Since its inception, workers’ compensation (WC) law has been one of the most misunderstood and misused, while generating one of the greatest costs to businesses. Wisconsin became the first state to pass a comprehensive workers’ compensation law in 1911, and by 1948, all states had similar laws. With good intent, these State workers’ compensation systems were originally designed as a “grand bargain” between employees and employers in which employers would give up certain common law defenses in exchange for immunity from negligence actions. But since then, some loopholes around these laws have cost employers billions, and made a lot of attorneys very wealthy.

According to the Bureau of Labor Statistics (BLS), 2.9 workplace injuries occurred for every 100 full-time employees in 2018, totaling about 3.3 million nationally. Collectively, workplace injuries cost the US economy close to $53 billion per year, or roughly $1 billion per week. In addition, the Society for Human Resources Management (SHRM) reports that OSHA adjusted penalties for safety violations in 2019 included:

 

 

  • Serious violations, other than serious violations, and posting violations rose from $12,934 to $13,260 per violation.
  • Failure to abate increased from $12,934 to $13,260 per day after the date recorded on an OSHA citation for correction of the violation.
  • Willful or repeated violations rose from $129,336 to $132,598 per violation.

Clearly, minimizing workplace injuries can help reduce workers’ compensation costs as well as medical expenses, and lower employer’s liability for negligence while improving employee performance standards.

In December of 2018, 512 workers’ compensation professionals were polled at the National Workers’ Compensation and Disability Conference and the survey results revealed that over half of respondents identified escalating medical costs as the biggest challenge facing their workers’ comp program, and nearly everyone identified cost-containment as their top priority. It is obvious that action needs to be taken to curb the escalating costs of worker’s compensation claims.

Here are five steps that can be implemented immediately to help reduce the number of claims:

1. Evaluate the culture of safety at the workplace—Communication and collaboration is the key here. Bring safety issues and practices to the forefront, bring in a fitness trainer if necessary and a safety consultant. Create a safety committee to address safety issues and workplace accidents.

 

 

2.Incorporate technology where possible—Utilize technology to take the place of repetitive motion job requirements and assist with tasks that may lead to injuries. Examples include robotic exoskeletons that can enable nurses to lift patients with ease, helping to avoid crippling injuries and making their jobs potentially safer. In the construction industry, wearables such as high-tech vests and helmets that vibrate to alert employees to potentially dangerous surroundings help reduce the number of injuries.

3.Train for safety—For ergonomic related injuries, focus on training employees proper movement techniques, when and how often to rest, and so on. There are scores of free videos online that help with this type of training.

4.Consider flextime or remote workers—Where possible, allow employees to work from home where they know they are in a safe environment. Allowing projects to be completed without coming to the workplace can help reduce the number of WC claims.

4.Update your workplace violence and harassment policies—By including a thorough harassment and workplace violence policy in your employee handbook, you are offering employees resources for them to use if they experience mental health issues such as PTSD or if they are a victim of domestic violence, for example. These will serve as a first step resolution to help prevent a WC claim.

Taking action before workers’ compensation claims are filed is the best, most cost-effective way to prevent or at least reduce costly WC claims against your company. Also taking advantage of a human capital management (HCM) system like Worksite Pay that can provide you with full access to licensed agents who are committed to streamlining WC insurance so you can get the protection that’s best for you and your company.

Johnny Duncan is a business writer and consultant partnering with business leaders to provide workforce management solutions including leadership coaching, customer service training, people-to-job matches, and conflict resolution.  He can be reached at johnny@duncanconsult.com or by visiting HRVitamin.com.