Three compelling reasons why you should prepare a workers’ comp premium audit package

A premium audit happens every year, so some employers view it as routine and assume it will be correct, others take it lightly and may miss filing deadlines, but it is the savvy employer who prepares for the audit, in the same way they might prepare for an IRS audit. Here’s why:

  1. It likely will save you moneyThere are three important things to remember about Premium Auditors. First, their objective is to maximize your premium, after all they work for the insurance company. Second, overworked, they have tight time constraints. Third, the process is complex and prone to errors and omissions.While the list of possible errors and mistakes is endless, some common problems are incorrect job classifications, erroneous experience mod, improper charges for subcontractors, failure to cap payroll of executives, “excluded remuneration” included, credits or modifiers not applied, mathematical errors, multi-state exposures, and failure to take advantage of separation of payroll opportunities. If the employer does not provide complete data in a well-organized presentation, the auditor will default to what produces the greatest premium.

    When employers create their own audit package, they control the data the auditor observes, they simplify the auditor’s job, reduce probing questions, and build a reasonable defense for areas of disagreement. Since a Workers’ Compensation premium is estimated initially, the actual cost is determined through the premium audit, and proper preparation avoids higher and unexpected costs.

  2. Failure to complete audit in timely manner can double the cost of the premiumIn past years, the audit process was somewhat flexible. That changed in January 2017. The National Council on Compensation Insurance (NCCI) established an Audit Noncompliance Charge (NCCI item B-1429), which instructs workers’ compensation carriers to apply a charge up to two times the annual estimated premium, in addition to the annual estimated premium, for policyholders who do not complete their premium audits in a timely manner. Following the announcement by the NCCI, the mandate was adopted by independent rating organizations in Minnesota and Wisconsin (Minnesota Workers’ Compensation Insurers Association, and Wisconsin Compensation Rating Bureau, respectively).In addition, failure to cooperate with the audit may result in a cancellation of workers’ compensation coverage. Audit noncompliance will disqualify an employer from obtaining coverage from any insurance company until the outstanding audit is completed.

    The new form is attached to all new and renewal policies with effective dates on or after January 1, 2017. According to the new procedure, the carrier must make two attempts to obtain audit information and properly document those attempts. Policyholders who do not supply their payroll data after this point will be subject to the penalty charges.

  3. You can control the processThere are three ways an audit can take place: mail, phone, or a physical audit. Some employers receiving the mail audit pass it along to a finance officer or bookkeeper and that’s it. Yet, these audit forms are confusing and don’t ask the right questions. And if the person completing the form is not knowledgeable about workers’ comp, you will end up paying more than necessary. Similarly, a phone audit doesn’t always ask the right questions and errors can result from communication issues and misinterpretations.A physical audit is conducted on your premises. In addition to preparing the audit package in advance, employers should take steps to ensure the visit goes smoothly. Assign a knowledgeable, friendly person to work with the auditor and provide a clean, well-lit work space. Have the audit package ready and do not provide other information unless the auditor asks for it. Be sure a knowledgeable person escorts the auditor, if there’s a tour of the facility.

We are available to help. As Certified WorkComp Advisors, we are trained to prepare employers for audits, spot errors and get them corrected.

If you would want to build an error-free, overcharge-free audit download a FREE copy of our Work Comp AuditCheck Program, by visiting http://www.workcompauditcheck.com/.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Things you should know

NCCI published a large set of changes to the Basic Manual

While many of the changes are minor, such as replacing “insured” with “employer,” here are some you should know:

  1. Stores and day care services operated by the employer for employee use are now a general inclusion. Previously, they were a general exclusion. They must be separately rated if they also operate for the general public.
  2. The “automatic” exclusion for expense reimbursements when traveling overnight increased from $30 to $75 per day. Texas has their own exception to this and you can exclude up to the maximum IRS allowable per-diem, which is currently $189.
  3. 7228 and 7229 (Short and Long-Haul Trucking) are being retired in favor of 7219. This change has already happened in many states, with many more following along over the next year. Check with your agent for more information.

EEOC provides timeline for revising wellness regulations

In a court ruling in August, the American Association of Retired Persons, Inc. (AARP) challenged the EEOC regulations on the basis of the “voluntariness” of the 30 percent incentive limitation and the court held that the EEOC did not provide a reasonable explanation as to why the incentive limit of 30 percent of the cost of coverage rendered an employee health program voluntary rather than involuntary.

According to a status report issued in September, the EEOC intends to issue a notice of proposed rulemaking by August 2018 and issue a final rule by October 2019. Notably, the EEOC indicates in a footnote that, in order to give employers time to come into compliance with a new rule, any substantively amended rule on wellness programs would likely not be applicable until the beginning of 2021.

