Workers' Compensation MGMT 4030 Managing Employee Reward Systems
Workers’ Compensation: Purpose v Financial Assistance to Employees with Job- Related Injuries v Based on “No Fault” Concept v Worker that Accepts WC Cannot Sue Employer v Employer Provides WC Coverage v Average WC Insurance Rate = 1% of Payroll Costs v Dangerous Jobs Pay Higher Rates - up to 30% of payroll. Ex. WC for roofing employees
Experience Rating for WC: Cost Control Factors v Risk Factors (Based on Occupation) –Construction (high risk); but professor (low risk) v Frequency of Accidents in the Company –May vary depending on company accident history v WC Payout Schedule Varies by State –Ex. Lose one eye in Colorado, receive $20K, but in Wyoming only $10K
Workers’ Compensation: Benefits v Covers All Medical Expenses From First Dollar On –Note: Regular Health insurance requires a co- payment and possible deductible before benefits available. v Provides Replacement Income While Worker is Disabled - more generous than Soc. Sec. LTD –Total or partial disability payments. v Covers Rehabilitation Expenses v Provides Income to Survivors of Deceased Worker - Again, more generous than Soc. Sec.
Managing WC Costs v Safety Programs Can Lower Accident Rates v Comply with OSHA Safety Standards –Awareness of hazards, proper use of equipment and ergonomics of using computer. v Redesign Jobs with Risks of Repetitive Motion Injuries v Audit WC Claims and Challenge Fraudulent Claims - There are perverse incentives for fraud. v Encourage Disabled Workers to Return to Work on Redesigned Jobs