Employers in every industry are deluged with information concerning on-the-job safety. Everyone knows that safety is the right thing to do and that it is the law, yet most employers do not take safety seriously. They talk a good game, but that is as far as it goes. Very few employers truly confront the potential for serious on-the-job injuries. Most will not accept the fact that with a serious injury, their world can collapse without warning like a house of cards.

The first thing employers must accept is that without a well-planned, well-drafted, well-implemented, and well-enforced safety plan, accidents will happen. The second is that even a minor accident can turn into a major headache.

What are some of the things an employer must consider when facing an on-the-job accident? First, there is the cost of the workers’ compensation claims. Depending on the state in which the employer is located, the type of insurance the employer carries, and the insurance company with which the employer must work, these costs can be extreme. If the employer has the misfortune to be located in a state that permits intentional tort lawsuits, the employer has to consider the potential impact of such litigation. With any on-the-job injury, there is the risk of an Occupational Safety and Health Administration (OSHA) inspection. The employer must face the indirect costs of the accident and possible third-party issues. In addition, various employment styled actions can confront the employer. These involve potential claims concerning OSHA discrimination and under the Americans with Disabilities Act (ADA) and the Family Medical Leave Act (FMLA).

This article gives an overview of each of these areas and their potential impact (clearly illustrating that it is best to provide a safe workplace for employees to minimize the potential for on-the-job injuries in the first place).

Workers’ Compensation

All 50 states require that an employer provide workers’ compensation coverage for their employees. Failure to carry this mandatory coverage can result in a company having to pay all the costs of an on-the-job injury as a self-insured employer, as well as possible penalties to the state for not carrying the required coverage. Six states (Nevada, North Dakota, Ohio, Washington, Wyoming, and West Virginia) in the United States are monopolistic states. In these states, private insurance is not permitted; the employer has the option of either being self-insured or participating in a state-operated insurance fund. In the remaining states, the employer is permitted to obtain private insurance or explore other options for providing workers’ compensation coverage.

Whether workers’ compensation coverage is obtained through private insurance or through a monopolistic state fund, a company’s claim history has a direct impact on its cost of coverage. Weekly disability benefit rates will vary from state to state, as will the types of other benefits available to an injured worker. Some states take into consideration whether a company was complying with safety requirements at the time of the injury. A company’s failure to comply with safety requirements can, in some instances, result in additional costs being awarded to the injured worker. An award to the injured worker—from medical benefits to penalties for failure to comply with safety regulations—will affect the company’s workers’ compensation experience and insurance premium.

The best way to avoid high workers’ compensation premiums is to avoid on-the-job injuries. An aggressively enforced safety program can significantly reduce a company’s on-the-job injury rate. When an injury does happen and costs are incurred, the way the company responds to the claim—both individually and in conjunction with its insurer—is critical. The approach taken to the claim and the issues that arise from it affects claims costs and subsequent adjustments in insurance premiums.

As many companies in the construction industry find, the company’s experience modification (“mod”) rate for workers’ compensation coverage can directly affect its ability to bid and get work. Some owners will not even consider a company with an experience mod over 1.

Intentional Torts

Intentional Torts Workers’ Compensation has always been intended to provide an exclusive remedy to employees for on-the-job injuries. Most state statutes contain language indicating that an employer who complies with the laws requiring workers’ compensation coverage is immune from any other legal action that may arise out of an employee’s injury. However, quite a few states have reexamined this concept over the last several years. Some states have determined that while an employee comes to work with the knowledge that accidents can happen, no employee comes to the job with the belief that his or her employer will intentionally try to harm employees. This philosophy has resulted in the concept of intentional torts.

Typically, intentional torts begin with situations where an employer blatantly disregards safety precautions for an employee and requires the employee to perform work in spite of the lack of safety protection. In this scenario, the employer knows that the employee is substantially certain to suffer an injury because of the work performed and the lack of safety protection. In many states, after this concept has been established through decisions in the courts, the legislature has attempted to codify the concept.

Because intentional torts are issues decided before a jury, various types of damages can be awarded, depending on either the case law or the statutory law in each state. Also depending on the law in each state, damages sought can be unlimited or may be controlled by statute. Employers should exercise caution when facing an intentional tort lawsuit. In some states, insurance against the intentional tort risk is available to employers. An employer should determine whether intentional torts are an available cause of action to injured workers in its state or a state in which it has employees working. If so, insurance coverage for such cause of action should be obtained, if available. Employers should read insurance policies carefully to understand the types and limits of the coverage in their policies.

OSHA Inspections

Following any industrial accident, an OSHA inspection is possible. Whether such an inspection occurs depends on many factors. If a catastrophic type of injury (one involving a fatality or the hospitalization of three or more employees) occurs, the employer must report the accident and injuries within 8 hours of the occurrence. In many cases where a serious accident occurs, media coverage can result in a follow-up OSHA inspection. If an accident is reported by radio, television, or the local newspaper, the company where it occurred has a relatively good chance of being visited by an OSHA compliance officer. In some locations, if an emergency squad is called to a facility or job site, that can generate an OSHA inspection. It is possible that the fire department or emergency medical services unit will call OSHA at the same time they send a unit to a location. An OSHA inspection also can be generated if the employee who was injured, his union representative, or even a fellow employee who feels aggrieved by the accident and resulting injuries calls OSHA.

