Workers’ Compensation can be a large cost center for a business. The extent depends on the type of business and the state where the business is located. The cost to insure a single employee making $30,000 per year can range from less than $100 (for a clerical worker) to around $1,400 (for a restaurant worker) to more than $10,000 (for a roofing worker). For employers in industries that require dangerous work, limiting Workers’ Comp costs is vital. This article outlines three things you can do.
Regardless of size, all businesses should make every effort insure a safe workplace for their employees. When Congress passed the Occupational Safety and Health Act (OSHA) they made it clear that their intention was to ensure that every working individual in the nation would have healthful and safe working conditions. Nearly all workplaces must comply with OSHA. Hospitals, offices of charities, private schools, labor unions, restaurants, construction companies, law firms, manufacturers and many more types of businesses must follow OSHA’s regulations.
A safety management system is a comprehensive and explicit process for mitigating safety risks. It includes important tasks such as planning performances, measuring success, setting goals and adjusting criteria. It is a formal way of measuring performance and comparing it to planned requirements for success. The main emphasis on the system is improvement, and there are often defined ways to make continual changes until goals have been met. In a recent Journey to Safety Excellence publication, the National Safety Council encouraged organizations across the country to use safety management systems. In the publication, experts highlighted the benefits and some basic concepts of these systems.
Workplace safety isn’t optional. It’s the law. Failure to take steps to ensure a safe workplace for all employees can have immense consequences not just for the workers themselves, but also for the business as an ongoing concern. Failure to enforce workplace safety standards and failure to maintain adequate insurance coverage can mean bankruptcy for small and medium-sized businesses in the event of a serious accident.
Many workers are unclear on the difference between disability insurance coverage and workers compensation insurance. Often, workers will decline optional disability insurance coverage, however badly needed – because they think they are covered under their employer’s workers compensation plan. This is usually a mistake.
The mere mention of a workers’ compensation audit is enough to strike fear in nearly any small business owner. For anyone who is scheduled for an audit, there is no need to worry or be fearful. With a little bit of common sense and preparation, much money and aggravation can be spared.
It is important to devote a few hours to setting up preparations. This small step can prevent days and weeks of hassles in the future. Business owners should plan to give their full attention to the auditor throughout the process, which can take several hours from start to finish. For this reason, it is important to make sure the time and date are both convenient. If the audit has been rescheduled or was not set for an appropriate time, call to reschedule it.
How does safety pay dividends to the small business owner? Time and resources spent on developing a culture of safety repays the business in the long run. Safety cultures rely on reducing the number of workers compensation claims, in return, the odds of a disastrous claim are reduced.
Small business owners with workers’ compensation experience modifications above 1.25 need to review their safety policies with professionals. It is possible one year or even one claim causes this situation; but it should not be ignored. Discover and repair the root cause.