Adult obesity rate climbs to 40 percent

Obesity continues to present a problem to both the adult and younger population of the United States, according to new data from the Centers for Disease Control and Prevention (CDC).About 40 percent of U.S. adults are considered obese, and the rate grew 20 percent for 12 to 19 year olds, the CDC’s National Health and Nutrition Examination Survey (NHANES) indicated.

NIOSH center to focus on ‘safe integration of robots’ in the workplace

Citing a “knowledge gap related to robotics and worker safety and health,” NIOSH has launched the Center for Occupational Robotics Research in an effort to evaluate the possible advantages and hazards of robot workers, as well as foster safe robot-human interactions.
State News

California

  • The Department of Insurance announced that the pure premium rate will reduce 17.1% to $1.94 per $100 of payroll for workers’ compensation insurance, effective Jan. 1, 2018
  • California Gov. Jerry Brown vetoed a bill that would require employers to provide employees their injury and illness prevention plan upon request
  • Hepatitis A outbreaks have been reported in San Diego, Santa Cruz and Los Angeles counties and Cal/OSHA has issued a reminder to employers about preventive measures

Indiana

  • Indiana Department of Insurance approved a 12.8% rate decrease
  • A WCRI report notes that medical payments per claim decreased 10% from 2014 to 2015 – the first such decrease in more than a decade

Michigan

  • The pure premium advisory rate for work comp insurance will decrease by 9.3% for 2018

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

OSHA news

Deadline for electronic injury, illness reports was Dec. 15 now Dec. 31.

OSHA delayed reporting requirement until Dec. 31 for employers to electronically submit injury and illness data. The agency’s final rule was published in the Nov. 24 Federal Register. According to OSHA, the delay allows “affected employers additional time to become familiar with a new electronic reporting system.”

The Improve Tracking of Workplace Injuries and Illnesses final rule, as it is formally known, mandates that employers with 250 or more workers, as well as those with 20 to 249 employees in high-risk industries such as agriculture, forestry, construction and manufacturing, electronically submit OSHA’s Form 300A. OSHA then would make the information public on its website.

OSHA is currently reviewing the other provisions of its final rule and intends to publish a notice of proposed rule-making to reconsider, revise or remove portions of that rule in 2018.

For the next reporting deadline of July 1, 2018, if you want to be able to more easily and efficiently manage reporting work related injuries and OSHA recordables, please feel free to look at our Free OSHA Software at http://www.stopbeingfrustrated.com/osha-logs.html

 

Few citations given under the anti-retaliation provisions of the electronic record-keeping rule

The electronic record-keeping rule’s anti-retaliation provisions went into effect Dec. 1, 2016 and required employers to inform employees of their right to report work-related injuries and illnesses free from retaliation, specifically barred employers from retaliating against employees, and mandated that employer procedures to report work-related injuries and illnesses must be reasonable and not discourage reporting. Employers were encouraged to evaluate employee incentive programs related to injuries to be sure they did not violate the rule.

In addition, OSHA’s interpretations of the anti-retaliatory provisions warned that post-incident drug and alcohol testing could deter employees from reporting injuries and illnesses. Therefore, post-injury drug and alcohol testing policies should be limited to situations in which there is a reasonable possibility that an employee’s drug or alcohol use was a contributing factor to a reported incident.

These provisions were controversial and the basis of some litigation against the rule. However, according to a recent article in Business Insurance, OSHA has issued only a handful of citations under anti-retaliation provisions since they went into effect last year, with several open investigations.

The article noted that Ann Rosenthal, associate solicitor for the division of occupational safety and health with the Labor Department’s Office of the Solicitor in Washington, told attendees of the American Bar Association’s annual Labor and Employment Law Conference some citations were issued against unnamed employers related to incentive programs in which employees were penalized for injury and illness reporting. This included one employer whose program gave bonuses to employees who did not report lost-time days while those who reported them did not get bonuses. But several employers quickly settled these complaints by agreeing to change their policies and giving employees the incentives. “The rule can’t really outlaw the incentive programs,” Ms. Rosenthal said. “You can have the policy – you just can’t apply it to penalize the workers who report the injuries.”

She also noted she was not aware of a single drug testing case under the federal OSHA plan since the anti-retaliation provisions went into effect. Even though this information is encouraging for employers, it does not mean the rule can be ignored. Implemented properly and in compliance with the rule, incentive programs and post-accident drug testing are possible.
Fatality and serious injury reporting rule lessons from past three years

OSHA’s Fatality & Significant Injury Reporting Rule, which went into effect January 1, 2015, required employers to report all work-related fatalities within 8 hours and all work-related inpatient hospitalizations, amputations and losses of an eye within 24 hours. A recent webinar by Conn Maciel Carey, a boutique law firm focused on Labor & Employment, Workplace Safety, and Litigation, noted that each year the rule has been in effect, the number of reports has increased. This, in spite of the fact that overall workplace injuries have declined.