A complaint can be made under almost any factual circumstances, but an employer is more likely to experience an inspection arising from such a complaint if the accident and/or injuries are serious. In such a situation, OSHA has probable cause to perform the inspection based on the accident report. In that case, the employer should limit the scope of the OSHA inspection to the area where the accident occurred and limit OSHA interviews to the employees who were working with the employee who was injured.

It is important for a company to address any OSHA citations it receives. This is another area where owners and principals may take a hard line with potential subcontractors. Some principals will not permit a sub with willful citations on their property. Remember, an OSHA record stays with an employer forever.

Discrimination

The injured worker sometimes—by virtue of his or her injury—obtains a status akin to super seniority. When an employee is injured on the job, the employer must look at various forms of discrimination that could be alleged against it if it becomes necessary to take job action with regard to that employee. Job action could include anything from denial of a pay raise or promotion to job reclassification, reassignment, or termination. Various forms of discriminatory activity can be alleged against an employer in these situations.

Some states have a concept known as workers’ compensation discrimination. In those states, any action taken against an employee who files or pursues benefits under an existing workers’ compensation claim can be deemed by a court to be discriminatory. In these situations, the damages available to the employee typically include reinstatement to the position the employee would have held but for the discriminatory action and payment of any back wages or lost income as a result of the discriminatory action.

Another area of potential discrimination that must be addressed is OSHA discrimination. Section 11(c) of the Occupational Safety and Health Act prohibits taking any adverse employment action against any employee who files an OSHA complaint, talks to a compliance officer during an inspection, or testifies in any enforcement proceeding. There are times when an employee who is injured, especially if the injury is serious, may make a complaint to OSHA with regard to an unsafe work environment. OSHA does not have to act on such a complaint; the mere fact that the employee made the complaint provides protection from disciplinary action by the employer.

Americans With Disabilities Act

The ADA applies to employers who have had 15 or more employees for each working day for 20 or more calendar weeks during the current or preceding calendar year. It applies to employees with impairments who, with or without reasonable accommodation, can perform the essential functions of their employment positions. A qualifying impairment is one that substantially limits a major life activity. These activities have been defined to include functions like caring for oneself, performing manual tasks, walking, seeing, hearing, breathing, learning, and working. The ADA applies to all forms of business and is not limited to construction. Some states have enacted laws that apply to all employers within that state, without any reliance on the number of employees.

This law may have broad application when working with employees who have on-the-job injuries. The existence of the law can affect everything from the employer’s wishes not to return the employee to employment, to returning the employee to a job with restrictions in an attempt to accommodate a work-related injury.

The ADA must be considered by an employer when trying to accommodate an employee’s restrictions. If the employer is accommodating temporary restrictions, the modified job should be identified as temporary for a defined period of time. When evaluating restrictions, the employer must determine whether the employee could be accommodated if the non-essential functions were eliminated from the job. Restrictions may not need to be accommodated if they will pose a direct safety threat to the employee or others.

Family Medical Leave Act

The FMLA is another federal law that can affect an employer with employees who have suffered on-the-job injuries. This particular statute applies to employers with 50 or more employees each working day during each of 20 weeks or more during the current or preceding calendar year. The 50 employees can work either at one location or at multiple locations within a 75-mile distance. The law applies to employees who have been employed at least 12 months and for at least 1,200 hours during the previous 12-month period. Among other situations not relevant to a discussion of on-the-job injuries, it applies to employees with serious health conditions, defined as conditions that require either in-patient care or continuing treatment by a health-care provider. Situations such as this can arise in workers’ compensation cases when a workers’ compensation claimant gets into a regimen of treatment with a chiropractor or physician on a regular basis, for example.

One of the key considerations under the FMLA is that if an employee chooses to take leave under the act, he or she must be returned to the same position of employment held when the leave period began. If an employee is injured and receives workers’ compensation benefits, but the employer does not run the FMLA leave concurrently with those benefits, then the employee may elect to stay off work longer under the FMLA. A qualified employee then becomes entitled to be returned to the former position of employment or an equivalent position of employment to the one held before the leave began. This can place the employer in an awkward position if the employee was on an extended workers’ compensation leave and his or her prior position has been filled by another employee.

Conclusion

On-the-job injuries can have a broad impact on a company, and employers should use every means available to limit their occurrence. When injuries do occur, employers must work aggressively to control the scope of the workers’ compensation claim. It is a good idea to keep a checklist of these various potential causes of action close at hand and to be sure that key personnel, such as human resources managers and loss control directors, fully understand the scope of the possible actions in their state.