Early workplace injuries predictor of frequent filers

Workers injured in the first six months of their employment are more than twice as likely to have three or more lost-time injuries during their duration of employment than other workers, according to a recent study published in the American College of Occupational and Environmental Medicine. For each year employed before the first lost-time injury, the probability of having three or more lost-time injuries decreased by 13%, according to the study.

The study included 7,609 lost-time claims at Johns Hopkins Health System and University from 1994 through 2017. The injuries occurred among 5,906 workers; 84% were health care workers, and the remainder were academic employees. Although only 49 workers (0.83%) had five or more claims, they accounted for 3.5% of claim costs, or $4.8 million. The workers in the study had an average length of employment of 15.7 years.

Other studies have shown that new employee risk of injury is higher than other workers. Earlier research from the Toronto-based Institute for Work & Health (IWH) found that employees in their first month on the job have more than three times the risk for a lost-time injury than workers who have been at their job for more than a year.

Neither study delved into the issue of “why.” Common speculation is that training and mentorship were inadequate or that hiring practices are the root of the problem. It makes sense because newness is the common thread. Workers performing unfamiliar tasks in a new work environment with less knowledge and awareness are at a more significant risk regardless of their age, according to the IWH.

Yet, assumptions should not be made and each company must analyze their own data. Begin by looking at the data on the injuries incurred in the first six months of employment. Was the hiring process rushed or inadequate in anyway? Was there a post-offer physical exam?

Assess the effectiveness of training and acclimation to the job. Were new workers given real-life practice, a clear message about safety, site-specific information, allowed to start in low-risk situations and advance to higher-risk work? While people learn differently, the more they can perform the work, the better they become.

Review the incident investigations to look for commonalities – location, department, job function/procedure, equipment and so on. How effective was the return-to-work experience?

How you intervene depends on what you learn. It may be that you need to shore up your training program, implement a mentorship approach, or alert the supervisor to provide additional oversight so the employee works more safely. If there are “red flags” such as the injured worker immediately hiring a lawyer, conflict with supervisor or other workers, insufficient detail about injury/accident, no witnesses, failure to keep medical appointments, and so on, you should consult your attorney. In most cases, the injuries of new employees are legitimate, but new employees with fraud “red flags” require special attention.

The message to employers is that there is an association between early employment injuries and risks for multiple injuries. Repeat claims are costly. A thorough analysis is an opportunity to develop preventive measures or cut loose a potential serial offender.

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

The new overtime rule and workers’ compensation

The Labor Department estimates that the new overtime rule, which takes effect January 1, 2020, will affect 1.3 million workers. The new rule raises the minimum salary threshold from $455 per workweek to $684 per workweek. This means that salaried workers who earn less than $35,568 per year will be eligible for time-and-a-half overtime pay if they work over 40 hours, up from the current threshold of $23,660. While the new rule updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements, it does not alter the white-collar exemptions’ duties tests.

Employers need to make decisions about the compensation packages of exempt employees who earn less than the new weekly threshold of $684, but more than the current threshold of $455, before year’s end. The options are to increase salaries to the new level, reclassify employees as non-exempt, and structure workloads to preclude overtime hours.

The rule also permits employers to use non-discretionary bonuses and incentive payments paid at least annually to satisfy up to 10% of the standard salary level. In its FAQ, the DOL notes that, “if an employee does not earn enough in non-discretionary bonuses and incentive payments (including commissions) in a given 52-week period to retain his or her exempt status, the Department permits a “catch-up” payment at the end of the 52-week period. The employer has one pay period to make up for the shortfall (up to 10 percent of the standard salary level for the preceding 52-week period). Any such catch-up payment will count only toward the prior 52-week period’s salary amount and not toward the salary amount in the 52-week period in which it was paid. If the employer chooses not to make the catch-up payment, the employee would be entitled to overtime pay for any overtime hours worked during the previous 52-week period.”

The rule also raises the salary threshold for the highly compensated employee exemption (HCE) from $100,000 to $107,432 per year, but it does not change how employers may use bonuses to meet the salary level component of the HCE test.

How will this affect workers’ compensation premiums?

While the premium calculation can be more complicated, this simple formula gives an idea of how it is done:

Payroll (per $100) x Classification Rate x Experience Modifier = Premium

What’s important is that in almost all states payroll (which is often referred to as the basis for premium) is actually remuneration, which is much more than payroll. Increasing salaries of exempt workers will increase premiums, based on the employee’s classification. However, the issue of non-exempt workers and increased payroll that results from overtime is more complicated. To understand how the new overtime rule will impact premium, you’ll need to know the rules for treating overtime pay in your state.

With the exception of four states (Pennsylvania, Delaware, Utah, and Nevada), overtime pay can be reduced to straight time when determining the workers’ comp premium. Many insurance companies define overtime pay as the wages paid at one-and-a-half times the employee’s hourly rate for overtime hours. So, in most states, if a worker makes $20/hr. and is paid $30/hr. for overtime, the company pays premium on the $20, but not the extra $10.

In Pennsylvania, Delaware, Utah, and Nevada, overtime pay is subject to premium and may be added during the annual comp audit process, if not properly projected in your payroll for the year. So, in the case above, the company pays premium on the full $30.

