timeline.

Do employees get full pay while on workers’ compensation?

 

Workers’ compensation does not pay a full salary. However, employees are entitled to a certain percentage of what would have been their regular gross wage. Amounts may differ with minimums and maximums varying by state. Tax implications and company benefits may also affect benefit amounts.

 

Can employees work while on workers’ compensation?

Yes, employees can still work—and receive pay or salary—while receiving workers’ compensation benefits for medical treatment, rehab, or disability. These benefits are independent of the employee’s ability to work, meaning that even if an employee is able to quickly return to their position, the costs for an initial hospital visit and ensuing medical treatment are still covered.

This question usually arises when people think of being “on workers’ compensation” as receiving ongoing payments as a wage replacement benefit. It would be more accurate to ask if a worker could receive wage replacement through workers’ compensation, even if they continue to work.

While it’s much more common for an employee to receive wage replacement only to compensate for lost hours or work, it is possible—in some states and under certain circumstances—for a worker to receive wage replacement through workers’ compensation while continuing to work.

Can employees lose their job due to an injury?

Any serious accident or illness can leave an employee physically unable to perform their job. Workers’ compensation cases shouldn’t be treated any differently than situations where the injury or illness wasn’t job-related.

Additionally, it may not always be possible for workers to phase back into their original jobs over time, depending on the level of therapy or healing necessary. These scenarios may also lead to a loss of employment:

• No alternative role available
• Performance in a new role

It’s important to note an employer can’t fire an employee for filing workers’ compensation—filing a workers’ compensation claim is legal and protected—but companies in at-will employment states can fire employees while they receive workers’ compensation benefits. Typically, being fired or let go will not prevent a worker from receiving workers’ compensation benefits.

Based on jurisdiction, a fired employee may receive workers’ compensation wage loss benefits if their injury or illness led to job restrictions which were not accommodated by the employer.

What isn’t covered by workers’ compensation?

Workers’ compensation benefits won’t cover the cost of medical treatment for injuries or accidents that occurred outside of work or for pain and suffering. State and federal laws and policies define work-related injuries.

Incidents that may not be covered by workers’ compensation include:

• Accidents or injuries that occur outside of the workplace or in non-work capacities
• Accidents or injuries that occur while an employee is intoxicated
• Accidents or injuries that are proven to have been caused by an intentional, risky, non-work activity at the workplace
• The accident or injury didn’t occur at work
• When in doubt, report

Regardless of whether you think an injury is covered by workers’ compensation, you should still report it and let the process sort it out. Generally, if it’s determined that a worker is injured while on the clock performing their job duty, workers’ compensation can likely provide benefits, from medical coverage to wage replacement or something else.

That’s all we have for today, if you have questions, you can always call us at 505-345-3477. You can visit us at our website @ www.builderstrust.com. You can even download our app at the Apple or Google play store.

Thank you for listening, have a great day, and be safe!

Workplace accidents do happen and their costs can be substantial. When an incident occurs, what is your organization’s reaction? Conducting incident investigations can identify the causes of the incident and will help to prevent such incidents from reoccurring within the workplace.

In this episode, we’ll discuss the reasons and benefits of investigating accidents and incidents in the workplace.

Accident investigations are often poorly understood in the workplace. As a result, they can lead to finger-pointing and meritless blaming. Productive workplace investigations identify the causal factors of an incident and make recommendations for corrective action by determining what happened, how it happened, and why it happened. Effective investigations focusing on the “Root Cause” of the incident can benefit an organization in many ways, such as:

• Determining the exact cause of the incident;
• Determining the likelihood of recurrence;
• Enabling the development of risk management controls to prevent future incidents; and
• Demonstrating organizational concern, bolster employee confidence and improve public relations.

Incidents that result in injury/illness, damage to a vehicle, property damage, or injury to a third party or their property should be investigated, as well as environmental spills/contamination, theft, workplace violence, vandalism, et cetera. Many organizations broaden their approach to incident investigation to include all “Near Miss” incidents, those incidents that do not result in actual or observable injury or damage to an employee or third party.

Some helpful tips when faced with a workplace incident that requires an investigation include:

• Securing the area where the incident occurred to prevent future injuries or property damage;
• Visiting the incident site before the evidence is disturbed;
• Document observations of the condition of the incident site;
• Photograph or video tape the incident scene from all angles;
• Identify and conduct general interviews of eye witnesses and other individuals who could provide pertinent information;
• Review other sources of information, such as design specifications, drawings, policies/procedures, maintenance records, employee training records, et cetera; and
• Notify law enforcement (If warranted), insurance carriers, and other relevant officials associated with your organization.

Many organizations utilize a risk manager and/or safety director to conduct incident investigations. Often times an organization’s safety committee can be a vital asset in incident investigations and review. Both can equally be beneficial as long as investigations are fair and equitable treatment is provided to all sides involved in the incident. For incident investigations to be an effective tool for an organization, an internal incident report should be prepared. The following can be useful in developing information to be included in such a report:

• Background Information – where and when the incident occurred, who and what were involved, and who witnessed the incident;
• Account of the Incident (What Happened?) – sequence of events, extent of damage, accident type, source of energy/material (if necessary);
• Analysis of the Incident – direct causes, indirect causes (unsafe acts and conditions), basic causes (policies/procedures, personal/workplace factors, et cetera);
• Recommendations to prevent recurrence for immediate and long-range action to remedy causes.

Incident reports should be maintained on file permanently. Completing a report and filing it away with little or no action will do nothing to prevent the incident from occurring again. The report should be provided to senior management or others who can do something about the recommendations submitted.

Workplace incidents cost financially and often times affect individuals mentally and physically. Incident investigations can help prevent unnecessary and preventable incidents within the workplace; however, it is a decision an organization must make to ensure such investigations occur to reap the benefits.

You can watch a tutorial on this topic by visiting our website @ www.builderstrust.com or download the builderstrust app at the Apple or google play store. Thank you again for being with us, hope you have a great day and be safe!