Layoffs are happening all around us, and can greatly impact your workers’ compensation experience. My topic focuses on discouraging a workers comp catastrophe during a reduction in force.
Here are some things you can do to prepare for layoffs. In addition to my suggestions, over the next few days, Attorneys Ted Ronca (NY), Brad Bleakney (IL) and several other attorneys will offer suggestions on ways to reduce exposure to workers’ comp claims during layoffs.
1. Notify your broker and claims administrator. Make a plan, which will be different depending on the laws in your state. Include the human resources department and legal counsel in this planning session.
2. Try to place any workers currently out of work on TTD (temporary total disability benefits) back to work before their positions are eliminated. Once these workers do not have any work to go back to, it can be a long time before you can show they are capable of working, so try to get as many back to work prior to the layoff as possible.
3. Limit severance payments to those employees who actively at work. This may discourage filing workers’ comp claims without merit. This may make the lure of getting a quick workers’ comp settlement less attractive because that is a more tenuous source of income than unemployment benefits.
4. Eliminate disincentives to collect unemployment and workers’ compensation benefits. In previous blogs, we’ve talked about eliminating collateral source benefits, and this is one which is relevant now. In some states, an employee is eligible for unemployment benefits if they are “able to” work, thus, if they are disabled, their unemployment benefits could be jeopardized. Employers should challenge unemployment claims of employees on workers’ compensation if possible in your state.
5. Use outplacement professionals and offer services that can make finding part-time or alternate employment possible. This makes the transition smoother when employees know they will have a source of income.
No one likes to be treated disrespectfully, so consider the human side of this story and take extra effort and planning to make it as painless as possible for the people who have been working for your company for many years.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
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.
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