Through October 2017, there were 7,248 hospitalizations reported and 2,403 amputations reported. On an annualized current year basis, this is projected to be 11,581 total reports, compared to 10,395 in 2015. Once a report is made, one of three things happen: a mandatory inspection occurs, the Area Director has discretion to decide a course of action, or a rapid response investigation letter is sent. In 2017, there is a 47% inspection rate for reported amputations and a 26% inspection rate for fatalities.

In the webinar, Conn Maciel Carey noted that there are several instances where reports are submitted when they are not required under the rule. For example, the rule requires reporting “formal admission to the inpatient service of a hospital or clinic for care or treatment.” It does not include admission for observation or testing (even after receiving medical treatment in ER), outpatient care or care in a hospital prior to formal admission, and no longer requires overnight stay. An example they obtained from OSHA:

“Employee breaks leg, goes to ER where he begins to bleed out. ER replenishes blood before setting leg, but sends patient from ER to a ward where he is admitted for monitoring because of blood loss – NOT Reportable”

Timing is also a source of non-mandatory reporting. Injuries/fatalities are reportable only if:

  • Fatality results within 30 days of the day of the incident
  • Hospitalization occurs within 24 hours of the incident
  • Amputation / eye loss occurs within 24 hours of incident

Hospitals will often delay admissions because reimbursements for emergency services are higher or they may do major medical treatment in the emergency room followed by in-patient admission for observation only. For this reason, it is important to determine if the incident is truly reportable before making the report.

In addition to the over reporting of hospitalizations, other common mistakes include failing to report minor fingertip amputations, reporting non-employee injuries, making verbal or written admissions in the report, and only identifying “employee misconduct” as the reason. It’s important to note, that California has stricter rules and the federal rules should not be followed there.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Legal Corner

ADA
Another court decision scales back right to take more leave after exhausting FMLA

Last month, we reported on the 7th US Circuit Appeals decision in the Severson case. That same appellate court recently ruled in Golden v. IHA that extended leave beyond what the FMLA requires is not a reasonable accommodation under the ADA.

In this case, an employee with breast cancer, required surgery and an extended leave. When her 12 weeks of FMLA leave was about to expire, she sought an unspecified period of leave, but her employer declined to grant more than four additional weeks of leave. When she could not return from work after 16 weeks off, she was terminated.

It’s important to note that in both cases the employee’s return to work date was unclear. Employers should conduct an individualized assessment of each leave request to determine whether a leave of absence or intermittent leave is reasonable and effective in helping the employee return to work. There is a split in authority among the courts that the U.S. Supreme Court ultimately may have to resolve.


FMLA

Managers’ inaction can be costly

In Boadi v. Center for Human Development an employee was hospitalized unexpectedly for a mental health condition and her son notified her employer four times over the course of one week, including her supervisor, the supervisor’s boss, and the boss’s boss. Although he explained that his mother was unintelligible, a supervisor told him it was unacceptable for him to call instead of his mother. The same supervisor informed the vice president of Human Resources that the employee was hospitalized and later reported her a “no call/no show” when she failed to personally call about her continued absences. A termination letter was written and when the employee returned with her doctor’s medical certification, she was told her employment had been terminated because she abandoned her job.

During the case, the court specifically commented that the managers were “not trained on the FMLA.” Noting the lack of training, the court found that the employer willfully violated the FMLA, and awarded liquidated damages, which doubled the back-pay award to $300,000.

 

Workers’ Compensation
Comp’s ‘going and coming’ rule determines employer’s vicarious liability – California

In Morales-Simental v. Genentech, the court explained that an employer generally will be held vicariously liable for the tortious conduct of its employees within the scope of their employment. However, case law recognizes that an employee commuting to or from work is typically outside the scope of employment, and the employer is not liable for the employee’s torts while traveling. There are some exceptions, but the court found they did not apply and, therefore, the employer could not be held vicariously liable for the alleged negligence of an employee in causing a fatal car accident.


Convicted of fraud, worker still entitled to benefits – California

In Pearson Ford v. WCAB (Hernandez), a worker accidentally slammed a trunk lid on his hand, but did not break any bones. He received workers’ comp for pain and later began wearing a sling and telling his treatment providers that he was unable to use his left arm and hand. A private investigator shot video of him removing his sling after attending doctor’s appointments, using his left hand to drive, carrying groceries, and lifting a washing machine. He pleaded guilty to making materially false statements for the purpose of obtaining workers’ compensation benefits.

Later, a workers’ compensation judge issued, and the Appeals Board approved, an award of permanent partial disability benefits. The court reasoned there was a compensable injury that was not directly connected to the worker’s fraudulent misrepresentation.


