Improving Workplace Safety to Lower Workers’ Compensation Costs

Every conscientious employer wants to lower the risk associated with their workplace.  Not only is lowering the risk to our employees in the workplace the right thing to do, it can also monetarily benefit your business.  Clearly, if your employee is not injured, you will not have to pay out workers’ compensation benefits, hire an attorney, or other direct costs.  Moreover, reducing the incidences of injury can help to lower your workers’ compensation insurance premium.  There are several ways you can look into improving your workplace safety to lower your workers’ compensation costs.

One way you can help lower your workers’ compensation costs is to make sure all of your equipment is up to date and in good repair.  Some business owners try to avoid costly updates or repairs in an effort to save money. However, this can spectacularly backfire.  If you allow machines to fall into disrepair, the chances of your employee getting injured while using the equipment goes up, thus adding to your workers’ compensation costs.

Another way you can help lower workers’ compensation costs is to start a safety committee at your work.  Safety committees are groups formed from groups of your employees.  During regularly scheduled meetings, employees address common safety problems seen in your workplace, and can discuss how to improve conditions to reduce the chances of someone getting hurt.  The safety committee can also help to foster a corporate culture that promotes safety in the workplace.

Third, you can and should provide training to your managers and employees about the particular dangers that are present in your workplace.  For example, if you work in an office environment, training should include the potential dangers posed by occupational illnesses, such as repetitive motion injuries like carpal tunnel syndrome.  Providing education to your employees about the obvious dangers in your workplace can help reduce your workers’ compensation costs, as building employee awareness can help your employees identify and avoid sustaining an injury in the first place.  Providing additional training on current safety measures and the most recent safety standards also helps to reduce the likelihood of workplace injury and thus your business’s workers’ compensation costs.

If you are a business owner and have questions about your obligations under workers’ compensation, call us today.  We can help you understand the workers’ compensation system and how your business fits within it.

Why You Need Workers’ Compensation Insurance

Any business owner can tell you that there are many laws that need to be observed when setting up and running a business.  These laws range from federal tax laws all the way down to local ordinances about signage.  Mindful business owners will need to have a grasp on all the major laws and rules that could impact their business.  The laws surrounding workers’ compensation is no exception.  Although business owners work hard to reduce the likelihood that their employees will be injured on the job, it is likely that at some point, one of the employees will sustain some sort of injury in the course and scope of employment.  Once this occurs, the employee has the right to file for workers’ compensation benefits.  Once that occurs, it will quickly become obvious why you need to carry workers’ compensation insurance for your business.

The first and most prominent reason that your business needs workers’ compensation insurance is that California law requires almost all business owners to carry workers’ compensation insurance.  California labor code section 3700 provides that a business must carry workers’ compensation insurance as long as it employs one or more employees, with very few exceptions.  The penalties for failure to adhere to this law are severe.  A business owner can be charged with extensive civil fines for this.  In egregious cases, an employer could even be criminally charged for the failure to carry the proper insurance.

Another essential reason why you want to make sure to carry workers’ compensation insurance is that if you do not have insurance, your business will be directly liable for any costs for workers’ compensation benefits incurred by the employee.  Your employee will be entitled to the same type of benefits regardless of whether you carry insurance.  Especially where your worker is severely or permanently injured, he or she may require extensive medical treatment and lifetime benefits.  These types of costs can be enough to benefit a small company.  There are ways to obtain assistance in making those payments through the state.  However, this is not a gift; the employer will be responsible for repaying the benefits paid by the state on the employer’s behalf.

We have extensive experience with helping business owners understand their obligations with regard to workers’ compensation insurance.  Call us today to discuss your business and what we can do to help.

Do I Have a Right to My Employee’s Medical Records?

Workers’ compensation can be a confusing process for both the injured employee and the employer.  Like other civil litigation, workers’ compensation requires a large amount of paperwork.  There are many forms that need to be filed in a timely manner, the employee will have to file paperwork starting the claim with the court, and doctors will need to fill out and return forms concerning the employee’s injury.  Medical conditions can be just as complicated and confusing for laypeople as the workers’ compensation claim itself.  If your business is facing a workers’ compensation case, you may be wondering if you can get a copy of your employee’s medical records.

The short answer to this question is “yes.”  Although employees may balk at this as it seems like an invasion of privacy, it is important for employees and employers both to understand that medical records can be crucial to the workers’ compensation process because an employee’s claim can be impacted by the existence of a pre-existing injury.  For example, if your worker is claiming he or she has developed carpal tunnel syndrome during the course and scope of employment, the employee can be forced to disclose medical records that show that he or she has sought treatment for the same or similar condition in the past.