Next steps for employers

  1. Make decisions about the employees who are affected by the new overtime threshold.
  2. Clearly communicate to all employees the new rule. If employees are being reclassified, it is important not only for them, but for those who report to them, to understand why they are being reclassified. Be sensitive to the perception that changing from exempt to non-exempt can be viewed as a negative change in status. Individual meetings to reinforce that the change is based on regulations, not performance, can help.
  3. Evaluate your time tracking system and train reclassified employees in its use. An automated time tracking system is critical in ensuring accurate overtime pay.
  4. Assess your telecommuting policies and the ability to monitor hours worked, if telecommuters are being reclassified.
  5. Keep adequate records of overtime. In states that allow overtime exclusion for workers’ comp, if adequate records are not maintained, the overtime pay cannot be excluded from the total payroll and you must pay on the entire amount. If the rate of overtime varies, for example, time-and-a-half and double time, be sure the records are distinct, as the adjustment will differ. This information should be in a form that is easily determined by the auditor, summarized by classification on an annual basis.
  6. Keep an eye on your projected payroll for your workers’ comp policy. At the year-end of your policy, an audit will determine if you’ve underestimated payroll. To avoid year-end surprises, be as accurate as possible when projecting annual payroll.

It’s important to note that the new rule does not take precedence over more stringent state rules. Generally, businesses must comply with the law that provides the most protection for the employee. Many states have higher thresholds and additional criteria for exempt status than under federal law. Multi-state employers should look at compliance on a state-by-state basis.

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

HR Tip: Employees cannot decline FMLA leave even when a collective bargaining agreement says otherwise

In March 2019, the DOL issued an opinion letter that neither an employee nor an employer may decline FMLA leave when an eligible employee is absent for an FMLA-qualifying reason. The letter noted this is particularly true even if the employee wants the employer to delay the designation of FMLA leave.

Apparently, this created confusion in union environments where there is a collective bargaining agreement that allows the employee to use paid leave first and then use FMLA leave after paid leave is exhausted. In a new opinion letter , the DOL made it clear that an employer still may not delay designating paid leave as FMLA leave even if the delay otherwise complies with a collective bargaining agreement.

The bottom line is that in all cases once the employer has sufficient information to determine that an employee’s leave is covered by the FMLA, it must designate the leave as FMLA leave.

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

HR Tip: Supreme Court ruling alerts employers to quickly compare EEOC complaints and lawsuits

In Fort Bend County v. Lois M. Davis published on June 3, the US Supreme Court ruled that Title VII’s charge-filing requirement is a processing rule, not a jurisdictional prescription, and an objection to it may be forfeited “if the party asserting the rule waited too long to raise the point.” This ruling revolves around the fact that employees filing suit under Title VII of the Civil Rights Act of 1964 must first file a complaint with the EEOC.

It means that employers must immediately check if charges in litigation filed under Title VII jive with those in the previously filed EEOC complaint. If the charges do not match, and employers act immediately, then they can get that claim dismissed, but delaying the action, which occurred in this case, means that chance is forfeited. The question of how long an employer can wait before raising an objection or defense without risking forfeiture was not decided by the Supreme Court and will be litigated and developed in the lower courts going forward.

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

HR Tip: New FMLA forms available from DOL

The Family and Medical Leave (FMLA) certification forms and notices are now valid until Aug. 31, 2021. DOL didn’t make any substantive changes to the forms, other than the new expiration date. Here they are:

Notices

Certification forms

The DOL must submit its FMLA forms to the Office of Management and Budget (OMB) for approval every three years. OMB review is required to ensure the FMLA certification and notice process isn’t too bureaucratic.

While the forms aren’t mandatory, many employers use them. Some employers copy and paste the DOL form into their own form, replacing the DOL logo with their own.

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

HR Tip: SHRM benefit survey on popular perks30

aAccording to the Society for Human Resource Management’s (SHRM’s) 2018 Employee Benefits Survey the current low level of unemployment is driving employers to beef up their benefits to retain and recruit employees. More than two-thirds of the employers in the survey raised their benefit levels in the past 12 months. There were expanded offerings in:

  • Health-related benefits (up among 51 percent of respondents)
  • Wellness (44 percent)
  • Employee programs and services (39 percent) such as retirement savings and advice
  • Professional and career development benefits (32 percent)
  • Leave, family-friendly and flexible working benefits (each 28 percent)

The report details the types of increased benefit offerings in each category as well as trends that have stabilized or reversed. For example, under Wellness, it notes that substantial increases were seen in:

  • Company-organized fitness competitions/challenges (38 percent, up from 28 percent last year).
  • CPR/first aid training (54 percent, up from 47 percent).
  • Standing desks (53 percent, up from 44 percent).

“One sign that employers are targeting their benefit spending for maximum effectiveness: Since 2014, the share of organizations offering offsite fitness center memberships fell to 29 percent from 34 percent, while those that provide a subsidy/reimbursement for offsite fitness classes rose to 16 percent from 12 percent. Too often, people will join a gym but rarely go, employers found, while those who sign up for classes are likely to use them.”

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