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NEWSLETTERS
NEWSLETTERS
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In this issue
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Case Study: Consolidation of Multi-State Payrolls Saves Company $283,000 and Lowers Experience Mod
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Know your exposure to Workers' Compensation claims from different states
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12 suggestions to help you avoid hiring a Workers' Compensation claim |
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Case Study: Consolidation of Multi-State Payrolls Saves Company $283,000 and Lowers Experience Mod
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Insured
The company grows and distributes plant materials and nursery stock nationwide and employs more than 1,800 at plants located in 10 states.
Situation
The company's Experience Modification Factor climbed steadily and management did not understand why this was occurring.
Assessment
Certified WorkComp Advisors (CWCAs) discovered that the Mod was distortional high because the only data factored in was the New York payroll information, which accounted for more than half of the overall payroll for the entire company. The combined NCCI data from the other 10 states was not being recorded. Thus, the New York Mod was not benefiting from the lower Experience Mod from the other states. The CWCA's researched the situation and found that the company had different Mods in each state. The company was having a NY only Mod issued by the NYS Rating Board. It wasn't taking advantage of the ability to combine many of the other states they operate in to produce a combined NCCI modification. The NY operation was being charged an inflated modification because the payroll and favorable loss experience from the other locations was not factored in the NY only mod.
Solution
The CWCA's were in place as the agency for the company's New York location. With the approval of the client, they began to collect all data related to the other locations, which was a challenge due to the fact that each location placed it's own WC policy. Utilizing training they received from the Institute of WorkComp Professionals, the CWCA's put all the information into a spreadsheet and then presented the data to management. This resulted in receiving the Broker of Record Letter to begin working on the other policies.
Result
As a result of the work by the CWCAs, the company's Experience Mod dropped a total of 113 mod points over 4 years, netting the company a savings of $283,000.
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Know your exposure to Workers' Compensation claims from different states
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Since Workers' Compensation is regulated primarily by individual states, there is no one single set of rules governing multi-state exposures. As can be seen from the case study in this eBulletin, Consolidation of multi-state payrolls saves company $283,000 and lowers Experience Mod, there can be substantial savings when the exposure is properly managed. On the other hand, when not properly managed, exposures in other states can result in unpleasant surprises or hidden overcharges.
Here are some issues to consider:
* Do you have operations in multiple states?
* Do you employ residents from other states?
* Do you have employees who travel to other states?
* Do you have employees who work in other states?
* Do you perform work in other states?
* Do you use independent contractors or subcontractors from other states?
Keeping current with the various laws governing multi-state exposure can be a challenge. Be sure to assess your exposure and discuss with your advisor.
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12 suggestions to help you avoid hiring a Workers' Compensation claim
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Injuries often begin at the date of hire when insufficient time and resources are committed to ensuring that the employee is a good fit for the position and company. Many employers are confused about what they can and cannot do during the hiring process. While federal and state laws restrict certain questions during the interview process, there are steps you can take to minimize the possibility of hiring a problem claim.
1. Be sure to conduct a thorough interview with the candidate. Ask them open-ended questions to see what the individual would do in certain situations. Some examples are: "What is the greatest challenge that you've had to overcome in your work career?" "Tell about a time when you had a conflict with: (a boss, subordinate, co-worker). How did you handle it? What was the end result?" Be sure not to talk the majority of the time but instead get to know the interviewee.
2. When hiring an individual, it is very important to consider safe behavior to prevent Workers' Compensation problems. While an employer cannot ask the applicant medical questions or whether he or she ever filed Worker's Compensation claims, you can ask open-ended safety questions regarding the job at hand and how they would perform the essential functions of the job. Let the applicants know that if they're accepted for a job, they'll go through a fitness-for-duty physical and be asked questions about their medical history. (see # 11)
3. To get a good understanding of the individual's work ethic, ask questions regarding tardiness and sick leave. While you can't ask, "How many days were you absent last year due to illness?" or "Have you filed a Workers' Compensation claim?" a good way to bring these up is: "Describe your attendance record as an employee of ABC company."
4. Conduct a thorough background check, but be sure to obtain a written consent from the candidate before doing so.
5. Be sure to verify past employment claims and follow up with references. Even though many employers will only verify positions and dates of employment, you can usually infer what the employer thinks based on the tone of voice. Find out if the individual is eligible for rehire. Pay careful attention to "gaps" in employment history.
6. Conduct criminal conviction checks. Most public records services have criminal convictions records for almost every large county in the United States.
7. Include job-related injuries, Workers' Compensation claims, substance abuse and safety records as part of a background check. Be cautious if there is what appears to be a negative pattern.
8. Verify education and certification accomplishments. School and universities will be able to verify if an individual graduated. If a person claims to have a license or other certifications, be sure to call the issuing organization to verify.
9. If hiring a driver, be sure to compare the results of the driver's official motor vehicle report with answers to the driving record and driving violations questions on the application. You need to know if an applicant is hiding a bad-driving record.
10. Many companies also use skill and personality testing to assess competency and isolate undesirable personality characteristics associated with stealing or poor work ethics. Whatever tools and standards employers use to screen applicants, they should establish reasonable criteria and apply them uniformly and strive for transparency.
11. Make a conditional job offer, contingent upon the employee's ability to perform the essential functions of the job. While the Americans with Disabilities Act (ADA) does not allow you to ask questions about disability or use medical examinations during the interview process, once you make a conditional job offer, you may ask disability-related questions and conduct medical examinations as long as you do this for everyone in the same job category. The job offer may be withdrawn, if in a medical opinion, the employee poses a direct threat (i.e., a significant risk of substantial harm) to the health and safety of themselves or others (with reasonable accommodation for those employers subject to ADA).
12. After a conditional job offer, drug screening is a very useful technique conducted by many companies not only on new hires but also on current employees. Frequent drug users are a larger liability due to possible theft and injury.
This article is for informational purposes only and should not be construed as providing legal advice. No actions should be in conflict with state and federal laws.
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Workplace culture that discourages drinking gets results
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According to a study published in the May 24, 2007 online edition of Occupational and Environmental Medicine, workplace cultures that discourage drinking make employees less likely to drink heavily both on and off the job. The study included 5,338 workers nested in 137 supervisory workgroups from 16 U.S. worksites. Among the workgroups that most discouraged drinking, 45% of the employees were less likely to be heavy drinkers, 54% less likely to be frequent drinkers and 69% less likely to drink at work than those in the most encouraging groups.
Frequent drinking was defined as drinking any amount of alcohol five or more days a week within the previous 30 days. Heavy drinking for men was defined as having five or more drinks in one day over the past month; for women the definition was four or more drinks in a day.
Workers were considered to drink at work if they reported drinking during the workday or if they had drunk alcohol in the past 30 days two hours before going to work, during lunch or a break, while working, before driving a vehicle on company business, or at a company-sponsored event.
Social norms of drinking were determined by employees' responses to statements relating to drinking with clients, socializing with co-workers over drinks, serving alcohol at company functions, etc. The statements included: Having a drink or two after work to relax; getting together for drinks after work; drinking with clients and customers is good for business; supervisors miss key information if they don't socialize with colleagues over a drink; a drink or two a day is good for a person's health; having a few beers at lunch is a reasonable way to deal with a boring job; the more frequently people are exposed to alcohol, the more likely they are to develop an alcohol problem; serving alcohol at a company social event sets a bad example.
Measures of worksite management tolerance were based on responses by managers to questions about how tolerant the worksite was about drinking in an earlier survey of the same sites.
It behooves a company to assess its workplace environment relating to drinking as alcohol impairment often results in costly injuries, illnesses and diseases.
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