Employers should keep in mind, however, that an employer cannot force an employee to provide copies of all medical records, despite the lack of connection between the work-related injury and records of past medical conditions.  Taking the same example of the employee claiming he or she has developed carpal tunnel syndrome, the employer could not likely require the employee to provide copies of medical records concerning skin cancer treatment.  Employers should also keep in mind that the Health Insurance Portability and Accountability Act (HIPAA) also applies to workers’ compensation cases.  The purpose of HIPAA is to help protect the privacy and security of medical records.  In most situations, a person would need to sign a release for another entity to receive a copy of health records. Workers’ compensation cases have a limited exception, allowing relevant medical information to be released without individual authorization from the injured employee.  However, the medical records will only be disclosed to meet the minimum required information.

We have extensive experience helping our clients understand the type of information they may have a right to during a workers’ compensation case.  Call us today for a consultation.

How Workers’ Compensation Can Protect your Business

Workers’ compensation is an important system in California.  The system makes sure that workers receive medical treatment after receiving a work-related industrial injury.  Injured workers can receive payment for medical costs as well as a portion of replacement wages.  Clearly the worker receives protection from the system, but it is important to remember that business owners and their business structures are also protected by the workers’ compensation system.

One essential way that businesses receive protection is through the “no-fault” system under workers’ compensation.  This means that the employee is not required to prove that the business owner committed any type of negligence in order to receive compensation.  While at first blush it may seem that this is a protection for the employee, it is also a protection for the employer.  This Is because the no-fault system also prevents the injured worker from bringing a lawsuit in civil court to recover for the work-related injury.  In a civil suit, the employee would need to prove that the employer committed negligent or intentional conduct leading to the injury.  The amount of damages could be unpredictable.  By contrast, under workers’ compensation, there are specific fee schedules set out for how much an employee will be able to recover.  This system could save the employer substantial time in court as well as money for damages that employee could not recover in the workers’ compensation system.

Another important way that the workers’ compensation system protects your business is by requiring workers’ compensation insurance in almost every situation.  Workers’ compensation insurance protects your business because if your worker is injured in the course and scope of his or her employment, your business will be on the hook for the medical costs and replacement wages, regardless of whether you were actually carrying insurance.  In other words, if you do not carry the required insurance, having to pay all of these costs straight out of the business could create a significant and even detrimental impact on your business.

Finally, the workers’ compensation system helps businesses by making business owners and managers more aware of potential dangers and how to take action to help prevent injury.  Forming safety committees, keeping equipment up to date, and providing the latest safety training for employees are all ways businesses can reduce their liability, and could even reduce their insurance premiums.

We have extensive experience helping our clients understand how their business fits in the workers’ compensation context.  Contact us today for a consultation.

Reducing Workers’ Compensation Costs

All business owners know that maintaining a business can be costly.  Advertising, inventory, rent, and taxes, just to name a few.  In California, almost all businesses are also required to carry workers’ compensation insurance.  Workers’ compensation insurance can be costly.  All businesses, ranging from large corporations to small businesses, are all trying to reduce costs in order to maximize profitability.  Although California law likely requires you to carry workers’ compensation insurance for your business, there are techniques you can employ to help reduce your workers’ compensation costs.

One way to help you reduce your workers’ compensation insurance costs is to make sure you understand how your workers’ compensation insurance premium is determined.  Workers’ compensation insurance premiums are based on a specific classification system.  The more dangerous the roles of your employees, the higher your workers’ compensation rates will be.  Accordingly, you need to have an open line of communication with your insurance adjuster to ensure that he or she is assigning the correct classification to your workers.

Another way to reduce your workers’ compensation insurance costs is to make sure that your workplace is as safe as possible.  Ensure that you keep your equipment up to date and in good repair.  Creating a safety committee in the workplace can also help, as your employees can take a direct role in keeping your workplace as safe as possible.  As your employees are the ones who directly deal with all workplace conditions, they often have some important suggestions as to how to make your workplace even safer.  The fewer injuries you have in your workplace, the lower your workers’ compensation premiums will be.

Third, you should build a return to work program.  An important rule of thumb to keep in mind is that the longer a workers’ compensation claim remains open, the more expensive the claim will be.  This is because the claim will require that more replacement income benefits must be paid.  Accordingly, if you can build a program that proactively helps workers get back to work, income benefits will not have to be paid for as long a time.  A return to work program often includes allowing an employee to return on a light-duty or even part-time basis.  You will need to coordinate these plans directly with the employee’s health care provider to make sure the work is appropriate for the particular injury.