Failure to train in lockout/tagout leads to $310,000 settlement – California

Growers Street Cooling has agreed to pay $310,000 in costs and civil penalties, maintain and implement written hazardous energy control procedures, and conduct proper training as a result of legal action brought by the Monterey County District Attorney following a 2013 worker fatality at the Salinas-based produce-cooling company. The worker had been working at the company as a machine operator for only 16 days prior to the accident and was never trained on lockout/tagout procedures. Nor did the company maintain a written lockout/tagout policy or training program; thus, they were charged with systematically violating worker safety laws.


Comp coverage uncertain for off-duty police officers at Las Vegas concert shooting – California

Due to some muddy language in the state’s Labor Code, it is uncertain if municipalities are required or even allowed to pay to treat off-duty police who chose independently to intervene in an out-of-state emergency. Orange County rejected workers’ compensation claims from four sheriff’s deputies injured in the shooting and more claims are expected. More than 200 Southern California police officers attended the Las Vegas concert. Had the incident occurred in California, they would be covered, but the Labor Code makes no mention of out-of-state tragedies.


Employer can terminate benefits when employee returns to “baseline” – Georgia

In EMC v. McDuffie, an employee had a significant disability to his knee at the time he took the job, which he did not disclose, and he suffered a subsequent knee injury when he stepped in a hole while working. The Supreme Court ruled that when an employee has a pre-existing condition that limits work capacity, as soon as the employee recovers from “the aggravation”, the employer’s responsibility for workers’ compensation ceases. The court did not define baseline.

This is an important decision because it’s well established that employers are responsible for an aggravation of a pre-existing condition only until the aggravation ends, but there wasn’t a case that said when an employee still has restrictions, which they had before, the employer is not responsible.


Meretricious relationship results in disqualification of death benefits – Georgia

In Sanchez v. Carter, a state appellate court cited a 1990 decision of the Supreme Court of Georgia, Williams v. Corbett, and found within the context of a workers’ compensation claim, a meretricious relationship does not entitle a dependent to death benefits, even if actual dependency exists. In this case, the couple had lived together for 13 years, but never legally married.


Court reduces award in retaliatory discharge claim – Illinois

Two employees suffered work-related injuries and were fired for failing to report to work after an independent medical examiner (IME) cleared them to return to their jobs. They filed suit, asserting they had been discharged in retaliation for having pursued workers’ compensation claims. The Illinois Appellate Court ruled that an employer may not rely solely on an IME in terminating the employee for failing to return to work or for failing to call in his absences when the opinion conflicts with the employee’s doctor. But, the worker must still prove his discharge was causally related to his exercising of workers’ compensation rights.

The men then filed an amended complaint and pursued separate jury trials. While a jury found in favor of the employer in one case, in Francek v. Dominick’s Finer Foods, the jury awarded $156,315.50 in compensatory damages and $2.5 million in punitive damages, plus court costs to the employee. However, the appellate court concluded that the award of punitive damages was unconstitutionally excessive (16:1) under federal due process standard and concluded that a 9:1 ratio would be appropriate.


Workers’ comp precludes security’s guard personal injury suit – Missouri

In Kayden v. Ford Motor Co., U.S. Security Associates provided security services under a contract for a Ford assembly plant. A security guard slipped and fell in the parking lot, where it was determined a pothole was not repaired properly. After she filed a personal injury suit against Ford, Ford moved for summary judgment, asserting that it qualified as the employer for purposes of the Missouri Workers’ Compensation Act and the court agreed.


Exception to schedule loss of use (SLU) allows apportionment – New York

While generally a judge or board may not apportion a PPD award based upon a preexisting condition that did not prevent the employee from effectively performing his or her job duties at the time of a subsequent work-related injury, apportionment may be applicable if the medical evidence establishes that the prior injury – had it been compensable – would have resulted in an SLU finding. In the Matter of the Claim of Sanchez v. STS Steel, there was medical expert opinion that a non-work related surgical procedure involving the excision of the meniscus right knee would have resulted in a 7.5% SLU; therefore, apportionment was appropriate.


Estate can pursue wrongful death claim – New York

In Assevero v. Hamilton & Church Properties, an employee fell from a ladder and filed a Labor Law action asserting an unsecured extension ladder shifted as he was descending and caused the fall. A trial judge granted summary judgement to the employer, and the employee appealed. While the appeal was pending, the employee died from an overdose of pain medication prescribed for his injuries. The Appellate Division’s 2nd Department overturned the grant of summary judgment for the employer and the estate’s administrator filed a motion to amend the complaint to include a cause of action for wrongful death, which was allowed.


