When an injured worker is laid off or has their hours reduced because of a production slowdown, you may experience unexpected workers’ compensation issues that could have been avoided with advanced planning. Here are some practical considerations to keep in mind if you must take the unfortunate step of reducing hours or headcount:
- Eligibility for monetary payments: Injured workers may be eligible for workers’ comp benefits in the form of monetary payments if they are laid off (time loss) or experience a reduction in work hours (loss of earning power, or “LEP”). As you are evaluating which employees to select for layoff or reduced hours, be sure to factor in the potential cost of time loss or LEP benefits to employees with open workers’ comp claims.
- Provide valid light duty work: Exploring light duty work options becomes important during times of slowdown. This involves identifying tasks that injured employees can perform within their physical limitations. It may be difficult to find or create light duty work for an injured employee during a slowdown, but it is your best tool for keeping claims cost to a minimum. Clear communication and collaboration between the employer and the injured worker are crucial to successfully implementing a light duty return to work. Be sure you are providing a valid light duty job offer to reduce the time loss claim (see our previous newsletter article on this topic).
- Strain on peers: Some employees may feel resentful that the injured worker retained their job or is receiving “special treatment” by being given a light duty assignment. This strain becomes even more apparent in times of slowdown when workloads may remain the same or increase, while hours are reduced. It’s important to foster a culture of empathy and understanding, emphasizing the important role that everyone plays when you’re working with a reduced workforce. Be mindful of how other employees are treating the injured worker and ensure there is no retaliation taking place.
- Risk of injury: As businesses deal with staffing shortages, remaining employees may find themselves working faster and under increased pressure to meet demand. This elevated pace can lead to a higher risk of injuries due to stress, fatigue, or lapses in concentration. These risks apply to both the injured worker and fellow workers, potentially causing delayed healing or new injury claims. Make your supervisors aware of these risks and instruct them to give regular breaks, provide adequate training, and monitor workload distribution.
- Wage replacement: It’s important to thoroughly review the compensation paid to an injured worker. Even during slow periods where workers may not be earning additional income through overtime and bonuses, the workers’ compensation (or kept on salary payment) must include all potential earnings at the time of injury. If their reduced hours lead to less compensation, then they may receive LEP time loss payments.
Tips: If you use Vigilant’s Washington workers’ compensation Retro or claims management services and know in advance that your company will be implementing a layoff or reduction in hours, you should consult with your assigned Vigilant claims manager ahead of time. We can be proactive and help get you in the best position possible to reduce time loss exposure. A layoff can also pose numerous legal risks; consult with your assigned Vigilant Law Group employment attorney to ensure you’ve considered all the angles.
If you aren’t working with us for your workers’ comp needs, explore the benefits of doing so today.