We have extensive experience helping our clients understand their rights and responsibilities with regard to workers’ compensation responsibilities.  Call us today for a consultation.

Owner/Officer Inclusions and Exclusions

Workers’ compensation is an important system to make sure that employees injured while working receive payment and medical benefits while they are recovering.  California law has extensive regulations concerning workers’ compensation.  One of the most important regulations for business owners to be aware of is the requirement to carry workers’ compensation insurance.  There are very few exceptions to this rule.  Owners of a small business or officers of a corporation may sometimes qualify for inclusions or exclusions from this requirement, however, and it is important for you to understand when these may apply if you own a business.

Although the law in California used to state that officers and directors of corporations were automatically excluded in certain cases from the requirement for businesses to cover all of their employees, this is no longer the case.  The law now provides that if officers and directors are automatically included in the requirement that all employees must be covered by workers’ compensation insurance.  If, however, the corporation is completely owned by the officers and directors, they may opt-out of insurance coverage.  If they want to do this, they will have to sign a form specifically providing that they are opting out of the insurance coverage requirement.

Sole proprietors also need to understand workers’ compensation requirements.  A sole proprietor is not generally required to provide workers’ compensation for him or herself.  The exception to this is if the sole proprietor is running a roofing business.In that case, workers’ compensation insurance will need to cover the sole proprietor. Self-employed people are generally also exempt from the requirement.

Regardless of the structure of the business, the requirement that the business carries workers’ compensation extends only to employees.  If your company uses independent contractors, it is not necessary that your insurance cover those individuals.  That said, it is really important to ensure you are correctly classifying your workers.  Simply deciding that all of your workers are independent contractors is NOT dispositive of whether they actually are employees or independent contractors.  There are many relevant factors in determining whether a worker is an employee or an independent contractor, only one of which is classification.

We have experience assisting our clients understand their responsibilities in the context of the California labor code.  Contact us today for a consultation.

Workers’ Compensation Audits

If you have your own business, you likely know there are many regulations that you need to comply with, ranging from federal tax laws to local zoning ordinances.  In California, you will also need to make sure your business complies with all the requirements of the California Labor Code, including the requirement that almost every business must carry workers’ compensation insurance covering all of their employees.  In addition to complying with the law, you will need to cooperate with your workers’ compensation insurance carrier.  One way you will need to cooperate workers’ compensation insurance carrier will be during a workers’ compensation audit.

Workers’ compensation insurance carriers will need to comply with their annual workers’ compensation audit.  It is likely that when your policy is set to expire, you will receive a letter or a phone call informing you that it is necessary to complete a workers’ compensation audit if you wish to continue using that company for workers’ compensation insurance.  Keep in mind that the letter or phone call may come from a company other than your workers’ compensation insurance provider, as many large insurance companies outsource their audit process.

In general, the audit process exists to make sure that your business still has the proper type and amount of workers’ compensation insurance.  For example, if your business has grown from 50 employees to 250 employees, it is likely your payroll will increase your insurance premium.  In general, auditors will request documents including tax forms, payroll records, and certificates of insurance if you have hired any subcontractors.  If you are unable to provide licenses and certificates of insurance for subcontractors, your insurance company will likely charge you additional premium for subcontractors’ workers’ compensation insurance.  They will also ask about job descriptions for each of your employees.  One way you can facilitate the auditing process is to ask the auditor if there is a specific order in which he or she would like the papers organized.

During the audit, your auditor will aim to make sure your business is placed in the correct rate class.  The rate class code has a direct impact on your insurance premium.  If you feel that you have been misclassified, you should immediately discuss the issue with your auditor.

We have extensive experience helping business owners understand their rights and responsibilities, including concerning workers’ compensation audits  Contact us today for a consultation.

What Is Workers’ Compensation “Leakage?”

Any business owner can tell you that running a business can be a complex proposition.  Trying to make sure your business conforms with all relevant city, state, and federal laws is an essential step before you even get to the practical aspects of your business, such as ordering inventory, advertising, and deciding when to expand.  Workers’ compensation is a very important part of your business, and the law of California provides that you must pay for workers’ compensation insurance unless you qualify under one of the very few limited exceptions.  Being familiar with the insurance system can help make sure you are properly following the rules and regulations surrounding workers’ compensation.  One major issue faced by workers’ compensation insurance carriers is “leakage.”

Leakage in the workers’ compensation context refers to payment errors.  Overpaying claims represents a major problem and challenge for insurance companies.  In general, leakage is divided into two main categories: hard leakage and soft leakage.

