When it comes to controlling worker’s comp costs, one important area to focus on is getting injured employees back to work quickly. However, there may be unintended disincentives built into the system that help keep workers out longer even when their injuries have healed. While it’s important to make sure injured workers are taken care of properly, it’s essential they’re not staying out of work any longer than necessary for the sake of your company’s ongoing financial health.
Types of Disincentives
A serious injury that results in time off from work can be financially devastating for just about anyone. Worker’s compensation insurance provides for medical care related to the injury, as well as a percentage of the employee’s salary after a certain period of time has passed.
However, it’s common for employers to offer additional programs designed to help fill in the gaps, and employees may have certain types of personal insurance coverages that include disability benefits as well. Under the right circumstances, any of these can act as a disincentive for an employee to return to work. They include:
- Salary and Supplemental Wage Programs – In one way or another, these offer an employee the equivalent of their full pay while they are unable to work due to injury. Given the choice, most people will choose to go back to work and be productive to earn that pay as soon as they’re able, but there will always be some who have no qualms about gaming the system for a bit.
Also, because worker’s comp payments are not taxable, receiving a supplemental benefit to bring earnings up to regular working levels may actually allow injured employees to make more than they would by working, and that can be a hard situation to let go of once the injury is healed.
- Continuation of Employee Perks – While it might not seem like much on its own, being able to take advantage of employee perks like club or professional dues, employee discounts, and others can discourage injured employees from getting back to work quickly, especially when coupled with supplemental income programs.
- Loan Protection Policies – Some employees, particularly those who work in jobs with a relatively high risk of occupational injury, may have personal insurance policies that take over their mortgage or other types of consumer loan payments if they are injured on the job until they’re able to return to work. This, again, can put the employee in a better financial situation than actually working, making it disadvantageous to do so.
- Open-ended Job Return – Of course, none of the programs listed above is a long-term replacement for an actual job, and so even employees who try to take advantage of the system will eventually want their job back. That’s why holding their job open for them indefinitely only exacerbates the impact of the other programs. Putting a reasonable limit on the amount of time the job will remain available that’s appropriate to the employee’s situation is a good way to counteract this dynamic.
The Right Balance
It’s always a good thing to make sure your employees aren’t devastated financially by an injury, but getting them back to work quickly is essential to keeping your worker’s compensation premiums under control. That’s because the longer a worker is out, the more benefits they receive, and so the more expensive the claim becomes. Finding the right balance between supporting your workers and encouraging them to return to work quickly is the key to managing this system in a way that’s most beneficial to all parties involved.
If you’d like to learn more about the ways we can help you build an effective return to work program, as well as the excellent worker’s compensation insurance policies we offer, contact our offices today.
