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Workers' Compensation MGMT 4030 Managing Employee Reward Systems

Workers' Compensation MGMT 4030 Managing Employee Reward Systems

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Page 1: Workers' Compensation MGMT 4030 Managing Employee Reward Systems

Workers' Compensation

MGMT 4030 Managing Employee Reward Systems

Page 2: Workers' Compensation MGMT 4030 Managing Employee Reward Systems

Workers’ Compensation: Purpose

Financial Assistance to Employees with Job-Related Injuries

Based on “No Fault” Concept Worker that Accepts WC Cannot Sue

Employer Employer Provides WC Coverage Average WC Insurance Rate = 1% of Payroll

Costs Dangerous Jobs Pay Higher Rates - up to 30%

of payroll. Ex. WC for roofing employees

Page 3: Workers' Compensation MGMT 4030 Managing Employee Reward Systems

Experience Rating for WC: Cost Control Factors Risk Factors (Based on Occupation)

– Construction (high risk); but professor (low risk)

Frequency of Accidents in the Company– May vary depending on company accident

history WC Payout Schedule Varies by State

– Ex. Lose one eye in Colorado, receive $20K, but in Wyoming only $10K

Page 4: Workers' Compensation MGMT 4030 Managing Employee Reward Systems

Workers’ Compensation: Benefits

Covers All Medical Expenses From First Dollar On– Note: Regular Health insurance requires a co-

payment and possible deductible before benefits available.

Provides Replacement Income While Worker is Disabled - more generous than Soc. Sec. LTD– Total or partial disability payments.

Covers Rehabilitation Expenses Provides Income to Survivors of Deceased

Worker - Again, more generous than Soc. Sec.

Page 5: Workers' Compensation MGMT 4030 Managing Employee Reward Systems

Managing WC Costs

Safety Programs Can Lower Accident Rates Comply with OSHA Safety Standards

– Awareness of hazards, proper use of equipment and ergonomics of using computer.

Redesign Jobs with Risks of Repetitive Motion Injuries

Audit WC Claims and Challenge Fraudulent Claims - There are perverse incentives for fraud.

Encourage Disabled Workers to Return to Work on Redesigned Jobs