Compliance

Anyone with employees needs workers’ compensation insurance. Yep, everyone. Workers’ compensation provides wage replacement and medical benefits to employees injured in the course of employment. Just like any other insurance, you hope you’ll never need to cash in on it. But if you do end up needing it, it’ll save your butt a million ways. That said, the costs associated with workers’ compensation claims can be a significant burden on a business, so it’s best to take proactive measures to create a safe work environment and manage potential liabilities effectively.

5 Steps to Safeguard Against Workers’ Compensation Risk

Step One: Be Proactive

Employers that ensure worker safety and implement best practices before they need them are in the best position to protect employees, keep claims manageable, and maybe even keep premiums down. That’s a good reason to pursue prevention like you would pursue a crisis. If you do, you might end up preventing said crisis all together.

Proactive measures include making regular safety meetings, ongoing education, and performance metrics standard procedure. Encourage open communication about safety concerns. Identify potential safety hazards in your workplace and provide written safety policies and procedures to address them. Regularly update them to reflect changes in regulations or emerging risks.

Keep your workplace clean and organized to reduce slip and trip hazards. Ensure that safety equipment, such as fire extinguishers, first aid kits, and eyewash stations, are easily accessible and regularly inspected.

You know that weird thing that happens when you are so close to a situation that you lose objectivity about it? That’s a good reason to have a third party conduct regular safety audits and inspections whenever it makes sense for your business.

Step Two: Create Airtight Internal Processes to Handle Claims

After you’ve taken measures to prevent workplace accidents, it’s still good business to prepare for the worst. Create a process for employees to report safety concerns, near misses, and accidents promptly. Investigate incidents thoroughly to identify root causes and implement corrective actions to prevent similar incidents in the future.

Implement a plan for how you’ll handle a claim if one does still come up after you’ve put all your preventive measures in place. Make sure reserves are accurate. Have a standard operating procedure. Decide who will talk to the adjuster and within what time frame. Taking the time to lay out your processes while your brain isn’t in crisis mode results in sounder decisions. The added benefit is that it will reassure your adjuster that you’re engaged and motivated to reach a speedy resolution.

Have a “Return-to-Work” Program established to  help injured employees transition back into the workforce as soon as they are medically able. This can reduce the duration of workers’ compensation claims and associated costs. These measures demonstrate a level of professionalism and reassure insurance companies and employees alike.

Step Four: Invest in Accurate Worker Classification

This may not seem related, but an independent contractor filing a workers’ comp claim can easily land a well-intentioned company on the DOL’s radar. This happens with surprising frequency despite the logical assumption that an independent contractor should understand the implications of a business-to-business relationship. One key aspect of a true B2B relationship is that a worker’s business activity exists independent of the employer. Preventing misclassification and communicating clearly with workers is a worthwhile preventative investment.

Step Five: Engage The Right Partners

Review and evaluate your insurance coverage to ensure it adequately meets your business needs. Consider working with an insurance expert to identify potential cost-saving opportunities. Seek professional guidance from partners (such as an Employer of Record, like PayReel) that is in position to help you manage the risks associated with having employees. They can provide valuable advice on risk mitigation strategies and legal compliance.

The Bottom Line

If you don’t have the budget to implement every possible safety measure for a project, you don’t have the budget for the project. Protecting your business against workers’ compensation risks is not only a legal requirement but also a smart business practice. By creating a safe work environment, implementing comprehensive safety measures, and actively managing workers’ compensation claims, you can reduce the financial and reputational risks associated with workplace injuries. Remember that investing in safety is an investment in the long-term success and sustainability of your business. The best workers’ comp claim is the one that never happens.

If you’ve worked in an office environment and also watched “The Office,” you can probably recall a Todd Packer type. They speak in innuendos, find themselves incredibly entertaining, and generally make people around them wish they could disappear.

