When employees can make more when NOT working than when working, there's very little incentive to return to work, right? It's time to examine all the possible sources of "collateral source benefits" (a term I invented almost 20 years ago), to make sure you are not inadvertently making your problem worse than it needs to be. I saw one example recently where an employee stayed out of work receiving workers' compensation, used a travel pass to travel for free, and continued to accrue seniority while collecting a generous combination of benefits. Heck of a good deal, if you asked me. Where do I sign up… So, consider the impact on your workers' comp costs when providing certain benefits.
1. Salary and Wage Continuation: Some companies pay 100 percent of salary in lieu of having an employee collect workers compensation for injuries of short duration.
2. Occupational Injury Pay Supplements : Many firms pay supplemental benefits to make up the difference between workers compensation benefits and regular earnings.
3. Open-Ended Job Return: Instead of holding jobs open indefinitely, employers should hold jobs open for a specific time period, such as six or nine months.
4. Vacation and Sick Time: Companies frequently allow vacation and sick time to accrue for employees on workers compensation. Some even allow employees to borrow more sick time if they need to stay out of work longer.
5. Short-Term Disability: In some companies, disabled employees receive STD benefits in lieu of salary after six weeks. But the standard definition for disability may differ from workers comp, allowing an employee to collect both.
6. Perk Continuation: Employers often maintain ancillary benefits and privileges such as car allowances, club and professional dues, company store privileges and periodical subscriptions for employees on disability.
7. Loan Protection Policies: Individual insurance policies are available to pay mortgages and consumer loans such as car loans and credit card debts in the case of a disability.
8. Unemployment Compensation: In a few states, an employee receiving workers comp also can qualify for state unemployment benefits.
9. Pension and Retirement Plans: If these plans do not allow for offset of workers comp benefits, an employee can receive workers compensation benefits and a full pension.
10. Product Liability Actions: An employee can file an action against the manufacturer of a product that injured him to collect damages. The employer should seek reimbursement for workers comp payment from any such settlement. While these things are great perks and can entice employees to stay on the job with service to your company for many productive years, in the wrong situation that benefit can be offset if you do not combine the benefits with a complete injury management program — with excellent employee communication.
Fail to communicate with your employees and I guarantee your costs will go up. Involve all departments. In a large company, human resources, labor/industrial relations, workers' comp and employee benefits and compensation departments must all be involved in designing, administering and maintaining policies. Incentives to remain at and return to work must be built into the management systems. Disincentives must be removed from all direct and indirect sources. Substantial savings can be achieved when a company coordinates its salary, benefits and compensation programs so employees are not rewarded by staying out of work.
For more cost savings tips go to WC Cost Reduction Tips.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
