Part 2: Layoff Planning to Control Workers’ Comp Claims

In the first part of our series, we emphasized the importance of thoughtful layoff planning to mitigate the risk of increased workers’ compensation claims following a workforce reduction or facility closure. Continuing this essential discussion, we’ll explore additional strategies your company can implement to further safeguard your financial stability and support your employees through transitions.

1. Update Personnel Records

Accurate and up-to-date employee records are crucial during layoffs. Be meticulous in updating personnel files, health insurance documentation, and records of sick leave. Accurate documentation provides critical evidence in validating claims and defending against those that may be unrelated to work.

2. Conduct Exit Medical Examinations

Implement exit medical exams, particularly for employees exposed to workplace hazards like high noise levels, chemicals, or other irritants. Employees should document and verify any existing medical conditions. Such clear documentation helps protect the company against later claims that allege workplace aggravation of pre-existing conditions.

3. Bring Employees Back Before Announcements

Before announcing layoffs, actively manage the return of employees currently receiving indemnity benefits back into the workplace. This reduces the potential for prolonged indemnity claims continuing after layoffs.

4. Engage Offsite Transitional Duty Vendors

Partner with vendors specializing in offsite transitional duty assignments. These vendors help manage the recovery and transitional employment of injured workers, reducing the internal burden and ensuring continuous engagement in meaningful work.

5. Prepare Universal Transitional Duty Options

Be ready to place all employees, regardless of their injury status, into transitional duty roles. Consider innovative solutions, such as assignments at non-profit organizations or home-based roles. Offering universal transitional duty opportunities encourages faster recovery, boosts morale, and helps control claim costs.

6. Promptly Document and Investigate Claims

All workers’ compensation claims filed after layoff announcements should be swiftly documented and thoroughly investigated. With the imminent closure of facilities, it is critical to gather evidence and statements immediately, as access to key witnesses and physical evidence will soon be lost.

7. Monitor and Address Claims Effectively

Consistent monitoring of all reported claims is essential. Ensure adjusters act promptly, communicate clearly, and maintain detailed action plans for claim resolution. Effective claim handling minimizes costs and facilitates faster resolutions.

Conclusion:

Effective layoff planning is integral to safeguarding your company’s financial stability and supporting genuine employee needs. By proactively updating documentation, facilitating medical assessments, and ensuring thorough claims investigations, you not only minimize unnecessary costs but also strengthen trust and morale during challenging transitions. Strategic layoff planning helps your organization move forward resiliently, equipped to handle both anticipated and unforeseen workers’ compensation challenges.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.com/

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.