Widow of worker killed by street sweeper awarded $41.5m – New York

The widow of a New York City Department of Sanitation worker killed by an out-of-control street sweeper won a $41.5 million negligence lawsuit. The New York Post reports that a Queens jury recently awarded the sum to the widow for the death of her 43-year-old husband who was struck and killed by a colleague’s vehicle inside a garage in 2014. The city plans to pursue legal options to reduce the award.


Death from accidental overdose compensable – North Carolina

In Brady v. Best Buy Co., an injured worker was taking narcotics to treat his compensable low back injury, additional medication for treatment of depression, and other prescription medications. The Court of Appeals upheld a reward of benefits to the beneficiaries noting the unchallenged finding that pain medications established the death as compensable, regardless of whether his medications for depression had a contributory effect.


Going and coming rule does not bar death benefits in case of donut shop manager – Pennsylvania

In Rana v. Workers’ Comp. Appeal Bd, an employee worked as a manager at one of the employer’s three donut shops, but occasionally was called upon to handle issues at the other two shops. He died in a car crash traveling from his residence to one of the other shops to potentially fill in for a kitchen employee who had fallen ill during a work shift. The court found that the manager was a traveling employee and, therefore, his dependent’s death benefits claim was not barred by the going and coming rule. It also noted even if he was considered a stationary employee, the claim would still be compensable, since he was engaged in a special assignment on behalf of the employer.


Commonwealth Court overturns denial of benefits based on ‘going and coming’ rule – Pennsylvania

In Fields v. WCAB (Carl G’s Total Cleanouts), an employee had been working at the same job site doing demolition work for two or three weeks. He and a colleague took a company truck to drop off debris at a scrapyard (they received a percentage of the metal hauled as part of wages) and then the colleague planned to drop the employee at home and return the truck to the employer. En route, the employee sustained injuries in an auto accident. A workers’ compensation judge determined, and the Workers’ Compensation Appeal Board affirmed, that he had a fixed place of work, and the accident occurred during his commute home from the workplace, and was not compensable under the going and coming rule.

Upon appeal, the Commonwealth Court noted exceptions to the going and coming rule include when a worker’s employment contract includes transportation to and from work; when the worker has no fixed place of work; when the worker is on a special mission for his employer; or when the worker’s travel is furthering the business of the employer. While the lower courts focused on the fixed place of employment, the facts supported a legal conclusion that he was furthering his employer’s business when he was injured – to dispose of the material the crew had cleaned out of the job site.


Witnessing workplace shooting caused PTSD – Tennessee

In Evans v. Alliance Healthcare Services, a bus driver was transporting a counselor to a patient’s home in response to a call from the patient’s brother. As they entered the house, the patient shot the counselor. While the counselor survived the attack, the bus driver received mental health care through workers’ compensation but she did not return to work.

The company acknowledged that the shooting initially may have caused the PTSD, but asserted the continuing mental health problems were caused by other events. The trial court disagreed and found she was permanently and totally disabled and that the shooting incident was the cause of her disability. This was upheld by the Special Workers’ Compensation Appeals Panel of the Supreme Court.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

OSHA watch

Interim enforcement guidance on silica standard for construction

The interim enforcement guidance for the Respirable Crystalline Silica in Construction Standard (1926.1153), which is now enforced in full, was issued Oct. 19 in a memorandum to regional administrators. The guidance is intended to help gauge whether employers meet various requirements, including those for inspections and avoiding citations, but does not provide guidance on all of the standard’s provisions. A final compliance directive is in the review process.

Information on silica hazards and related standards are now in one location on the website.


New fact sheets: Zika virus and evaluation of Shipyard Competent Person programs

The fact sheet on the Zika virus details how laboratory exposures occur, often through bodily fluids, and how to prevent exposures.

The Shipyard Competent Person programs fact sheet offers guidance on determining the necessary qualifications of experts who must be employed to determine whether a confined space is safe for workers and prescribe protective measures.


Pennsylvania construction firms join Strategic Partnership program

Shoemaker-Skanska Construction and the Philadelphia Regional Building Trades Council entered into a strategic partnership to protect approximately 300 workers during renovation and construction of a shopping mall complex in Philadelphia. P.J. Dick Incorporated entered into a strategic partnership to protect approximately 200 workers during the construction of an insurance office building in Erie.


Enforcement notes

California

  • HBuilt Inc. in Oakland received two serious citations and $80,000 in penalties for failing to train workers on potential hazards and safe operation of machines, ensure proper machine guarding, and provide workers with gloves designed to prevent cuts.

Georgia

  • Structural Subcontractors Service LLC, a Birmingham-based structural framing company working on a job site in Georgia, faces penalties of $102,669 for exposing workers to fall hazards. Inspectors found workers wearing fall protection harnesses, but were not tied off to prevent a fall. The inspection was initiated as part of a regional emphasis program.

