Avoid Workers' Compensation Claims Post-Layoff

All across America, workers are losing their jobs. According to the Louisiana Workers’ Compensation Corporation, workers’ compensation claims may increase by as much as 50 percent during layoffs. How can companies avoid post-layoff claims and protect their experience-modification factor? Employers must be proactive to avoid potential workers’ compensation claims at layoff or restructuring.

Here are some tips to help you avoid post-layoff injury claims. First, ask your workers’ compensation carrier, and your employment practices carrier if you have one, to help you design and implement a pre-layoff strategy to protect your organization. Be persistent if they resist. Remind them that even if only one claim is avoided, it will doubtless pay for the cost of implementing the program. Don’t rely solely on your carrier; consider a consultant, because only a few claims can devastate an organization’s loss history.

Next, conduct exit interviews with every employee who will be laid off or terminated. Make sure at least one company executive and if possible a legal representative such as a human resources consultant attends, as well. Don’t focus solely on injury status. Treat this like a normal exit interview, soliciting the employee’s input to help ease his or her transition and to improve your corporate culture. Use a checklist to ensure you cover the same questions with employees, but be prepared to deviate if the employee voices concerns. Leave room for any additional comments made by the employee or company representatives. Make forms in other languages available if non-English speaking employees work in your facility. Document the interview, and in most cases ask employees to sign the checklist receipt for inclusion in the employee’s personnel file.

While some experts recommend employees sign an injury waiver, waivers rarely work as intended and may be perceived as a sign of bad faith. If your plant closing or reduction in force generates publicity, handling of the closure will be closely scrutinized. Disgruntled employees can damage your reputation, and you may be faced with unwanted media attention and a barrage of plaintiff firms targeting your former employees. Using a waiver may damage your goodwill in your community, so obtain advice from other human resource professionals or legal counsel before asking employees to sign a waiver.

Then, be sure that you have a strong security plan in place, because feelings surrounding job loss naturally run high. Before the current economic picture, employees who were terminated could find other employment. Now, a termination or layoff may mean a protracted period of time of unemployment, and may leave employees angrier and more aggressive than in times past. Anything you can do to ease the transition can help, such as offering job counseling or other assistance.

Finally, thoroughly investigate any accidents or injuries that occur as layoffs loom. Even if you believe employees are unaware of pending layoffs, the underground organizational pipeline is incredibly resilient. Employees usually know, or intuit, much more than managers believe they do.

When eliminating personnel, it is critical that you empathize with the feelings and stresses that accompany a layoff. Treat employees with the utmost respect, but protect your organization in the process.