Hard leakage refers to erroneous payments made on claims that should not be covered.  If an insurance company pays out on a claim when the insurance policy had actually lapsed, or it turns out the injury was not compensable under the policy, would be two examples of hard leakage. In other words, hard leakage occurs when a payment is made where no types of coverage existed.

Soft leakage, by contrast, refers to when overpayments have been made on claims that are otherwise valid.  Errors in medical payments or even payments made after a claim is denied or disputed are types of soft leakage.

Another type of leakage that does not fall into either of these precise categories is vendor leakage.  Vendor leakage involves payments to outside vendors.  These would be services that are used in the investigation or in handling claims.  Private investigators, private nurse case managers, or independent medical evaluation companies are some of the most common.

Although employers may not think that these types of leakage should concern them, this is not accurate.  The more leakage an insurance company has, the more likely it will  raise rates later to make up for the unnecessary payments.

If you have questions about your business’s rights and responsibilities, call us today. Contact us today for a consultation to talk about your business.

My Employee is Injured But I Don’t Have Insurance

The area of workers’ compensation law is one that is complex and nuanced.  Employers know that it is important to follow California rules and regulations about how to conduct their business, including abiding by the workers’ compensation laws.  While there are a variety of code provisions that impose affirmative duties on an employer in the workers’ compensation context, one of the most important is the almost universal requirement for employers to carry workers’ compensation insurance.  If you have failed to follow this provision and your employee has sustained a work-related injury, you may be wondering what are the important next steps.

The first step that you should take if you failed to carry workers’ compensation insurance and the employee has sustained a work-related injury is to retain a skilled attorney.  Failure to carry workers’ compensation insurance can result in severe civil penalties or even criminal prosecution.  Accordingly, you need to consult an attorney immediately to protect yourself and your business.

Next, you need to understand that just because you failed to carry insurance will not mean the business will not be responsible for medical bills.  To the contrary, an employer can still be held responsible for payment of all medical bills associated with the treatment of the work-related injury.  In addition, unlike a typical workers’ compensation case, there is no law restricting the employee from filing a civil lawsuit against the employer.  In this type of lawsuit, the employer will be presumed to have acted negligently and cannot use the defense of contributory negligence.  The result can be a very sizeable civil award to the employee.

If your business does not have the resources to pay the benefits for the injured employee, the Uninsured Employers Benefit Trust Fund can pay the workers’ compensation benefits. After the  case has been resolved and a final sum of damages awarded, the UEBTF can pay this amount to the employee.  The employer will be responsible for reimbursing the UEBTF for everything it has to pay out to the employee.  To request payment of workers’ compensation benefits from the UEBTF, the employer must apply for payment and provide certain documentation.  Ensuring your employee receives compensation from the UEBTF does not mean that you cannot be fined or even incarcerated for your failure to carry insurance.

We have externsive experience with helping clients when they have failed to carry the required insurance.  Call us today for a consultation.

What Am I Obligated to Report to My Insurance Carrier?

Workers’ compensation is an important social program for Californians.  Workers’ compensation allows employees and employers to rest easy knowing that they are both protected in case an employee suffers a work-related injury.  In California, almost all employers, with very few exceptions, are required by law to carry workers’ compensation insurance.  Failure to carry workers’ compensation insurance can result in severe civil and even criminal penalties for an employer who fails to follow the law.  Employers who do properly carry insurance need to understand what must be reported to their insurance carrier to make sure they do not violate their policy.

If you have any questions about what needs to be reported to your insurance company, the first place you should look is your policy documents.  The insurance policy documents will be an essential source of information concerning your responsibilities.  If you fail to adhere to your policy’s requirements, it could result in your insurance carrier refusing to cover an incident.  It could even mean your insurance carrier will decline to continue providing coverage for your business at all.

In addition to those issues that your insurance requires to be reported, there are California laws that will also apply to reporting requirements.  The most important of these is the initial report of the injury or occupational illness.  As an employer, you are required to provide a workers’ compensation claim form within one day after the employee reports a work-related injury or illness.  After the employee returns this form to you, you must provide the claim form along with the report of the injury or illness to your insurance claims administrator within one working day.  In other words, if the employee reports an injury, you are required by law to report this to your insurance.

Another important reporting issue is fraud.  If you have suspicions about fraud in your workers’ compensation case, you need to report this to your insurance carrier.  Workers’ compensation fraud includes not only fraud on the part of the employee, but also the medical providers or even attorneys.  Your insurance carrier will then investigate the fraud concerns.  If there are founded cause for concern, your carrier will report the issue to law enforcement.

We have extensive experience helping our clients understand their responsibilities when it comes to workers’ compensation insurance.  Call us today to talk about your case and your business.

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