Massachusetts

  • Citations and proposed penalties against Dudley-based Shield Packaging Co. Inc. and two staffing agencies following a May 2016 incident in which an employee was injected with a flammable propellant gas have been settled. The packaging company will pay $150,000, about 50% of the original levy, and the two staffing agencies, Leominster-based ASI Staffing Group Corp. and Worcester-based Southern Mass Staffing, will pay $12,471 and $12,222 respectively. The company also agreed to document that all hazards are corrected, retain a professional engineer to approve the design and installation of a safety interlock on the machine that injured the worker, retain a qualified safety consultant to perform a comprehensive inspection of the plant, and develop a workplace safety and health program, while the staffing agencies also agreed to implement specific comprehensive safety and health measures.

Michigan

  • Ten citations and $102,600 in penalties were issued to SET Enterprises Inc. in New Boston for exposing workers to amputation hazards. Inspectors determined that the company failed to train workers on potential hazards and safe operation of machines, ensure proper machine guarding, and provide workers with gloves designed to prevent cuts.

New York

  • Acme Parts Inc. has agreed to pay $40,000 in penalties after high lead levels were found in the manufacturing facility as well as hire a qualified lead hazards and abatement consultant to evaluate the facility and to recommend improved practices.
  • An administrative law judge affirmed citations issued against Webster-based LM Sanderson Construction Inc. whose employees were photographed working on a site without fall protection and assessed total penalties of $5,600. The employer failed to meet its burden in contending the violation was the result of unpreventable employee misconduct or that literal compliance with the standard’s requirement was infeasible under the circumstances.

Pennsylvania

  • Pittsburgh contractor, Ski Masonry LLC, is facing $201,354 in proposed penalties for exposing workers to fall and electrical hazards after an employee was fatally electrocuted.
  • In response to a complaint, the owner of a New Jersey construction company has been cited for exposing workers to alleged hazards at a Philadelphia job site, including allowing employees to work on a scaffold that was too close to power lines, failure to train on scaffold hazards, not providing hard hats and failing to develop and implement an accident-prevention program. The owner, Vyacheslav Leshko, faces $191,215 in proposed penalties.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

HR Tip: Failure to pay for pre-shift work can be costly

A recent settlement in a class-action lawsuit, Tompkins v. Farmers Insurance Exchange, is a reminder to all employers about the obligation to pay for pre-shift work under the Fair Labor Standards Act (FLSA) and state laws. A federal court approved a $775,000 settlement for Farmers Insurance’s alleged failure to compensate auto claims representatives, appraisers, and adjusters in several states for pre-shift work.

The alleged unpaid activities included starting up computers and accessing Farmers’ software applications, obtaining daily assignments, determining the locations the workers would need to visit, mapping routes, contacting customers and auto repair facilities, downloading required forms and gathering paperwork, as well as traveling to the workers’ first appointments of the day. The settlement, which was approved by the U.S. District Court for the Eastern District of Pennsylvania, granted both the FLSA collective action and state law class claims and covers nearly 400 current and former employees.

Employers are reminded that activities before the official time a shift begins are compensable if they include tasks the worker is employed to perform or are an “integral and indispensable part of” the job and include mandatory pre-shift meetings. Employers should review policies and practices regarding compensation for pre- and post-shift work, as well as educate managers about the wage laws that require payment for all hours worked.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Important takeaways from recent studies and reports

Strategies to reduce costs and risks of musculoskeletal disorders

A report by the Northeast Business Group on Health (NEBGH) urges employers to look at their own experiences with claims, disability, workers’ compensation and health risk assessment data to best prioritize program selection and implementation to better manage MSDs. It addresses several strategies to mitigate cost and health issues and suggests using onsite ergonomics training, online courses on the subject and workplace redesigns. It also suggests new approaches to treatment, such as online pain education, direct access to physical therapy by bypassing physician referrals, and directing employees away from “unnecessary diagnostic imaging and expensive visits to specialists.” Finally, the report examined ways to ensure that if surgery is needed, that the care is performed in an efficient and cost-effective way.

Obesity and worker productivity by occupational class

The Journal of Occupational and Environmental Medicine has published a new study, “Impact of Obesity on Work Productivity in Different US Occupations: Analysis of the National Health and Wellness Survey 2014-2015”, which examines the impacts of obesity by different occupational classes on work productivity and indirect costs of missed work time.

