Tips to Reduce the Cost of Workers Compensation

Workers Compensation Costs

Workers compensation insurance is compulsory in all but a handful of states. However, you can reduce the potentially costly burden of this by taking steps to lower your premium. Here is our guide to preventing injuries and handling claims to minimize costs to your business.

Create a safety program

The best way to reduce compensation costs is to prevent accidents happening in the first place. You can’t eliminate the risk of worker injuries completely, but a safety program will help you identify and eliminate hazards, improve work safety procedures and ensure all staff are properly trained in health and safety.

Tip: Small and medium-sized businesses can get a free consultation from the Occupational Safety & Health Administration (OSHA).

Make positions more flexible

If an employee is off work due to an injury, you can lower the associated costs to your business if you are able to offer them the chance to return to work in a reduced capacity. This can be done in a number of ways, such as allowing them to work reduced hours or giving them lighter duties while they recover. This may require you to reorganize your team slightly to accommodate, so it pays to plan ahead and have an idea of how you could restructure your workforce in the event of an injury.

Take note of doctors’ restrictions

When an employee is injured on the job, their doctor will document their work restrictions (limiting the amount and type of work they can do while recovering) and the employer must accommodate these restrictions. Make sure that both you and your employee understand any restrictions in place and that they are followed, otherwise it could affect the insurance claim.

Don’t delay on reporting injuries

If a workplace injury occurs, it is the employer’s responsibility to report it to the state Workers Compensation Board (WCB) within 24 hours and file a report to the WCB within three days. Delays in reporting can lead to lengthier claims and higher costs, not to mention problems if you fail to meet deadlines for paying benefits. You can find details of your WCB official here and a copy of the Employer’s Report form here.

Have plenty of light-duty job options

Have an ongoing list of light-duty transitional jobs that are suitable for injured employees. This will minimize time off work and wage losses for employees, which in turn will decrease claims costs.

Encourage health and well-being among employees

You can look to reduce worker compensation costs through preventative as well as reactive measures. Promoting healthy lifestyles among employees will not only reduce the likelihood of injury and illness but can also improve the workplace environment. Studies have shown that obesity is linked to higher workers compensation costs so making the effort to engage employees in sport or exercise, e.g. subsidized gym membership, could save you money in the long run.

Communicate regularly with injured staff

Stay in contact with any injured employees to keep up-to-date with developments and expected return dates. If you show concern for employees from the point of injury, rather than just wait for their return to work, it will help to remind them of their value to the organization and will make them more enthusiastic about returning.

Join a professional employer organisation (PEO)

A PEO can help you manage workers compensation claims by helping you improve your workplace safety and assisting with the return to work of injured employees.

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