RC 381581 Principles of Occupational SafetyLoss Control

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RC 381/581Principles of Occupational Safety/Loss
Control

• Worker Compensation

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Worker Compensation - History

• Common Law
• Used during the Industrial Revolution era
• Employer not usually responsible for injuries
• Employer allowed to use various defenses
• Fellow Servant rule
• Contributory negligence
• Assumption of risk

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Worker Compensation - History

• Common Law Summary
• Was slow, costly, and ineffective
• Tended to be harsh on workers
• Failed to meet social expectations and eventually
  became the focus of public outcry

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Employer Liability Laws - Early 1900s

• Common Law defenses were modified
• Injured employee could receive compensation
• Still required injured worker to prove negligence
• 1911 - first major worker comp law passed
• Employee provided benefits w/o proving negligence
• Employee forfeited right to sue employer
• Employer required to pay medical costs
• Employer couldnt use common law defenses

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Objectives of Current Worker Compensations Laws

• Provide prompt and reasonable income medical
  benefits to employees or to their dependents,
  regardless of fault
• Serve as a single remedy
• Encourage maximum employer interest in worker
  protection through an experience rating system
• Promote the study of accident causation
  implementation of effective controls

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Coverage of Current Worker Compensation Laws

• Personal injuries caused by accidents/ illness
  arising out of or in the course of employment
• Two major types of Laws
• Mandatory laws - state oriented
• Elective laws - can allow an employer a choice of
  being covered by workers compensation

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Who is Covered Under Worker Compensation

• Worker compensation applies to the
  employer/employee relationship
• Most workers are covered under worker
  compensation or some similar program

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Worker Compensation Laws Impact on Employers

• Created sole/single remedy
• Employer must assume cost of work-related
  disabilities - regardless of who is fault
• Employer is generally protected from being sued
  for work-related injury or illness

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Worker Compensation Laws Impact on Employees

• Generally removes the employees right to sue the
  employer
• Creates a schedule of benefits for the injured
  individual or his/her dependents

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Basic Benefits and Coverage

• Indemnity
• Supplements loss of wages
• Provides 2/3 of gross pay when off work
• Not to exceed the states average salary
• Requires a three-day waiting period
• Indexed for inflation

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Basic Benefits and Coverage (cont.)

• Medical Care
• Unlimited
• No deductible
• Miscellaneous
• Mileage
• Rehabilitation
• Retraining

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Types of Bodily Harm Covered Under Worker
Compensation

• Injury or illness
• Mental stress - allowed in some states (subject
  to interpretation)
• Permanent disability

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Worker Compensation Disability Classification
System

• Permanent Total Disability
• Person is permanently totally disabled
• Permanent Partial Disability
• Scheduled benefits - generally based on the loss
  of a body part
• Non-scheduled benefits - based on a percentage of
  the function lost
• Strength
• Range of motion
• Loss of memory

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Worker Compensation Disability Classification
System (cont.)

• Temporary Total Disability
• Employee is temporarily unable to work
• Most commonly used disability classification
• Back injury is the most frequent TTD
• Temporary Partial Disability
• Often referred to as restricted duty
• Fatality - provisions for survivor benefits

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Exceptions to Worker Compensation

• Wisconsin
• Domestic servants and volunteers
• Minnesota
• Certain casual Labor
• Household help earning lt 1000/quarter
• Family farms with payroll lt 8000/year
• Railroad workers covered under Federal- based
  worker compensation programs

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Other Provisions of the Law

• Third party Liability
• Employees may attempt to recover from negligent
  third party.
• Subrogation
• Employers may attempt to recover from a negligent
  third party.

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STANDARD PREMIUM

• What you actually pay in a worker compensation
  premium
• Calculated using the following formula
• Manual Premium
• X
• Experience Modifier

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MANUAL PREMIUM

• Manual Rate x Number of 100
• Payroll Units
• The Manual Rate a state-based rate for different
  job classifications

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Experience Modifier (EM)

• EM 3-year avg. of firms actual losses
• industry avg. of expected losses
• 1.0 indicates average performance
• gt 1.0 indicates poor performance
• lt 1.0 indicates favorable performance

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EXPERIENCE MODIFIER

• Compares a firms actual losses with the losses
  that a company of similar size in the same
  industry business might be expected to have.
• Is calculated using a three year average of the
  firms actual losses

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1999 Wisconsin SIC Codes Corresponding Manual
Rates
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Sample W.C. Premuim Calculation - ABC Contracting
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Manual Premium CalculationABC Contracting
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Standard Premium Calculation - ABC Contracting
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Additional Sales Required to Cover
Accident-Related Losses
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5 Year Worker Comp Cost(in billions of )
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Basic Methods of Controlling Worker Compensation
Cost

• Effective on-site risk control systems
• Job analysis
• Employee selection and training
• Job design/ergonomics
• Selection/use of personal protective equipment
• Hazard identification and abatement
• Emergency notification and response
• Fall protection
• Fire protection and prevention
• Hazardous energy identification and control

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Basic Methods of Controlling Worker Compensation
Cost (cont.)

• Cooperative attitude between employer, worker,
  union, and health care provider
• Prompt treatment of work-related injuries/
  illnesses
• Effective rehabilitation and return-to-work
  systems
• Efficient administration of medical, indemnity,
  and disability-related payments