Last week Julie Ferguson blogged the interface between workers comp and recessions. For the most part, the news is good: during tough economic times, the frequency of injuries goes down, as workers hunker down and do their jobs as well and as safely as possible. But there is a big downside to downsizing: lay offs raise the specter of injuries – legitimate or otherwise – that are no longer under the employer’s control.
The most effective tools for managing comp losses are in the hands of the employer: by responding to injured workers in a supportive manner, by securing the best available medical care and by speeding recovery through the prudent use of temporary modified duty, employers are able to keep employees positive and productive throughout the recovery process, all the while holding losses to a minimum.
But after lay offs, the employer tool box is virtually empty. There is no trust – most often, there is no relationship – between employer and former employee. The employer cannot manage the recovery process. The bond between employer and employee – whether it formerly was strong or weak – disappears altogether. Laid-off employees often feel anger toward their former employers and could care less about driving up the cost of insurance. In the context of considerable vulnerability and resentment, employees have to find their own path through the disability maze.
Who Manages, Who Cares?
After a lay off, injured employees are on their own. Where once there were (at least theoretically) two supporting pillars – the employer and the insurer – now there is only one. And where the insurer once relied upon the employer to maintain open lines of communication with the employee during recovery, the communication has been severed. The goal cannot be to return the employee to the prior job, as that job no longer exists. The modified goal is securing a release for full duty from the treating doctor, at which time benefits can be terminated.
After lay offs, employers have relatively little leverage in the recovery process. The burden falls almost exclusively on the (usually overworked) claims adjuster. And there is little incentive for the adjuster to aggressively manage the claims of laid off workers. These claims tend to fall through the cracks in the system, resulting in higher than necessary costs.
So here is a little advice to employers who find themselves laying off workers with (real or alleged) work-related injuries:
1. Aggressively manage any injuries reported at or near the time of lay offs. [For details, contact LynchRyan.]
2. Use the leverage of ongoing benefits to keep lines of communication with laid-off workers open.
3. Once laid off employees report injuries, keep in close contact with the claims adjuster. While you cannot offer return-to-work options, you can actively strategize open claims and ensure that the adjuster keeps these claims on the radar screen. This continued collaboration goes a long way toward reducing the ultimate cost of a claim.
Lay offs are traumatic for everyone, employers and employees alike. The bond of trust – such as it is – has been irretrievably broken. But even with the employer tool box stripped bare, there are still opportunities to keep losses at a reasonable level. The key is quite simple: even though workers are no longer employees, management must continue managing. That might sound like a “duh,” but all too often in the world of business, out of sight means out of mind.