Part 2 of Light Duty and KOS in this Economy? Are you Crazy?

As construction companies continue to scramble for jobs, the idea of keeping injured workers on light duty or paying someone to stay home to recuperate just doesn’t seem to add up.

Before making a hasty decision to allow the Dept. of Labor and Industries to pay an injured worker time loss compensation, carefully consider what impact that may have on the future of your company. As we have discussed in other articles your experience modification factor (EMR) is the one thing that is either keeping you in the bidding process (if you have a low factor) or preventing you from getting a much needed job (if you have too high of a factor).

By keeping time loss off your workers’ compensation account you can either keep that factor low, and continue to be competitive in bids, or if your factor is too high, you can start to lower your EMR to a level that will allow you to be a legitimate bidder.

Did you know that if you can prevent time loss compensation from being paid out on a work related injury claim, the department will pick up part of the worker’s medical costs? In the current calculation of EMR’s employers are currently receiving up to a $1,790 credit on each medical only claim.

Let’s go through a short example to illustrate this. You have a claimant who has gone to the doctor and is excused from work for five days. Instead of allowing Labor and Industries to pay time loss, you either provide this worker with light duty at full pay or provide Kept on Salary (KOS). The total medical costs on his claim add up to $1,500. Applying the time loss credit of up to $1,790, this claim now costs your company $0. If you have allowed time loss to be paid, this claim would have costs your company the $1,500, plus whatever time loss was paid.

Again, it is easy, but short-sighted to look at the short-term effect of cutting an injured worker loose. By focusing in on the long-term health of your company, and determining what course of action will keep you competitive in the future, light duty and Kept on Salary may make business sense. If you have questions about your own situation, please feel free to contact Heather Davis at ERNWest (253) 237-0806.