BMI results were as follows:

  • Protective Services: 38% overweight, 39% obese
  • Transportation: 38% overweight, 36% obese
  • Manufacturing: 35% overweight, 30% obese
  • Education: 31% overweight, 30% obese
  • Healthcare: 31% overweight, 30% obese
  • Construction: 38% overweight, 29% obese
  • Hospitality: 32% overweight, 27% obese
  • Arts: 34% overweight, 26% obese
  • Finance: 36% overweight, 25% obese
  • Computer: 36% overweight, 25% obese
  • Legal: 38% overweight, 24% obese
  • Science: 37% overweight, 21% obese

The researchers concluded that there was a positive association between work productivity impairment and increases in BMI class that varied across occupations. Obesity had the greatest impact on work productivity in construction, followed by arts and hospitality, and health care occupations. Work impairment was least impacted by increases in BMI in Finance, Protective Services, Computers, Science, and Legal. It was estimated that the indirect costs associated with the highest BMI group in construction was $12,000 compared to $7,000 for those with normal BMI.

Would your floors pass the slip and fall test? 50% fail

Half of the floors tested for a slip-and-fall study failed to meet safety criteria, suggesting that many fall-prevention programs may overlook the effects of flooring selection and ongoing maintenance on slip resistance, according to a study by CNA Financial Corp.

Given the high frequency of slips and falls, these findings underscore the need for attention to floor safety and regular surface resistance testing to avoid fall accidents and related injuries.

Fatigue costs employers big bucks

Key findings from a recent study on fatigue by the National Safety Council (NSC) include:

  • More than 43 percent of all workers are sleep-deprived, and those most at risk work the night shift, long shifts or irregular shifts. As employees become tired, their safety performance decreases and their risk of accidental injury increases.
  • Missing out on sleep makes it three times as likely to be involved in an accident while driving. Also, missing as little as two hours of sleep is the equivalent of having three beers.
  • Employers can see lost productivity costs of between $1,200 to $3,100 per employee per year.
  • The construction industry has the highest number of on-the-job deaths annually. In a 1,000-employee national construction company, more than 250 are likely to have a sleep disorder, which increases the risk of being killed or hurt on the job.
  • A single employee with obstructive sleep apnea can cost an employer more than $3,000 in excess healthcare costs each year.
  • An employee with untreated insomnia is present but not productive for more than 10 full days of work annually, and accounts for at least $2,000 in excess healthcare costs each year.

Experts say employers can help combat fatigue by offering breaks, scheduling work when employees are most alert, and promoting the importance of sleep.

Workers welcome employers’ help in dealing with stress

Workers want their employers to offer assistance in coping with work-related stress, according to a new report from the American Heart Association’s CEO Roundtable.

The report also concludes that employees think more highly of employers offering resiliency programs. Valued programs include methods for dealing with difficult people, improving physical health, remaining calm under pressure, coping with work-related stress and accurately identifying the causes of work-related problems. It also includes actionable strategies for effective workplace resilience programs.

Supportive communication and work accommodation help older workers return to work

While early supportive contact with injured workers and offers of work accommodation are important to all injured workers, a recent webinar hosted by the Disability Management Employer Coalition (DMEC) and presented by Dr. Glenn Pransky, founder of the highly acclaimed, but now-defunct Center for Disability Research within the Liberty Mutual Research Institute for Safety, noted that these two strategies are particularly effective with older workers.

His research involved workers’ comp cases in New Hampshire related to low back and upper extremity problems. Negative responses, including lack of support, anger, disbelief, blaming the worker, or discouraging the worker from filing a claim resulted in significantly longer disability, and the effect was especially strong among older workers.

Click to hear the DMEC webinar

Loss control rep visits cut lost-time injuries in construction

Visits by insurance loss prevention representatives to construction job sites can lead to fewer workplace injuries, according to a study by a Center for Construction Research and Training supported research team at the University of Minnesota. One contact was associated with a 27% reduction of risk of lost-time injury, two contacts with a 41% reduction of risk, and three or more contacts with a 28% reduction of risk, according to the study. The study also found that these visits are often low cost and that the reduction in lost-time injuries reduced workers’ comp costs.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Don’t let your holiday party become a legal liability

No one wants to be a spoil sport. Holiday parties are supposed to be festive and fun, but they can also be a breeding ground for liability under tort, workers’ compensation, sexual harassment, discrimination, and other laws. Planning ahead to minimize exposure can help ensure a lawsuit-free event.

Workers’ Compensation

A North Carolina case last year, Lennon v. N.C. Judicial Dept., illustrates the issues that are common when an employee is injured at an office event. Whether such injuries are covered under workers’ compensation laws will depend on many factors (which can vary by state), but the overriding question is whether the employee was acting in the course and scope of employment at the time of the incident.

In this case, the injured employee worked for the division of the county clerk’s office that was in charge of planning the annual office holiday party. During regular working hours, she designed invitations, arranged for catering, and helped plan the party. She also volunteered to serve as the “emcee” for the event. All employees were invited, but not required to attend, and the cost of the food and venue was paid for by a group of private attorneys who sponsored the party. Even if they did not attend, all employees were expected to contribute $13 to pay for a gift to the clerk of court and for cleaning up after the party.

