Safety: Controlling Insurance Costs

March 1, 2011
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Katie Schofield is a loss-control consultant for more than 200 construction companies at The Builders Group (TBG) of Minnesota, a self-insured workers’ compensation fund. TBG was founded more than 10 years ago to provide a long-term, stable workers’ compensation program for the construction industry of Minnesota at the lowest possible net cost to each member. TBG has more than 1,000 members who pay in excess of $40 million in annual premiums.

Workers’ compensation laws vary from state to state, so someone at your company needs to understand your state’s statutes. The amount of time that a worker on temporary total disability can be off work varies; maximum workers’ comp benefits vary. Every state has a gradient rating system for each part of the body that is permanently or partially disabled. The rating varies depending on a person’s age, potential earning ability, and the severity of the injury. The website of your state’s department of labor is a good place to learn more.

Some states, such as Minnesota and Illinois, have round-the-clock coverage for out-of-town workers, says Schofield. So if you send a crew out of town for two weeks and they go out for drinks and dinner, someone may trip and sprain an ankle on the way back to the hotel. That may become a workers’ comp claim.

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You need to know your state’s law regarding independent contractors. If you sub a job out to someone, is that person covered by your workers’ comp insurance? In Minnesota the line between independent contractor and employee has been blurred, and cases are still going through the courts.  “Each person in each state needs to look at what their state requires to make sure that the person you hired as a subcontractor may stay as your subcontractor and not get deemed to be an employee if they get hurt on your job,” says Schofield.

Screening New Hires
“We feel that if you do a better job of screening potential applicants and get the right employee, it will not only help you in a business sense, it is probably going to reduce your likelihood of injuries and claims,” says Schofield. Whether you’re a union or non-union contractor, you can still screen potential employees, because once you hire them, you’ve hired all of their physical limitations as well.

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It’s best to do personal interviews before hiring someone. “Don’t just talk to a man over the phone and send him out to the job site,” says Schofield. “Have him come in and talk to whoever is doing the hiring. Maybe it is an office person doing the hiring, and the prospect should also talk to their supervisor or foreman. Make sure everyone is confident in this person’s skills and personality.”

Schofield recommends using formal, written job descriptions. They should detail all of the essential physical demands of the job such as kneeling, lifting, hands above the shoulder 25% of the day, and so forth. In Minnesota, if the employer provides a written job description, it is the applicant’s responsibility to read it and ask for reasonable accommodations, if necessary.

“Legally, you are not supposed to ask someone if they had a past workers’ comp injury,” Schofield says. “You have to let the job description ask that for you. If the person needs a reasonable accommodation, to abide by Americans with Disabilities Act (ADA), Equal Employment Opportunity, state statutes and human rights laws, you try to provide a reasonable accommodation. If this accommodation would cause an undue hardship for the employer, you can exclude them from your hiring pool.

An example of a reasonable accommodation would be if someone with vertigo must stay on the ground, and not work at heights, you keep them on the ground. “Reasonable” can usually be defined and is economically feasible for your business practice. Or your job description may require the person to lift 85 pounds 75% of the time. If the person can only lift 50 pounds, that is a pretty reasonable accommodation.

Once you have narrowed down your hiring pool to two or three people, you can give your leading prospect(s) a conditional offer of employment. The offer is conditional upon passing a physical exam and a drug test.

Schofield recommends that a doctor or clinic give fairly intense pre-employment physical exams to prospective employees. Give the doctor your job description so they know what the individual is going to do for the company. A doctor in an occupational medicine role will usually test the prospect for range of motion, joint stability, and the like. The doctor will tell you if the person can handle a heavy-duty job, or a medium duty job, or a light duty job.

“Sometimes people will say this is discriminatory, but most of the time people pass these physicals,” says Schofield. “And the physical is actually a benefit, because a doctor of occupational medicine can give the person exercises to do, if needed. This is a non-discriminatory third party giving them range of motion tests and strength tests of their joints.”

The doctor may tell the employer that they are putting the person at risk because the prospect cannot do the job. In that case you tell the prospect that he or she did not pass the physical and the offer is withdrawn.