Five Key Steps to Take During Layoff to Avoid Driving Up Workers’ Comp Costs
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 as possible back to work prior to the layoff.
3. Limit severance payments to those employees who are actively at work. This may discourage filing workers’ comp claims without merit; and make the lure of getting a quick workers’ comp settlement less attractive because it’s a more tenuous source of income than unemployment benefits.
4. Eliminate disincentives to collect unemployment and workers’ compensation benefits. Previously, we talked about eliminating collateral source benefits, and this one is relevant now. In some states, an employee is eligible for unemployment benefits if they are “able to” work. If they are disabled, their unemployment benefits could be jeopardized. Employers should challenge unemployment claims of employees on workers’ compensation (workersxzcompxzkit)Â if allowed in your state.
5. Use outplacement professionals and offer services to make it possible to find part-time or alternate employment. This makes the transition smoother when employees know they will have a source of income.
No one likes to be treated disrespectfully. Consider the human side of the layoff story and take extra effort and planning to make it as painless as possible for the people who have worked for your company for many years.
Try the WC Cost Calculator (www.ReduceYourWorkersComp.com/calculator.php)Â to show the REAL COST of work comp.
Look at WC 101 (www.ReduceYourWorkersComp.com/workers_comp.php) for the basics about workers comp.
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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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(c)2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
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Originally published here.
Robert Elliott is a senior vice president with Amaxx Risks Solutions, Inc. Over the past 20 years, he has worked successfully with many industries reducing Workers? Compensation costs, such as airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and many other industries and organizations. Contact him at Robert_Elliott@ReduceYourWorkersComp.com