Unfortunately, despite its importance, workers’ compensation can be quite financially-draining on its own for an employer, so it’s imperative that they manage their finances smarter. In order to come up with the best possible financial outcome, there are a few steps any employer should take. Here are 6 easy ways to financially manage your workers’ compensation.
Prevention is, and always will be, better than cure. In your case, you want to limit the possibility of any kind of damage that could befall your employees on the job. The best way to minimize the risk is through enacting safety protocols or safety programs. Following the guidelines of the Occupational, Safety, and Health Administration (OSHA) is a good place to start. Such a program will help you in many ways; for starters, you’ll become more aware of the workplace safety hazards and take appropriate measures in fixing them. In case they can’t be fixed, you’ll devise safety protocols and alert all employees of the safety measures they need to follow during operations. This program should be directed at both leaders and employees, so everyone can be aware of their roles and responsibilities.
There’s an invaluable treasure found in the data you, and similar businesses, have gathered. By going through the list of most common workplace injuries, you can enact effective preventive measures and reduce the risk possibility greatly. Some of the most common workplace injuries (and lawsuit claims) are the following:
- Slip and falls
- Overexertion that results in pulling muscles
- Bodily reactions resulting from avoiding falling objects or getting struck by objects
- Motor accidents
- Machinery Accidents
- Conditions resulting from long exposure to repetitive motions, such as tendonitis and carpal tunnel syndrome
- Workplace violence
The annual workers’ comp premium audit sets the tone for a lot of future and ongoing financial decisions, so it’s crucial you ensure everything is in proper order. To start, you’ll have to keep a comprehensive list of all employees, detailing their duties, hours, payroll classifications, and payroll. The financial experts at Pay Stubs 365 noted that an automatic pay stub generator will go a long way in this process. Such an automatic generator will keep all your reports organized and detailed in one place so you can use them easily whenever you need to. Why is such a report relevant in a workers’ comp premium audit? That’s because the premium is calculated differently for different employees.
The premium is calculated for every individual employee using the following equation:
Payroll classification rate * experience modification rate * (payroll/100)
While preparing for the audit, you’ll have to double-check that all employees are classified according to their right position. You should also separate full-time employees from independent contractors. Finally, make sure to go over your annual unit statistical report and ensure that claims that should’ve been closed are indeed closed. Otherwise, you’ll incur even higher premiums.
You can let your injured employees seek medical attention on their own, but it’s more effective to direct them to your network of medical providers specializing in occupational medicine. Not only will these experts provide optimal treatment, but they’ll also provide these employees with a detailed report to the extent of the injury (as required by law). Otherwise, injured employees may fail to get optimal treatment and you’ll be the one left with the consequences (read: more complications and higher treatment costs). Before all, make sure to enact a system that forces injured employees to get immediate medical care.
To keep providing optimal care, it’s best to develop a program that helps the recovering employees ease back to work. During this period, they can carry out light-duty tasks that both help them get back on their feet and bypass the financial strain you’ll otherwise incur once the lost-time wages start.
Make sure to ensure the validity of the claims with the claims adjuster by alerting them to any pre-existing injuries or conditions; that would make the claim eligible and limited to second injury funds only. Workers’ compensation laws are limited to injuries suffered on the job, and that doesn’t include covering pre-existing conditions or their complications. Many employers fail to realize that fact, enduring hefty treatment costs as a result.
Workers’ compensation is a kind of insurance that preserves your employees’ rights while protecting you against their lawsuits. Almost all employees know that they’re required to cover the cost of damage made to an employee on the job, whether it’s their direct fault or not. This coverage best be provided under workers’ compensation insurance; otherwise, employers can find themselves incurring hefty expenses. In return for providing compensation, the injured employees give up their right to sue their employer for damage. That being said, there’s no reason for the employer to endure hefty expenses in the process.