Business owners often assume that buying insurance is the extent of their workers’ compensation obligations, but that’s just the beginning of what they must do. In workers’ comp claims, employers’ responsibilities include several state-mandated actions they must perform. Many of these steps, however, have the added benefit of protecting their businesses.
Employer Responsibilities Before a Workers’ Comp Claim
Getting workers’ compensation insurance is an essential part of protecting your business, but it’s not your only responsibility to your employees. Some of the most important actions you can take come before there’s an incident at your business. These steps can reduce the likelihood of your employees suffering injuries while also making sure you’re prepared if they do.
Maintain a Safe Workplace
Keeping employees safe is simply a workers’ compensation insurance best practice for employers, but it’s also a legal obligation. Federal law requires employers to provide a workplace that’s free of safety hazards, and that complies with standards created by the Occupational Safety and Health Association (OSHA). Some of the components of that safe workplace include:
- Regularly examining conditions to make sure they comply with OSHA standards
- Providing and maintaining safe tools and equipment
- Ensuring employees use the appropriate tools, equipment, and safety gear
- Warning employees of potential hazards
- Establishing operating procedures and training employees in them
While this isn’t strictly a workers’ compensation requirement, it’s important enough to include in this list. First and foremost, nobody wants to see their employees hurt on the job. Moreover, willful and repeated violations can result in fines between $5,000 and $70,000 for each act.
Know Your State Requirements
Workers’ compensation insurance is governed at the state level. Check your state’s workers’ comp regulations. These requirements not only dictate when you must get coverage, they also usually list obligations for communicating with your employees and steps you must take if an employee is injured or reports a diagnosis for an occupational disease. Depending on your state, these might include:
- Posting workers’ compensation notices: Nearly every state requires business owners to hang officials posters explaining workers’ rights and responsibilities in workers’ comp claims.
- Reporting the injury to the state: Your states may require you to file injury reports with its workers’ comp board; others simply ask you to provide the necessary form, often called a First Report of Injury, to the injured employee. In both cases, you want to do this quickly because almost every state has a deadline for reporting that impacts workers’ comp benefits.
- Providing contact information for approved doctors: You may be required to have a list of approved physicians to hand to a worker after an injury. Providing immediate first aid and sending an injured worker to the emergency room takes precedence.
- Maintaining workers’ comp claim records: Some states mandate employers keep files on workers’ compensation claims for years after they’re filed. Wisconsin, for example, recommends keeping those files for up to 12 years.
One final note: Employers are prohibited from retaliating against employees who file workers’ comp claims. If an injured worker believes he’s been punished, terminated, or discriminated against, he can sue in most states. Moreover, he doesn’t have to prove that his injury was the sole reason he was punished; he usually only has to show that it was a significant factor.
Train Your Employees
Once you understand your responsibilities in workers’ comp claims, you want to make sure your employees know what to do too. You want to make sure they know what steps to take if you’re not available, such as:
- Preventing accidents by following safety procedures
- Reporting violations of safety procedures
- Providing immediate first aid when appropriate
- Reporting injuries to you, a supervisor, or human resources (HR) representative
The specific steps you want your employees to take should also be written down in an employee handbook or procedure manual.
Employer Responsibilities During a Workers’ Comp Claim
One of the reasons it’s essential to take steps before you face a workers’ comp claim is because you want everything ready to go should an employee suffer an accident. That way, you know what steps to take and forms to hand out in what may be a stressful situation.
Provide Immediate Medical Care
Giving first aid to an injured employee is probably instinct but, just in case federal law requires employers to have either an infirmary, clinic, or hospital in “near proximity to the workplace.” If that isn’t feasible, then employers must train someone at the workplace in first aid. Even with that mandate, many states list providing immediate care as one of the employer’s responsibilities.
Please note: If you live in a state where employees have to go to specific physicians for work-related injuries, deal with the emergency first.
Report Injury or Illness to Your Insurer
In addition to submitting a report to your state board, or at least assisting your employee with that, you also need to let your insurance carrier know there’s been an accident. Some states require you to alert your carrier and then require the carrier to report the incident to the workers’ comp board.
Either way, it’s a good idea to report even minor accidents to your insurer. Injuries that seem like no big deal can get worse over time, plus prompt reporting makes it easier for your insurer’s claims adjuster to investigate the incident. For these reasons, many workers’ compensation policies require immediate reporting.
Cooperate With Investigators
After you file a workers’ comp claim, your insurer will most likely send a claims adjuster to investigate the incident, sometimes within 24 hours. The terms of your policy include cooperating with the adjuster, who may ask for the injured worker’s:
- Personnel file
- Payroll history
The adjuster will probably want to interview people who were at the scene as well as review your copy of the incident report.
The flip side of this is that your employee’s attorney may contact you. People usually have one of two reactions to this. They either get mad and retaliate by punishing the employee, or they want to be helpful and comply with requests. Neither is the appropriate response. Instead, direct the attorney to speak with your insurance carrier and tell your carrier or its lawyer about the conversation.
Report Any Suspected Fraud
Workers’ compensation fraud is a million-dollar industry in the United States, and every employer feels the impact as insurers raise their rates to compensate for their losses. To help reduce the effect, states typically require employers to report cases of suspected fraud.
Red flags for workers’ compensation fraud include:
- Conflicting stories: Eyewitnesses may not see an event the same way, but if stories don’t seem to line up, you may want to do some more digging.
- No witnesses: Injuries can happen when no one is around, but it’s worth asking a few more questions to make sure the employee is telling the truth.
- Slow reporting: Be suspicious of injuries that supposedly happened on a Friday afternoon but aren’t reported until Monday morning. It may be a sign that the employee either suffered the injury somewhere other than work or spent the weekend plotting his scheme.
- Sketchy histories: Take a second look at an employee who has made previous workers’ comp claims as well as any who may be facing termination.
- Difficult-to-contact employees: If a worker is supposed to be recuperating at home, but you can’t get a hold of him, you may have a scammer on your hands.
Each state has its own method for handling reports of workers’ compensation fraud. You can start by going to your state’s workers’ compensation board’s website. It should have directions for reporting fraudulent claims.
Check In With Your Employee
While regular communication with your injured employee isn’t a legal obligation, it may be a good idea for your business. At the very least, you want the employee to know:
- You filed the appropriate paperwork
- Any steps she needs to take with the state
- When she can expect to hear about wage replacement from your insurer
- You’re concerned about her well-being
You want to keep up on her progress so that you know when she might return to work and what accommodations she might need so you can prepare.
Keeping the lines of communication open can have a positive impact on the employer-employee relationship and reduce the likelihood of hurt feelings that lead to lawsuits. However, if your employee has already hired an attorney, you may want to check with your carrier’s attorney before you contact your employee.
Create a Return-to-Work Plan
Nearly every state requires employers to give employees who are recuperating from a work injury a chance to return. Often, that starts with offering light-duty tasks, such as taking inventory, supervising job sites, or monitoring surveillance cameras. Other options may be modifying their duties or workspace to fit their changed abilities. For instance, you may limit heavy lifting or provide ergonomic office furniture to make sure they can complete their work.
Getting injured employees back to work is incredibly important for small businesses. Imagine the cost of recruiting, hiring, and training someone to replace them. That cost doesn’t even take into consideration the knowledge and skill you lose if they don’t come back.
Workers’ comp employer obligations go well beyond purchasing coverage. It’s on you to keep employees safe, get injured workers the necessary information, and help them return to work as soon as possible. Doing this is not only good for company morale, but it also protects your business from fines and lawsuits.