Any business that has witnessed their Workers' Compensation rates creeping up over the years, certainly understands that claims are the culprit behind policy increases.
The average claim amount continues to rise along with the cost of health care, and diagnostic testing. As employers sustain these continued increases it becomes more difficult for an organization to realize a profit. In some areas of the balance sheet, there may be little that can be done to reduce costs and increase profits. As a result, the employer must pass the additional costs on to the consumer and hopefully remain competitive.
In this circumstance, the best way to turn a larger profit is to strategically manage your Workers' Compensation policy.
Claim Reduction = Lower Rates
As we know, most states control workers' compensation rates, which are set according to the class of business. When a business knows their costs of workers' compensation in advance, they can set their prices for services and products accordingly. But when they experience claims during the year they are subject to rate increases resulting from claims that are filed. Knowing this, the employer's best defense will always be a great offense, and that can be accomplished by implementing Physical Abilities Testing (PAT).
1. Pre-Employment Tests - It makes sense that a worker who may not be physically capable of performing basic job responsibilities is more likely to experience “on-the-job injuries” than a worker who is physically capable. Implementing a pre-hire physical abilities test can help the employer make certain that the prospective employee is physically capable of completing the physical tasks associated with the position. The test should be based on the specific tasks related to the job and be administered after a conditional employment offer has been made. If the employee fails this portion of the PAT, the employment offer can be rescinded.
2. Pre-Transfer Testing - Just because an employee can easily lift 50 pounds doesn't necessarily mean that they can also regularly walk 300 yards from one end of a warehouse to another. Employees that are being considered for transfer to another job with different physical demands should also be tested for physical abilities specific to the new tasks required following the transfer.
3. Re-Testing - Physical abilities can change over time, especially for employees that have aged or put on weight during their employment. In order to make certain that current employees remain physically able to complete employment-related tasks, re-testing over time will ensure that your employees will remain fit for the tasks they're expected to perform.
4. Tests due to Reasonable Suspicion - Employees returning from leave due to health reasons may not be as physically fit as they claim. A reasonable suspicion should lead to physical testing to make certain they are still physically able to complete work-related physical tasks. An employer owes it to the employee to make certain they are physically able to safely perform their duties. PAT testing will allow both parties to confirm this and can also protect other workers in the workplace.
5. Post Injury Testing - Post injury testing of employees returning from work after an injury will help promote safety in the workplace. The testing will take the guessing out of the return to work decisions and enable the employer to devise a return to work plan if needed.
A well-designed and implemented physical abilities testing program that is used consistently in the workplace can reduce workers' compensation claims resulting in stable rates year after year. Physical Abilities Testing (PAT) is a proven and cost-effective strategy for improving a company’s ROI. If you have questions about workers compensation contact Skyline Risk Management, Inc. at (718) 267-6600 to discuss your concerns.