Bar News - August 19, 2015
Workers’ Compensation & Personal Injury: Beyond the Numbers: Controlling Workers Compensation Costs
By: Lynn Preston
When a business encounters a rise in workers compensation costs, the immediate response often focuses on loss control, reducing spending and overall insurance costs. However, given the continued annual rise in insurance premiums, and the fact that New Hampshire has been identified as one of the most expensive states for workers compensation coverage in the country (according to a recent article in the Insurance Journal), such cost saving attempts are likely only temporary.
The real key to reducing workers compensation costs is loss prevention – preventing the work-related injuries and illnesses from occurring in the first place. Making workplace safety an overall company priority can not only keep employers compliant with regulatory requirements and improve productivity and efficiency, but also often results in reducing workers compensation costs. The following are some tips for preventing work-related injuries and illnesses in an effort to reduce overall workers compensation costs.
Performing post-incident investigations (investigation of an incident where an employee is hurt or where there is a near miss or close call), allows the employer to identify existing workplace hazards, institute corrective actions, and ultimately prevent future incidents. The post-incident investigation can be used as a tool for identifying the root cause of hazards and for formulating appropriate corrective actions.
Tips for Conducting Post-Incident Investigations
Have a plan in place prior to an incident. Preparation is important to provide for the most effective investigation. The plan need not be extensive, but should meet the overall objective – get to the root cause of the incident and provide corrective actions.
The plan should identify the investigation team. Teams usually include, where available, the area supervisor, safety and health person, and the safety committee.
The team’s charge is to find the facts surrounding the incident: who, what, when, where, why, and how. The purpose of the post-incident investigation is not to attribute blame for the incident, but to obtain information to prevent further incidents.
The plan should describe the categories of incidents that will be investigated (e.g., serious, all recordable, first aid, near misses, etc.)
In severe incidents, like fatalities, senior management should ensure legal counsel is involved. Legal counsel can assist in attempting to ensure the resulting documented investigation and additional materials (photos, etc.) are, to the extent they can be, protected from disclosure to OSHA. Where not protected, such documents can provide potential admissions of liability that could ultimately be used by OSHA in support of the issuance of willful citations. Thus, plans should include the notification by appropriate personnel to in-house or outside counsel prior to an investigation into a serious incident to direct the investigation.
The plan should entail how interviews with those having knowledge about the incident will be performed – including, if possible, the involved worker.
The investigation may identify several contributing causes for the incident. The team needs to be prepared to suggest appropriate corrective actions for any and all causes.
The plan must also include a system for corrective action, monitoring and follow-up, as such actions can reinforce an awareness of workplace hazards. Where identified and documented corrective actions are needed, the employer must ensure there is a process to monitor areas of deficiency or non-compliance and document resolutions and close-outs.
The team needs to be trained on the company plan. The team should understand the investigative process, objectives and how to properly document investigation findings.
Prepare a Safety Management Program
Employers should also prepare a safety management program. Such a program incorporates the specific policies and practices the business will use to address workplace safety regulatory requirements and identify how the company will reduce employee exposure to workplace hazards.
Some states, including New Hampshire, require certain employers prepare and maintain a written safety program. Legal counsel should be consulted to ensure other workplace safety regulatory requirements are identified. At a minimum, the safety program should include:
- What the business is doing to identify workplace hazards;
- What the business is doing to prevent injuries and illnesses;
- What the roles and responsibilities of management are with regard to safety;
- How employees are being properly trained to the safety program and requirements;
- How employees are involved in the workplace safety process;
- How the business performs and maintains its recordkeeping requirements;
- How the business will ensure compliance with the safety program (disciplinary actions for noncompliance); and
- How the safety program will identify shortcomings and continuously improve (e.g., auditing of safety system.) Legal counsel should be consulted to identify the possibility of audit and document privilege protections.
The Occupational Safety and Health Administration’s (OSHA’s) website provides a free online "Sample Safety and Health Program for Small Business." The NH Department of Labor’s website provides a "Guide for Developing a Written Safety Program."
Given that New Hampshire is one of the most expensive states for workers’ compensation coverage in the country, minimizing exposure is essential.
Consequently, beyond the traditional loss-control measures, companies are encouraged to consider integration of the above workplace safety tips into daily operations to assist in reducing workplace injuries and illnesses – and ultimately workers compensation costs.
However, employers must be cautioned that to be effective, integration of the above measures involves an overall change in business culture and support of continuous improvement practices. If successful, cost reductions can be substantial and, thus, well worth the effort.
Lynn Preston is an attorney at Sheehan Phinney Bass + Green, where she practices in environmental compliance, regulatory issues and corporate transactional matters. She can be reached by email or at (603) 668-0300.