With the variety of legal and occupational protections afforded to workers under federal and state law, hiring an employee can be far more expensive than the hourly wage you intend to pay. This is particularly true in the construction industry, where the cost of compliance with OSHA regulations and the purchase of hard-to-place workers compensation insurance can significantly cut into your bottom line. However, protecting your employees from injury is vital from both a legal and ethical perspective. How can you reduce your workers compensation costs to help your business remain profitable? Read on to learn more about lowering the cost for your hard-to-place employees.
What is hard-to-place workers compensation insurance?
Each business is required to carry a certain level of workers compensation insurance on its employees. This insurance is designed to help compensate your employee for any job-related injuries or illnesses he or she may suffer. This can include everything from a finger smashed by a hammer to a chronic illness like mesothelioma caused by decades of asbestos exposure. Workers compensation will help replace at least a portion of your employee's salary while he or she is out of work, as well as pay any medical bills (including physical therapy) incurred as a result of a work-related accident.
While most workers have a low risk of being injured on the job and are fairly cheap to insure, those employed in industries that tend to be highly physical or carry other risks (like construction, nursing, and trucking) have a much higher probability of eventually filing a workers compensation claim. These workers are often placed in a higher-risk pool termed "hard-to-place workers compensation." Many employers can find it difficult to find an insurance company that offers hard-to-place policies and may face high premiums if an eligible policy is discovered.
How can you lower your workers compensation costs in the construction industry?
Although construction workers are one of the cornerstones of the hard-to-place category of workers compensation policies due to the physicality of the job and the risk of injury, you may be able to reclassify certain workers (for example, office or clerical staff) to help remove them from the hard-to-place pool. Each state has different risk classes and rates, and correctly classifying your workers can significantly lower your costs. For example, in Washington State, workers compensation insurance for a construction worker will cost you an average of $2.63 per hour (on top of salary and other benefits), while a clerical worker will only cost around $0.16 per hour.
One of the reasons construction workers are at a high risk of filing a workers comp claim is due to the cumulative nature of wear and tear injuries suffered at a highly physical job. Even if an employee never suffers a sudden injury on the job, over time he or she may develop joint issues, vision problems, or even nerve damage after years of carrying heavy items, being exposed to flying shards of wood and metal, or performing repetitive actions like using a nail gun. If this long-term injury can be conclusively linked to your business, it's likely to fall under the workers compensation umbrella, requiring you to file a claim.
Taking steps to increase safety for your workers can also go a long way toward reducing their risk of both short-term and long-term injuries. If you're able to demonstrate to your workers compensation insurance provider that your employees are at a much lower risk of injury than those working for other construction contractors, you may be able to secure discounted rates. To further your cost savings, you may wish to sponsor periodic safety training for your employees or invest in equipment that can allow them to haul heavy items without putting too much weight on their hips, knees, and ankles.
For more information about workers compensation and how to maximize your rates, contact a firm such as Hardee and Hardee LLP.
