NEWSROOM

by Greg Kabacy, Employer Resources Northwest

When the economy for construction turns south, workers compensation costs and claims often fall well below the radar. Getting the next job, and trying to figure out ways to not lay off employees tends to dominate the early morning coffee talk instead of who is on light duty for the day.

As many of you know, your experience modification factor (EMR) can be the difference between you winning a bid and going out of business. In Washington State, an employer can receive an EMR well below what they could normally achieve on their own by having three straight years with no time loss claims.

By keeping time loss off your workers compensation account you can achieve 10%, 20%, even 30% savings every year in your labor and industries premiums. If the prospect of providing light duty or keeping an injured worker on salary is still too much to bear in today’s economy, keep this in mind. Let’s say you already have a time loss free discount rate from the Department and have an individual on light duty from an injury. Business slows down and your first instinct is to get rid of your excess non-producing employees. You may be tempted to let the person that is on light duty go, and have Labor & Industries cover his costs with time loss payments. If you allow that individual to go out on time loss, it is almost guaranteed that your rates will increase by as much as 25% in the next year or two. So while you are enjoying a lower rate this year, by allowing a person to go out on time loss you may have just put yourself out of the running on future job bids and may put your company at further risk. Is that the position you want to be in when the economy finally turns around?

Are we advocating for you to keep all of your injured workers on light duty or kept on salary? No. This is not an achievable goal depending on various circumstances. But keeping a person on salary for 2-4 weeks will buy you some time to do one of two things: First, you can use that time to determine if you can provide light duty to that individual and bring them back to work on something meaningful. Second, you can determine how bad the injury is. If it appears the person is going to be off work for more than 30 days, keeping that person on salary may not necessarily the best option.

It is easy, but short-sighted to look at the short term effect of cutting an injured worker loose. By focusing 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 at (253) 237-0806.