(By Elton Mwangi)
No. Workers’ compensation is not considered an employee benefit. It’s required by law as a condition of employment, similar to unemployment insurance, social security, and disability insurance.
Workers’ compensation is an employer liability insurance type that offers monetary benefits to employees who become disabled or injured in employment. Without workers’ comp, your staff can sue you for illness, injury, or disability related to their work to cover medical costs and missed wages. It also covers funeral costs and ongoing care costs.
How Workers’ Comp Differs from Employee Benefits
Employee benefits, also called perks or fringe benefits, are non-wage compensation offered to workers in addition to their normal salaries or wages. These are not required by law, unlike workers’ comp.
Examples of employee benefits include tuition reimbursement programs, house allowance, company car, massage at work, and sleeping pods in the workplace. Some employers will offer basic employee benefits such as paid leave, vacation, and health insurance, while others will go above and beyond to offer more benefits like childcare.
Employers offer benefits to improve their employees’ economic welfare to boost retention.
Taking Workers’ Compensation Seriously
Many employers don’t like to pay workers’ comp because it increases their insurance premiums. If the insurance company has to pay for surgeries, ongoing care costs, and lost wages, claims get expensive, which pushes premiums up. This also happens if many workers file workers’ comp claims in a short period.
Companies will fight legitimate claims to keep insurance premiums down. However, the Workers’ Compensation Act protects employees.
If an employer does not award an injured worker with workers’ compensation, they can be found guilty of a third-degree misdemeanor with a potential fine of $2500 and a one-year jail term.
In the case the court finds the company’s lack of compliance to be intentional, the employer can be found guilty of a third-degree felony with a potential fine of $15,000 and a seven-year jail term. The company will also have to deal with hefty claim damages.
Suppose an employer fails to cover its employees and an injured worker files a claim petition with the Bureau of Workers’ Compensation. In that case, the employer will not only pay medical costs and wage loss related to the claim. They’ll also incur the costs of hiring an attorney, penalties, and suffering damages from a suit.
Employees also have the protection of the Uninsured Employers Guaranty Fund. It offers benefits to injured employees whose employers lack workers’ comp insurance. The institution will then aggressively seek reimbursement from the employers, including attorney fees, penalties, interests, and litigation costs.
The cost and risk of not taking workers’ compensation are high.
Employers not only need to cover their employees, but they also need to give benefits to genuine cases. Otherwise, they’ll incur hefty penalties and a bad name, keeping top talent away.
How to Reduce Workers’ Compensation Claims
Reducing workers’ comp by cutting corners is no longer an option. But if you make your workplace safe, it will reduce claims and insurance premiums. Use these strategies to reduce workers’ comp:
Create a Safe Workplace
- Creating a safety culture at the workplace will reduce accidents resulting from slips and falls, lifting heavy items, and operating machinery. It’ll also boost enthusiasm, productivity, and retention.
- Have workplace safety programs and train new employees on safety policies during onboarding. Also, carry out refresher training for experienced employees to keep the knowledge fresh in their minds.
- Use posters, regular notifications, and meetings to communicate your safety culture. And remember to reward outstanding safety records.
Implement an Injury Procedure
- This means having steps in place to manage injuries when they occur. The actions need to be immediate, and all parties need to know their job description so that the severity of the injury can be avoided.
- When the process is smooth, employees are reassured that their colleagues know what to do if they’re injured. They’re also empowered to make decisions that reduce the severity of workplace accidents.
Set Up a Return-to-work Program
- According to research, companies that communicate with injured employees away from work have lower workers’ compensation costs.
- The program encourages workers to return to work as soon as they feel they’re able to. They’ll start earning their paycheck, and employers will stop incurring the claim-related costs.
Workers’ compensation is not considered an employee benefit as it is government-mandated. Employee benefits are not required by law, but they differentiate average employers from exceptional ones.
Taking workers’ comp seriously by compensating the claims of genuine cases, creating a safe workplace, implementing an injury procedure, and setting up a return-to-work program will motivate employees, increase their productivity, and keep your costs low.
Get in touch with Zupnick & Associates to find the best workers’ compensation insurance for your budget.