When an employee is injured in the workplace, most employers are focused on the costs of the claim, medical bills, lost time, and potential legal fees. In addition to a potential increase in Bureau of Workers’ Compensation (BWC) premiums, workplace accidents also lead to a number of other indirect costs that a company may not consider. To get a better handle on your workers’ compensation overhead, it’s important to work with a third-party administrator who can provide access to valuable savings programs and help you understand the indirect costs of workers’ comp claims.
Pay not covered by workers’ compensation
Did you know that the BWC doesn’t pay lost time claims unless an injured worker misses 8 or more days of work? And they’re only compensated for their entire disability period if they miss 14 days or more?
For injured workers missing fewer than 8 days of work, the employer may be responsible for compensating any paid time off or sick days used during this time. The indirect costs of an absence can quickly pile up for a company – especially when you combine the salary lost during time off with the potential need for other employees or temps to work to fill in the gaps. In addition to the indirect salary costs of workers’ comp claims, read Most Common BWC Benefits to learn more about the direct costs of the most common benefit types awarded by the Ohio BWC.
Wage costs during stoppage
When an employee is injured, the whole workplace can quickly grind to a halt. Whether they played a crucial role on the production line, employees are rushing to give aid to the injured worker, or equipment was damaged, the injury of one employee can lead to work stoppage and lost production throughout the facility.
The nature and severity of an injury can have a significant impact on the amount of time lost. For example, a slip or trip in a walkway may only involve one or two employees and result in very little overall downtime. However, a more serious injury, such as an employee falling at a construction site, may lead to greater downtime.
No matter how long the interruption, these costs can quickly add up. If a piece of equipment is down for several hours after an accident, the company is still required to pay the employees who are in the workplace. Additionally, when the equipment is back up and running, the workforce will still be down an employee, meaning that the employer may be forced to ask (and pay) the remaining employees to work overtime to make up for the lost production.
Investigation and safety assurance
Whenever an employee is injured in the workplace, it should trigger an investigation into the cause of the accident and how similar incidents can be avoided in the future. In the wake of a workplace injury, human resources, safety team members, supervisors, and administrators must devote time and effort to ensuring that the remainder of the team is safe and that the cause of the accident is addressed. The more serious the injury, the longer the investigation into the accident, though even minor accidents can take significant time and effort to ensure that their causes are addressed correctly.
Finding a replacement
The tasks that would have been performed by the injured worker still need to be completed. Depending on the amount of work needed to be completed and current staffing levels, most companies elect to either spread the work out among remaining staff or bring in temporary workers.
While utilizing current staff may seem like the preferred option, this often means paying overtime costs to workers so they can finish both their tasks and those of the injured worker. Additionally, these employees may not be as efficient or knowledgeable about performing the duties of the injured worker. Meanwhile, bringing in temporary workers can mean paying an additional salary, as well as the costs associated with onboarding and training the new worker. Either way, companies can expect to invest a significant amount of time and money in finding employees to cover the injured worker’s tasks.
Advocating for you
When it comes to helping you save money on both the direct and indirect costs of your workers’ comp insurance, a TPA is an invaluable partner. Not only can your TPA help identify and give you access to savings opportunities, but the expertise they offer can also lead to reduced risk and lower costs for your company. Partnering with a TPA is an investment in your business’s future that can create a safer workplace for your employees and lead to lower premiums for your business.
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