looking at workers’ compensation post-pandemic
Before COVID-19, the workers’ compensation (WC) process was fairly efficient. The pandemic, however, has brought a unique set of challenges to the workers’ compensation industry, including remote and hybrid work models, job elimination, and more.
Let’s chat about workers’ compensation post-pandemic.
what is workers’ compensation?
Workers’ compensation is insurance purchased by employers “that provides cash benefits and/or medical care for workers who are injured or become ill as a direct result of their job.”
According to the U.S. Department of Labor, workers’ comp can provide the following to the injured:
- “Wage replacement benefits
- Medical treatment
- Vocational rehabilitation
- Other benefits”
do all employers need workers’ compensation?
Yes, yes, and yes again.
According to the California Department of Industrial Relations, “all California employers must provide workers’ compensation benefits to their employees under California Labor Code Section 3700. If a business employs one or more employees, then it must satisfy the requirement of the law.”
why is workers’ comp important post-pandemic?
In 2020, employers’ workers’ comp premiums decreased by 10% due to decreased payrolls and fewer claims, according to the National Council on Compensation Insurance.
Fast forward to 2022, however, and things have shifted again. As more employers begin to adopt greater safety in the workplace as well as remote and hybrid work models, workers’ compensation has changed post-pandemic.
Many employers are facing the question of workers’ compensation for their remote employees: Do I need it?
In short – Yes. You need workers’ compensation for ALL employees, no matter where they are working from.
Whereas many remote businesses won’t experience the same ‘on-the-job’ type of workers’ compensation claims, they will likely experience more claims coming from ergonomic concerns (i.e. neck and back pain, finger and hand pain, etc.)
Read on for more information on workers’ compensation in the hybrid workforce.
Workers’ compensation is important for the same reasons pre-pandemic as post-pandemic. Workers’ compensation helps employers avoid hefty out-of-pocket costs in the event an employee is injured.
(PS: When it comes to small businesses, these out-of-pocket costs may be enough to shut operations down entirely—so don’t risk it!)
workers’ compensation costs are on the rise
Workers’ compensation rates have been gradually increasing over recent years.
This increase was bolstered, however, in July 2022, when the Workers’ Compensation Insurance Rating Bureau of California® (WCIRB) submitted its September 1, 2022, pure premium rate filing to the California Department of Insurance (CDI).
The California Department of Insurance helps regulate workers’ comp rates using the WCIRB’s recommendations.
In this 2022 filing, the WCIRB proposed a set of increased premium rates that are, on average, 7.6% higher than those approved the year prior on September 1, 2021. Wow!
Read on for the WCIRB filing.
why are workers’ compensation costs increasing?
Simply put, workers’ compensation rates are rising because there are more claims being filed.
Research shows claims might be increasing because:
- Workforce changes
- Increasing age of the workforce
- Increased indemnity costs, and
- Rising wages
Claims—regarding unsafe working conditions, COVID exposures, and/or workplace accommodations—might also increase as individuals begin to return to in-person work.
what can business owners do to reduce workers’ compensation claims?
Considering the high increase in the cost of workers’ compensation coverage, business owners should do everything possible to reduce claims being filed. As a business owner, you can mitigate workers’ comp claims by:
- Encouraging mental health awareness
- Focusing on risk mitigation
- Conducting proper employee training
- Updating your employee handbook and code of ethics, and
- Maintaining a safe workplace
Interested in learning more about how to reduce the number of workers’ compensation claims that your business faces? Read our article “how to avoid the most common workplace injuries.”