Friday, June 27, 2008

Injured Workers Aren’t Bilking the System

The bloggers at Compensation Advantage address the issue of workers’ compensation fraud and the long-perpetuated “Myth of the Bad Employee.”

They make the argument that we’ve made before that employees who are collecting workers’ compensation are not “faking it” or “milking the system.” Most importantly, they argue that injured workers aren’t the ones driving up the cost of workers’ compensation insurance. It’s good to hear another perspective on this issue.

The bloggers also argue that employers who make injured workers out to be “villains” may be responsible for longer absences from work.

Harboring feelings that injured employees are the “villains,” the employer focuses on resolving the resulting production issues and has little or no contact with them. The injured workers’ sense of self worth and identity spirals downward and animosity and distrust build. Litigation begins to look like the only available alternative.

Friday, June 13, 2008

Workers’ Comp Costs Rising is Pennsylvania

Another study from the Workers Compensation Research Institute (WCRI) shows that workers’ compensation costs per claim in Pennsylvania grew rapidly in 2005 and 2006.

The average total cost of claims filed by employees who missed more than seven days of work grew at a rate of 6 percent to 10 percent. The study compared Pennsylvania to 14 other states.

Total costs per claim in Pennsylvania were fairly typical of the 14 study states. This result, however, masked several offsetting factors. On the one hand, medical payments per claim with more than seven days of lost time were lower than the 14-state median and more workers returned to work in a week or less than in many other study states. On the other hand, compared to the median study state, Pennsylvania had higher indemnity benefits per claim with more than seven days of lost time and higher litigation-related expenses.

The study reported that medical payments per claim with more than seven days of lost time in Pennsylvania were 12 percent lower than the median of the study states for 2003 claims evaluated in 2006.

Another WCRI study found that the main reasons for the lower medical costs per claim were lower-than-typical prices paid for some services, physician visits that were less resource intensive, and hospital inpatient and outpatient costs per claim that were much lower than typical.

However, the average indemnity benefit per claim with more than seven days of lost time in Pennsylvania was 19 percent higher than the median of the 14 study states in 2003/2006 claims. This result, in part, reflects some characteristics of the Pennsylvania wage-loss benefit system.

The average expense of delivering indemnity and medical benefits to injured workers in Pennsylvania rose 10 percent in 2005/2006. During the whole study period, benefit delivery expenses per claim grew rapidly (9-15 percent per year), driven primarily by increases in medical cost containment expenses per claim.

The average benefit delivery expense per claim in Pennsylvania was 22 percent higher than the typical study state for 2003/2006 claims with more than seven days of lost time and expenses, a result driven mainly by higher litigation-related expenses per claim.

The study noted that Pennsylvania was not among the most litigious states. However, defense attorney payments per claim were 34 percent higher than the 14-state median for 2003/2006 claims, suggesting a somewhat more expensive and perhaps more complex dispute resolution process.

The study also found there was little recent change in Pennsylvania workers compensation in the speed of the first indemnity payment. The percentage of claims with more than seven days of lost time that were paid within 21 days of injury remained stable in 2005/2006.

For more information on the other states studied by the WCRI, visit www.wcrinet.org

Thursday, June 5, 2008

Protecting Vegas Construction Workers is Government’s Business, NY Mayor Says

New York Mayor Michael Bloomberg issued a call to action to government officials in Las Vegas and in the state of Nevada that they’re responsible for ensuring that workers remain safe on the job.

In the past 17 months, 10 construction workers have died while working on projects along the famed Las Vegas strip.

Two months ago, after a string of tragic construction fatalities shook New York, Mayor Michael Bloomberg gave an address to the city’s building inspectors.

“Your job is to save lives,” Bloomberg said. “That means that it’s your duty to make sure that anyone reporting to any construction job ... shouldn’t have to worry about going home safely that night.

“And let me make it as clear as I can: Simply shrugging your shoulders and saying, ‘Well, after all, construction work is a dangerous occupation,’ is behavior that will not be tolerated from anyone.”

In Clark County, where 10 construction workers have died in accidents on the Las Vegas Strip in the past 17 months, no one has uttered words as forceful as Bloomberg’s. But last week, local officials did begin to question whether government could do more to protect workers. New York City is one place they can look for answers.

Nail Technicians are Employees, Not Independent Contractors

A group of nail salons in Sacramento, Calif., were fined recently for not carrying workers’ compensation insurance on nail technicians. The salons classified the manicurists as independent contractors, but under state law they are clearly employees.

I’d venture that this is happening in states other state in nail salons, hair salons and other service-related industries.

Here’s the low-down on the situation in California, from the Sacramento Bee:

In recent sweeps of 17 beauty and nail salons in Sacramento, the state Division
of Labor Standards and Enforcement issued 16 citations to shop owners for
illegally classifying workers as independent contractors.

The DLSE
fined employers $1,000 for each employee not covered by workers' compensation
insurance and additional penalties for cash payment of wages without proper
documentation of withheld taxes and other deductions. In Sacramento County, the
fines totaled $61,000.

The DLSE carried out the two-day enforcement
raids in nine other counties in Northern California and the Bay Area, including
Placer County.

Labor Commissioner Angela Bradstreet said labeling
workers independent contractors allows employers to avoid payroll
taxes.

"It goes directly to the underground economy, and it gives
employers who are not complying with the law an unfair competitive advantage
over someone who is complying with the law," Bradstreet said.

In
addition, workers do not receive the benefits and labor protections that they
would be entitled to under state laws, she said.

Workers classified
as "employees" are protected by minimum wage law and laws mandating breaks,
workers' compensation, unemployment insurance, disability insurance and Social
Security.