As published by AGWeb Labor Matters, September 19, 2011.
One of the most frequent problems that plague dairy producers is
the abuse of workers' compensation. Many states, especially
California, provide compensation systems for workplace injuries
that are very generous to employees and can be difficult for
employers.
In California, the employer's insurance premium is regulated
by law. While base premiums are standardized, the primary factor
that can drive up premium costs is the "experience
modification rating" (commonly referred to as the
"ex-mod"). Like car insurance, the number of claims and
the cost of those claims lead to increased premium costs, which
increases overhead costs and eats into profit margins.
Dairy producers are often frustrated at the functioning of
workers' compensation systems. In states like California, these
systems are heavily biased in the employee's favor, and
enterprising employees and knowledgeable attorneys can drag out the
process, with every dollar spent ultimately costing the producer in
the form of increased premiums. Fortunately, there are things that
can be done to manage the cost of workers' compensation claims
and limit the abuse.
Know Your Adjuster: When an employee files a
workers' compensation claim, the dairy must make contact with
the adjuster as quickly as possible in order to understand how the
carrier intends to handle the claim. Don't be afraid to ask
questions, and be sure to share information that you know about the
employee. If the employee is working "on the side" while
supposedly injured, the carrier can have an investigator film him
or her in action to undermine the claim. If an employer wants the
carrier to handle the claim aggressively, he needs to be a bug in
the adjuster's ear. Employers cannot expect an insurance
adjuster handling hundreds of claims to be aggressive with the
claim unless they are invested in the process.
Use Light-Duty Work: Light-duty work is an
important part of controlling claim costs. In California, employers
are not required to offer light-duty work, and dairy producers are
often reluctant to do so because they don't want the injured
employee back until the worker is healed. This can be a
mistake.
Properly designed light-duty work can control claim costs (and the
impact on premium) and create an incentive to return to work. Light
duty reduces claim costs because the employee remains working and
does not collect temporary disability benefits paid by the carrier.
Light duty can encourage a return to work because a properly
designed light-duty position will make the employee want to go back
to the regular job.
The best light-duty jobs are physically easy, to accommodate work
restrictions, but boring and isolated from other workers. While
employers must avoid assignments that are so unpleasant as to be
punitive, a boring task that the worker does without anyone to talk
to may encourage a quick recovery. Every dairy has little chores
that fit this requirement, like cleaning manure off of rails,
painting fences, inventorying parts and equipment and other similar
tasks. In contrast, if the employee can sit at home doing nothing
and get a check from the insurance carrier, there is very little
incentive to return to regular work.
Light-duty assignments should be provided in writing with an
explanation of the work and a clear statement that the assignment
is temporary. If necessary, the description can be sent to the
employee's doctor for confirmation that the employee can handle
the work.
Document and Enforce Disciplinary Standards: It
is not uncommon for employees who are performing poorly to suddenly
suffer disabling injuries when they feel that they are closing in
on termination. It is important to have an employee handbook that
sets forth rules and performance expectations, and to document
employee performance problems consistently. While employers cannot
discriminate against workers who suffer industrial injuries, an
industrial injury does not insulate the employee from discipline
for performance problems.
A history of documenting performance problems with all employees
will enable the dairy to show that the injured worker was treated
no differently than uninjured workers with similar performance
problems by showing that the rules are enforced consistently. Also,
documenting performance problems will clearly show that the
employee's problems started long before the injury. Finally,
clearly stated safety rules that are enforced through discipline
can often help support the employer in controlling the benefits
paid when an employee causes his or her own injury through a safety
violation.
While some employees will always search for a way to manipulate
the system in their favor, employers can give themselves an
advantage in preventing workers' compensation abuse by having
written policies, a strong practice of documenting performance
problems and disciplinary issues, and by being actively engaged in
the handling of claims. If a dairy producer simply lets the process
happen, abuse and increased premium costs are a virtual
inevitability. As with all aspects of the business, active
management is the key to better results.
The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Anthony Raimondo at McCormick Barstow LLP in Fresno, at (559)433-1300.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.