On the evening of the party, she fell and suffered a fracture of the wrist and coccyx and a tear of her shoulder. She received short-term disability benefits and filed a workers’ comp claim for days missed from work, permanent partial disability, and medical expenses. When the insurance company denied the claim, it went through a series of appeals, which upheld the denial.

The appellate court used a six-question analysis to help determine if the injury arose out of the scope of employment:

  1. Did the employer in fact sponsor the event?
  2. To what extent was attendance really voluntary?
  3. Was there some degree of encouragement to attend, evidenced by such factors as:
    1. taking a record of attendance
    2. paying for the time spent
    3. requiring the employee to work if he did not attend or
    4. maintaining a known custom of attending?
  4. Did the employer finance the occasion to a substantial extent?
  5. Did the employees regard it as an employment benefit to which they were entitled?
  6. Did the employer benefit from the event, not merely in a vague way through better morale or good will, but through such tangible advantages as having an opportunity to make speeches and present awards?

While laws will vary by state, employers who take careful steps to disassociate the event from work and confirm that the venue and service providers are properly licensed will minimize their risk.
Tort

While drinking too much at a holiday party may derail a career, alcohol is at the root of many lawsuits and employers need to take steps to ensure that the revelry does not get out of hand. When excessive drinking occurs, employers can face claims of social host liability, negligence, and respondeat superior, which holds employers responsible for the acts of employees such as DUI cases.

A recent New York case, Gillern v. Mahoney, illustrates the exposure that excessive drinking can cause, even when the employer had no role in the celebration. A number of employees organized a holiday party and when a co-worker became intoxicated, they contacted his wife (also an employee and a nurse) to take him home. When she arrived, they assisted her in getting her inebriated husband into the car. When at home, she let him sleep it off in the car, but later, she found him dead on the car floorboard.

Even though the party was not sanctioned or paid for by the employer, was not held on its property, and all participating employees were off duty, the employer was sued for the worker’s death. Upon appeal, the appellate court found that the action of the co-employees was not the proximate cause of the decedent’s death and the employer and various co-employees could not be held responsible in tort.

It would be an easy solution not to serve alcohol, but that is not always realistic. Employers need to establish limits on the amount and type of alcohol that will be served. Definite “no’s” are an open bar and allowing employees to serve drinks. Limit the number of drinks with a drink ticket system or don’t provide free drinks at all, close the bar early, hold the event off site at establishments with a liquor license and properly trained bartenders, provide plenty of food, and arrange alternative transportation. Be sure management leads by example. Advise employees to be responsible with a statement on the party invitation and/or a written reminder on the responsibilities to drink only in moderation and to avoid driving after drinking.
Harassment

This year, where we seem more divided than ever and some are emboldened to mock or denigrate others, if it can go wrong, it will. In a social situation with alcohol, employees can lose their inhibitions and do offensive things that they wouldn’t normally do in a work environment. Yet, an employee’s diminished capacity is not a defense to claims of harassment or assault and employers could be held responsible because they created the environment for that conduct to take place. Other issues that can lead to lawsuits are a religiously themed party and religious symbolism, hanging mistletoe, inappropriate postings on social media that could lead to claims of a hostile work environment, harassment or discrimination.

While hosting a party off-site can better protect your company, employees can also assume office standards of conduct do not apply. Employers should remind workers that behavior at the party should comport with the same behavior that is acceptable in the workplace and that the same reporting procedures apply should any incidents occur. Make the dress code known and avoid holiday attire or costumes. Remind supervisors and managers to set a professional example, by staying clear of talking about promotions, performance, and other business matters related to individual employees, and not selectively offering personal compliments.
Gift exchanges

Similar to office parties, Secret Santa and Yankee Swaps, and other forms of gift exchange are popular during the holiday season. It’s important to make this voluntary and set parameters for appropriateness, inclusivity, and price.
Nine actions to minimize risk

While each state has its own nuances in the law, employers can best protect themselves with these actions:

  • Hold the party off-site and not during office hours
  • Ensure that attendance is truly voluntary; there is no coercion to attend and no high expectation of attendance
  • Be cautious about inviting vendors, clients or others with whom you have a business relationship
  • Refrain from engaging in business activities, such as speeches and distribution of awards
  • Avoid asking employees to perform specific functions at the party or recognize that in so doing, they could be considered in the scope of employment
  • Limit or do not serve alcohol
  • Remind employees that normal workplace standards of conduct are to be respected, including the use of social media, and immediately stop inappropriate conduct
  • Confirm that the venue is properly licensed
  • Understand your exposure and corresponding insurance coverage

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com