How to Save Money from the 2013 California Workers’ Compensation Reform

2 Apr

The California Legislature passed SB 863 in September of last year, with most of the provisions taking effect January 2013. “Permanent Disability” benefits were increased by 40% at a cost to employers of over $1.2 billion in new or added costs per year. There were a number of other changes, some good for employers, others very technical. One of the most effective tools employers were given to save money to offset the cost increases of the law are “return to work” programs. This means it pays for every injured worker, who is not in the hospital, to be back on the job doing something within the limits of their ability, the day after their injury. It might be better to call this a “stay at work” rather than a “return to work” policy.
California employers can save over $400 million a year in workers’ compensation cost by using this “stay at work” approach. But the savings are even larger in future premiums! When an injured worker is off duty due to a work injury, and he qualifies for “temporary disability benefits” under a workers’ compensation policy, he receives only 2/3rd of his pre-injury wage. BUT, this same temporary disability benefit costs almost all employers 2 times or more the lost wages – because these claim costs are used to set their “experience modification, not for one, but for 3 years in a row!. SO- the employee loses money by being off work and his employer pays more than twice as much as if the worker were to come back – even if the worker was just putting in time.
But of course a good return to work program is much more effective than just wasting an employee’s time. Every company I know has some work that they just have not gotten around to, but need to do “someday”. Such activities are always a place to look for “modified work” within the physical limits of a recovering employee.
If you would like to learn more about the return on investment or economic value of “stay at work” or “return to work” programs, just email me at DonDressler1@hotmail.com

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