Over the years, state and federal governments have enacted a number of safety regulations in workers’ compensation programs to provide for a safe working environment. Even for the best employers following workplace safety guidelines, accidents do happen. When they do, it is important to follow recognized procedures when responding to work injuries. Failure to properly report and respond to the injury can have significant adverse consequences.
Penalties under State Workers’ Compensation Act
Being aware of requirements under a state workers’ compensation are important for an employer who is required to purchase and maintain workers’ compensation insurance. It is important to be aware of the statutory guidelines associated with a number of responsibilities an employer has once someone is hurt at work.
Some common errors and omissions are as follows:
- Failure to file the First Report of Injury in a timely manner;
- Commencement of wage loss and other workers’ compensation benefits; and
- No clear guidance to injured workers as to their rights and responsibilities when it comes to medical and rehabilitation benefits.
While an employer is not required to give an injured person legal advice regarding their work injury, each state has basic responsibilities under the Act to their employees. It is important for employers to understand their obligations and properly follow through after an incident.
A best practice to communicate with employees regarding workers compensation benefits is to provide an Employee Brochure. The employee brochure will provide information on the principles of workplace safety, the benefits to the employee workers compensation provide, an action plan for what to expect, and information on the role played by medical providers.
Compliance with State and Federal OSHA Regulations
The Occupational Safety and Health Administration (OSHA) is a federal agency within the Department of Labor that has congressional authority to implement workplace health and safety. All states have similar departments that also advise employers of additional state regulations that govern these same issues.
In addition, the responsibilities imposed by a state workers’ compensation act, employers are also required to implement applicable state and federal policies. In the context of work injuries, this often includes accurate reporting of certain injuries and provides parties with information about incidents.
Various OSHA requirements also require employers to have various safety postings and make them available to all workers. One such posting includes Material Safety Data Sheet (MSDS) requirements that contain information about harmful substances.
Impact on Experience Modifier
In order to accurately price workers’ compensation premiums, companies offering insurance base a premium around an employer’s “experience modifier.” This calculation is based on a period of three years of loss and is recalculated annually.
While the purchase of workers’ compensation insurance is a significant driver in costs for businesses, it is fraud to not report workplace incidents. It is also not ethical to “pay off” an injured employee so he or she does not file a workers’ compensation claim. If an employer is caught engaging in such practices, it can result in loss of insurance, as well as civil or criminal penalties.
Loss or Evidence Spoliation
Immediate accident investigation is key to driving down costs associated with workers’ compensation claims. Failing to investigate a claim from the onset can have a number of adverse consequences. The following is a partial list:
- Failure to identify and interview witnesses to the event;
- Loss of physical evidence that may diminish chances of recovery against a third party in a subrogation claim; and
- Court sanctions for the loss or spoliation of evidence.
Conclusions
Failure to report and respond to a work injury can cause problems in the end. While there is the moral obligation to help a person suffering physically from an injury, there are also a number of legal obstacles that can be difficult to overcome.
Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. http://reduceyourworkerscomp.com/about/. Contact: mstack@reduceyourworkerscomp.com.
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.
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