Workers’ comp: 3 things you aren’t doing that could hurt you

shutterstock_workerscompBy law, your agency — not your clients — is charged with providing a safe work environment for your temporary employees. This means ensuring they have the right equipment and training to do their jobs safely, and providing workers’ compensation coverage to protect them in the event of injury or disability.

 

Failure to provide workers’ comp coverage can result in costly penalties for your business. Yet deliberate negligence is rarely what gets staffing agencies into trouble, as state and federal laws clearly spell out the minimum coverage you need to provide.

 

However, doing the minimum often leads to back-office errors and poor recordkeeping — mistakes that cost employers a lot of money. Here are three mistakes you may be making with your workers’ compensation program that could be costing you money.

 

The mistake: You don’t screen temporary employees.

Screening temporary employees may seem to be an unnecessary and added cost, especially when you are regularly adding and turning over staff. But it’s worth it to pay a little more in upfront costs to reduce work-related injuries, keep your insurance premiums low and ensure that employees are properly trained for the jobs they’ll be performing.

The fix: Screen your temporary employees, as well as your full-time staff. A thorough screening should include a background check and prior injury history. And depending on the job requirements, additional screening may also be appropriate — for example, a motor vehicle records check is important for candidates whose role will involve significant driving.

 

The mistake: You don’t have the proper state coverage.
No matter what industry you’re in or how careful you are, accidents happen, and no business is immune. Carrying the proper workers’ comp coverage for every state you operate in will keep your agency protected when the worst occurs.

If you’re operating in multiple states, your agency needs to be familiar with the variations in workers’ comp laws in each state you are doing business in, federal laws and classification codes for your industry or industries. For example, you will not be able to place temporary workers in other states if you have a single state, state fund or assigned risk policy. Coverage needs also vary for different industries due to different levels of risk.

The fix: If you are running your own back office, it is essential that you know and follow state rules and regulations for all regions in which you do business, both to avoid being sued for employee negligence and to ensure you know your legal rights if a claim is filed. Visit workerscompensation.com to learn about the laws for your state(s).

 

The mistake: You don’t plan for employee fraud.
You probably trust your employees and it’s part of why you hired them. It’s also why many agencies can’t believe that one of their staff members would file a fraudulent workers’ comp claim.
Although studies show that just 1 to 2 percent of workers’ comp claims are fraudulent, false claims can drastically increase your premiums. Without clear processes in place to collect and record information for workers’ comp claims, you are an easy target for fraudulent activity, as you are less likely to see the warning signs.

The fix: Do your due diligence so that you recognize the signs of workers’ comp fraud. Red flags include not having witnesses to the accident, conflicting accounts of what happened, late reporting and difficulty reaching the claimant. While these are not necessarily definite indicators of fraud, two or more red flags in one incident is cause to investigate further.

 

Workers’ comp coverage is one of the largest expenses for staffing agencies. Yet the cost is even higher if you aren’t proactive about how you maintain coverage for employees. Knowing how costly errors originate will help you adjust your behaviors to better serve your employees and improve productivity.