Things you should know

NCCI’s 2020 Regulatory and Legislative Trends Report

In addition to a comprehensive review of the activity in more than 20 states to address workers’ compensation presumptions of compensability in response to the COVID-19 pandemic, NCCI’s 2020 Regulatory and Legislative Trends Report provides an overview of actions by state legislatures, governors, and regulators (through July 31, 2020) to address workers’ compensation insurance.

Key subjects include:

  • Workplace-related mental injuries
  • Legalization of marijuana
  • Reimbursement for medical marijuana
  • Single-payer health insurance
  • Employee vs. independent contractor determinations
  • Court cases impacting workers’ compensation
  • Law-only filings in 2020
  • Average approved changes in loss costs and rates

Mega claims (over $3M) on the rise

According to a new study by 10 rating agencies of workers’ compensation claims from 2001 through 2017, during the Great Recession the rate of mega claims declined sharply, with the fall in construction employment, but they have consistently increased since 2013.

While the construction sector makes up less than 20 percent of all workers’ compensation claims, it accounts for over 40 percent of mega claims. Motor vehicle accidents give rise to 20 percent of mega claims and 30 percent of claims with more than $10 million in incurred losses, but represent less than 5 percent of all indemnity claim.

Mega claims comprise a relatively small percentage (0.04%) of all indemnity claims in workers’ compensation, but add $1 billion to $2 billion in losses every year. The largest share are in California and New York.

The good news is that insurers are identifying the potential for such claims much quicker than in the past with analytical models. However, it still takes time to breach the $3 million threshold. Less than one-half of mega claims reach the $3 million threshold by 18 months from policy inception, and less than 90% reach that threshold by 126 months from policy inception.

Labor Department issues guidance on tracking employees’ teleworking hours

Although the new Field Assistance Bulletin addresses employers’ obligations under the Fair Labor Standards Act (FLSA) for remote work that has skyrocketed during COVID-19, it applies to all other telework or remote work arrangements.

NLRB upholds company’s moonlighting ban

In Nicholson Terminal & Dock Co., the National Labor Relations Board (NLRB) upheld the company’s “moonlighting” policy that prohibited employees from having another job that could be inconsistent with the company’s interest, have a detrimental impact on the Company’s image with customers or the public, and could require devoting such time and effort that the employee’s work would be adversely affected. It also noted that employees are expected to devote their primary work efforts to the company’s business.

New safety resource for construction industry from ASSP

State News

The American Society of Safety Professionals (ASSP) has launched a new library of construction safety resources.

California

  • The Workers Compensation Insurance Rating Bureau’s governing committee voted to recommend a 2.6% increase in pure premium advisory rates in the state over last year. Had it not been for the expected impact of COVID-19, there would have been a recommended a rate decrease for 2021 of 1.3%. If approved, it will be the first increase since Nov.2014.
  • The Workers’ Compensation Institute released an online application to support interactive analyses and comparisons of COVID-19 and non-COVID-19 claims.
  • The Division of Workers’ Compensation (DWC) has posted an order adopting regulations to update the evidence-based treatment guidelines of the Medical Treatment Utilization Schedule (MTUS).

Minnesota

  • The Department of Labor and Industry has pushed back the launch of a new electronic claims management system, known as Work Comp Campus, to Nov. 2 to give stakeholders more time to prepare.
  • The Department of Labor and Industry has updated the state’s medical fee schedule conversion factors to keep up with inflation.

New York

  • The Workers’ Compensation Board adopted a new rule that applies to reimbursement codes and values for COVID-19 testing when a workers’ comp claim has been filed or when testing is part of a pre-operative protocol in keeping with health department guideline. The Board also published an emergency rule, allowing telemedicine technology to be used in emergency settings.
  • The Board reminded stakeholders that the switch to a more robust claims data reporting standard, EFI 3.1, is coming next spring, and testing will begin in November. Webinars on the electronic submission system are being held on the third Tuesday of each month.

North Carolina

  • The Industrial Commission’s Rules Review Committee approved technical corrections to a temporary mediation rule. The rule no longer requires parties to attend mediations in person but allows for the use of technology to facilitate a remote meeting.
  • Registration for the Workers’ Compensation Educational Conference, to be held online Oct. 13-16, is now open.

Pennsylvania

Tennessee

  • Registration for the Bureau of Workers’ Compensation Educational Conference to be held virtually Oct. 26 – 30 is open.

Virginia

  • The Corporation Commission will hold a public hearing in October on NCCI’s proposal to cut average loss costs by more than 20% for the voluntary market.

HR Tip: DOL issues three opinion letters and fact sheet

After a long hiatus, the Department of Labor (DOL) has begun issuing opinion letters to assist employers and employees in interpreting laws.The first opinion letter, FLSA2018-18 addresses how employees without “normal working hours” should be compensated for travel time involving an overnight stay.

The letter provides two methods for determining an employee’s normal work hours and whether travel time is compensable. The employer may review the employee’s time records during the most recent month of regular employment and use the average start/end times during that time period. Employers also may negotiate with the employee or employee’s representative and agree to what constitutes the employee’s normal work hours.

The second letter addressed a situation in which an employee needs to take a 15-minute break every hour in an 8-hour workday due to a serious health condition (supported by medical certification). Most meal and rest break rules are governed by state law; federal law does not require meal or rest breaks for adult employees. However, for employers that offer short breaks (up to 20 minutes), the Fair Labor Standards Act does require employers to pay employees for that time and count that time as hours worked when calculating overtime pay.

In FLSA2018-19, the DOL clarifies that eight rest breaks given by an employer to accommodate an employee’s serious health condition predominantly benefit the employee and are not compensable as a result. However, these employees must be compensated for the same number of breaks taken by co-workers.

The third letter, CCPA2018-NA, considers whether certain lump-sum payments are considered “earnings” for purposes of the garnishment limitation in Title III of the Consumer Credit Protection Act (CCPA). The letter specifically analyzes 18 types of lump-sum payments and specifies that lump-sum payments for workers’ compensation, insurance settlements for wrongful termination, and buybacks of company shares do not constitute “earnings” under the CCPA.

Higher education fact sheet

While cautioning that job titles alone are not enough to determine if someone fits within a white-collar exemption, the fact sheet on higher education and overtime pay under the FLSA states that a faculty member who teaches online or remotely may qualify for the exemption for teachers. This includes part-time faculty. Athletic coaches at colleges and universities also may qualify for the exemption, but not if their primary duties are recruiting.

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