There are
several ways to hold down your industrial insurance costs. They include but are
not limited to:
·
Effective Safety Program and Accident Prevention
·
Pre-employment Physicals
·
Proper industrial insurance classification
·
Reporting salaried employees' hours
·
Managing all industrial insurance claims and
assisting injured workers to return to work.
Implementing good safety practices and
accident prevention are critical to reducing your state industrial insurance
costs. Most safety and accident
prevention actions are common sense.
But it is critical for management of your company to stress safety and
accident prevention to your employees.
Every firm with employees is required to hold safety meeting monthly and
more often when the job site changes like in construction. Written minutes of those safety meetings are
required to be kept. Use these meetings
as an important time to reduce your industrial insurance costs by truly
focusing on safety and accident prevention.
Develop a safety manual for your company and provide a copy to every
employee. You can get help for FREE
from the WA Department of Labor and Industries in preparing your manual. Click here
to go to IBA Document 2701 – Free Safety and Health Consulting Services. You also need keep your eyes open to safety
violations and discipline employees who fail to follow the company’s safety
program to have an effective safety program.
IBA has many examples of where firms have implemented effective safety
programs and have reduced their industrial insurance rates dramatically.
Pre Employment Physicals
Pre-employment physicals are somewhat
controversial and they must be used correctly or you as an employer can face
serious problems. Why do pre-employment
physicals? Because under state
industrial insurance laws, your company’s industrial insurance experience
rating becomes charged for any workplace injury or disease that an employee may
suffer as a result of working for you. If
you hire an employee that has an existing condition that results in an injury
while working for you, your company’s industrial insurance experience rating account
is charged for that claim, regardless of the fact that the employee had the
condition prior to working for you. If
your jobs are physically demanding and your past claim history has been high,
pre-employment physicals are something to consider doing. NOTE: Before engaging in pre-employment physicals,
seek the legal advice of a qualified attorney.
The information presented here is only designed to alert you to major
issues related to pre-employment physicals and is not intended to
assure compliance with the laws and regulations affecting pre-employment
physicals.
Under state and federal discrimination laws,
you cannot require a job applicant to take a pre-employment physical before you
have offered him/her a job. And, if you
would require a pre-employment physical for any applicant, you must require it
of any applicant you offer the job to so you do not discriminate between
applicants. Next, you must have a
detailed set of job requirements that can be translated into specific physical
activities such as lifting, squatting, hammering, etc. The physician giving the physical is to
determine if the person has existing conditions that would restrict or prohibit
performing any of those physical activities.
If so, as an employer you must consider if there are “reasonable
accommodations” you can provide to enable the employee to perform the job
activity with their given limitations.
Part of “reasonable accommodation” is the issue of an “undue hardship” on
your business. You do not need to offer
a reasonable accommodation that is an “undue hardship” for your business but
there is a great deal of law that involves what really is “undue hardship.” Remember; consult a qualified attorney
before you start engaging in pre-employment physicals.
Proper
Industrial Insurance Classification
There
are three considerations here:
First:
Are your employees in the correct classification? Quite often the explanation
of the classification on the industrial insurance form is completely different
than the actual work your employees perform.
There are 261 Occupational Classifications and it is possible your employees
are not in the correct one. If you would like the IBA to verify this please
call our office at (206) 453-8621 or 1-800-562-9989. If it appears your
employees are in the wrong classification, we will explain how you can attempt
to get them reclassified.
Second:
The splitting of classifications for employees. Certain employees can be
"split rated" meaning they are charged a different industrial
insurance rate than other employees of the business. The employees that can be
“split rated” are those employees in the following occupations:
Clerical, draftsmen, outside sales people,
security guards, janitors, log truck drivers.
Example: A machine shop has a separated office from
the machine shop itself. The employees in the machine shop are classified under
34-2, while the bookkeeper and other office personnel are classified under
49-4.
Third:
The possibility that a single employee may have his/her work activities
reported under two different industrial insurance classifications. This is
quite rare, but does it does apply in some situations. For these rare
circumstances to apply to a single employee, the following conditions must
apply:
1. Separate
time cards or book entries must be kept for the different types of work
performed by the employee at the different occupations, and
2. The different work activities must be performed in
physically different locations, and
3. You CANNOT separate the work activities of the following
classifications -
clerical, sales personnel, executive officers and any partner
or proprietor.
The following examples illustrate this rule:
Example 1 An employee of an
insulation glass business works in the shop to custom make the glass and
installs it in the field. In this situation you can divide the hours for
industrial insurance between the two classifications.
Example 2 A clerical employee who has a desk in the “work area” of a machine shop and spends all the time doing clerical work there, is classified in the riskier machine shop category since the work area is NOT separated from the machine shop. If there is a separated office, then the work would be reported as clerical.
These are just two examples and the Department of Labor and Industries will look to each situation individually. Please call the IBA office if you would like a clarification for your business or would like to request a reclassification.
Salaried employees no longer have to be reported at 40 hours a week or at 160 hours a month. You can now report hours based on actual hours worked if you keep adequate time records. If you choose this method of reporting you must do this for ALL salaried employees. You cannot report partners, proprietors, or corporate officers based on actual hours worked. They must still use 40 hours a week or 160 hours a month. If you fail to keep good clear records of actual hours worked for salaried employees and you are audited you could have to pay the difference in premiums to equal the 40 hours per week.
Effectively Managing A State Industrial Insurance Claim
For information about effectively
managing a state industrial insurance claim, review IBA Profit Report
2304. Click here to IBA Profit Report 2304.