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Minimizing the Costs of Workers’ Compensation as a Tech Business Owner

Minimizing the Costs of Workers’ Compensation as a Tech Business Owner

Wednesday, March 23, 2016/Categories: workers-compensation-insurance

Workers’ Compensation Insurance is almost always mandatory for an employer, but that doesn’t mean it has to be expensive – especially in IT. Knowing how to classify employees and keep them safe can go a long way toward cutting down your expenses.

Here are some steps any IT business owner can take to lower their Workers’ Comp costs:

  • Classify workers correctly.
  • Invest in ergonomic equipment.
  • Encourage breaks and vacations to avoid stress-related problems.
  • Communicate with injured workers to avoid lawsuits.
  • Adhere to state laws and avoid fines.

Sounds pretty simple, right? Learn more about these steps below.

Classifying Employees Correctly Can Save You Money

Here’s a hot Workers’ Comp tip: the premium you pay for your Workers’ Comp Insurance is influenced by how your employees are classified. Based on their occupation, and the riskiness of said occupation, each class code sets a base rate for what you pay in insurance premiums (see “How Class Codes Can Save You Money on Workers’ Compensation Insurance”).

If your employees are classified as a more dangerous profession than they really are, you could be paying much more in Workers’ Comp Insurance rates than you should be. Talk to your state’s Workers’ Comp authority or your insurance carrier if you think your workers are misclassified.

Ergonomic Equipment Can Prevent Strains and Claims

The majority of an IT employee’s day is at a computer – leaving the average officer worker to contend with neck strain, back strain, eye strain, and carpal tunnel syndrome. For a first-hand account, see Michelle Tackabery’s story in “Carpal Tunnel Syndrome: A Worker’s Comp Minefield for Technology Businesses.”

Ergonomic equipment can help:

  • Provide a variety of sitting and standing options for employees.
  • Have adjustable chairs, monitor stands, and work surfaces.
  • Train workers in proper ergonomic posture and how to adjust their equipment.

Though there’s a significant cost upfront in acquiring this equipment, it can be a great investment if your employees use it properly and avoid making a Workers’ Comp claim due to strain. If you can’t afford a lot of new equipment, consider paying for a portion of it and encouraging your workers to cover the remainder if they want to be healthier.

Breaks and Vacations Can Help with Stress and Injury

Never underestimate the power of a good bit of relaxation. If your employees are fraying at the seams due to long hours and stressful situations, they’re more likely to suffer an accident or injury while working. In some states, they may even be able to make a stress-related Workers’ Comp claim. Allowing them some breathing room now and then is a good idea.

Communicate with Injured Workers to Avoid Lawsuits

An injured worker typically goes to an attorney for two reasons, says Duke Mills (@DukeMillsWCS), president of The injured individual may feel threatened by either…

  • Their employer.
  • The insurance carrier.

To prevent a Workers’ Comp claim from turning into an expensive lawsuit, do everything you can to make sure the employee knows they’re going to be taken care of.

“If it was your brother that got hurt, would you be down there with him in the ER?” Mills says. “Make sure they know you care, don’t let them miss a paycheck, and keep dialogue open with them making sure they’re satisfied with the carrier, adjuster, and treating physician. If they’re not happy, contact your carrier and make the necessary changes.”

Follow the Law, Avoid Hefty Fines

It’s common sense: follow the law. If you have employees, check to ensure you’re complying with your state’s Workers’ Comp laws and carrying the necessary coverage. The majority of states require all employers to have Workers’ Comp, but a few allow very small businesses to go without it.

Also, make sure you’re not misclassifying employees as contractors. If the government finds that your workers act more like employees than as independent 1099s, you’ll be responsible for covering them with Workers’ Comp and potentially paying back premiums or fines.

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