Reducing Workers’ Compensation Costs

Recent years have seen definite drops in employee work-related injuries. This is a happy development, but, unfortunately, has not lead to corresponding drops in workers’ compensation insurance premiums to employers. Despite this, there are ways to help reduce the cost of your workers’ compensation.

The first way is the most obvious – continuing to reduce injuries. Continuing to keep up with the latest safety measures and technology to reduce work-related injury is an excellent way to ensure continuing drops to injuries. Making sure your machinery, work place, and equipment is in good repair is also vital.

Next, make sure your staff is receiving adequate training. Training manuals and videos are good tools for this, but it is also important to make sure that the employees are actually reading and absorbing this material. The material also needs to be up-to-date. For example, if you have implemented new safety procedures and new safety technology, it is imperative that manuals and training materials are updated accordingly.

Third, it can be beneficial to incentivize your employees. Set goals for meeting particular safety benchmarks, and make the benefits applicable to the entire workplace. This not only will compel each individual employee to try to maintain safety standards, but will also generate an atmosphere of cooperation and positive peer pressure to make sure that the safety procedures are appropriately utilized.

It should also go without saying that you need to be honest with your workers’ compensation insurance company. Make sure the company is aware of the safety procedures you have implemented and maintain an open dialogue to make sure that your premiums are set appropriately.

If a worker is injured on the job, contacting the appropriate medical personnel immediately is vital. This will help ensure that the worker does not sustain further injury.

If you have failed to maintain insurance, a worker gets injured, and the Uninsured Employers Benefits Trust Fund is seeking to place a lien against your business, another way to “after the fact” help reduce the cost is to seek assistance from a lawyer trained in workers’ compensation matters. That attorney may be able to help you negotiate payments or even reduce the final lien amount with the Trust Fund.

Businesses should take all available precautions to help reduce their workers’ compensation costs through training and procedure. If a lien or judgment is established, the business should contact an attorney to help negotiate that amount. I have significant experience and training in workers’ compensation, and can help you. Contact me today at 714-516-8188 to discuss your business and its liabilities.

Department of Labor Wants Changes to Workers’ Compensation

Under the current workers’ compensation system, each state more or less makes its own set of laws. These laws vary wildly between states. For example, Texas allows companies to opt out of workers’ compensation insurance while our state of California provides harsh civil and criminal penalties for failure to carry the mandatory insurance. Meanwhile, the United States Department of Labor is weighing in.

The Department of Labor recently released a statement urging changes to the spotty, state specific approach currently in force for workers’ compensation insurance. The Department of Labor recognized that workers’ compensation is a key protection for employees. The statement called workers’ compensation insurance a “key component of the country’s social benefit structure” and expressed concern that it has no federal oversight and a lack of federally mandated minimum standards. The Department of Labor recognized that other social benefit programs have grown, citing the Affordable Care Act, Social Security, and Medicare, while the benefits provided to workers under workers’ compensation system have failed to keep pace, and have sometimes eroded.

The Department of Labor further expressed frustration  that the actual cost of a work-related injury is often borne in large part by the employee, and not by the actual employer. With high insurance premiums and constantly rising medical costs, this puts injured employees in very real danger of financial disaster and bankruptcy. Recent changes in workers’ compensation benefits were recognized, and that the result of these changes was often a diminished amount of benefits and security to a worker.Specifically noted were denial claims that were previously compensable, discouraging workers from filing a claim at all, and a decrease in the cash benefits awarded. Higher evidentiary bars, opt out systems, and exclusion of certain injuries also made the list of concerns.

Ultimately, the Department of Labor concluded that a dramatic overhaul is necessary in order to prevent the continued trend of erosion to benefits provided to workers. These changes would include increased benefits to the worker while decreasing costs to the employer. The Department of Labor also did not overlook the fact that the first step would be continuing efforts to reduce the incidence of work-related injuries in the first place. The Department of Labor goes on to explore whether the federal government should step in to provide more oversight, and whether it may be important to expand other social programs such as Medicare and social security.

In today’s political climate it is clear that change is imminent to many programs, including workers’ compensation. I can discuss with you what changes are likely to happen and how to make sure your business is ready for the future. Contact me today at 714-516-8188 for an appointment.

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