In “The Office,” there’s one exception: Michael seems to find Todd Packer’s behavior aspirational rather than offensive. Still, coming from the guy who can’t resist an opportunity to drop his, “That’s what she said,” line, this doesn’t bode well for ol’ Todd.

In my experience, most of the problematic people are a little more subtle than Todd Packer, but any level of sexual harassment can negatively impact employees’ well-being and even bring down productivity.

California’s sexual harassment training requirements are meant to prevent the Todd Packers of the world from having a captive, highly-uncomfortable audience in the workplace. Whether there are similar laws in your location or not, sexual harassment prevention really is an important subject. Preventing sexual harassment promotes respect, dignity, and equality.

Key Aspects of California’s Sexual Harassment Training Requirements

1. Mandatory Training Requirements: California law mandates employers with five or more employees provide sexual harassment prevention training. All staff, including supervisory and non-supervisory staff, employees and contractors, and even unpaid interns and volunteers. This training is required within the first six months of employment and should be provided every two years after that. The training must consist of at least two hours for supervisors and at least one hour for non-supervisory employees.
2. Content/Method of Training: Employers have some liberty in how they choose to conduct the training (using videos, webinars, etc.), but the curriculum must ensure that employees understand what constitutes harassment, how to prevent it, appropriate ways to report an incident, the potential legal consequences for violations, and what role bystanders can play in preventing harassment.
3. Purpose: Proper sexual harassment training is designed to equip employees with the knowledge and confidence to identify, address, and report any inappropriate behavior. The idea is to empower individuals to contribute to a healthy work environment and ensure a level of accountability at all levels of the organization. When it works as designed, this ensures workplaces remain free from harassment, discrimination, and toxicity and also promotes a more equitable and productive working environment.

Bottom Line For Employers

Complying with California’s sexual harassment training laws is not just a legal obligation, but also a way to create a respectful and inclusive workplace culture. While we do want to bring a little bit of levity with GIFs from “The Office,” we do know that nothing about sexual harassment is funny.

When you partner with PayReel as the Employer of Record (EOR) on your project, you can be assured we’re on top of sexual harassment training requirements on your behalf. When we hire employees in states with these requirements, workers must take the state’s training, download the certificate, and upload it into PayReel Online so we ensure compliance.

Whether it’s a part of your state’s regulations or not, fostering an environment where employees feel safe and valued reduces a business’s risk of legal disputes, negative publicity, and loss of productivity. In short: just do your part to send the Todds of the world packing.

We talk a lot about what to do when you’re running a business–things like accurate worker classification, paying employees properly, and generally just doing right by your workers. What we don’t always address is what not to do.

10 terrible workplace violations and the lessons we can all learn from them

1. A lesson from Packers Sanitation: There’s no place for having kids cleaning dangerous equipment.
2. A lesson learned from Miami: If you don’t have the resources to ensure workplace safety, you have no business having a business.
3. Lesson learned from this Virginia Home Care Provider: Overtime pay is not optional.
4. Lesson learned from the saw mill: If OSHA tells you to fix something, just do it.
5. Lesson learned from Dollar General: Repeat violations cost more than a dollar, in general.
6. Lesson learned from this North Carolina home care operation: Misclassifying workers to “save money” turns out to be expensive!
7. Lesson learned from Baltimore: Shortchanging your people on their retirement will end up costing you more than chump change.
8. Lesson learned from Georgia: Suspend operations if your suspension operations aren’t safe.
9. Lesson from Delaware: Retaliation against whistleblowers will come back to haunt you.
10. And finally, three lessons learned from thousands of greasy pennies: Pay your employees up front, don’t call your employees weenies, and if you’re gonna pay them in greasy pennies, at least own it. You just end up looking worse when you say you “don’t really remember” your petty behavior.

The Bottom Line

It’s in your power to be a good employer. If you don’t have the in-house resources (i.e. a dedicated department that specializes in these matters) to ensure you’re in compliance with overtime rules, worker classification guidelines, and benefits eligibility, you can ensure you stay in good standing by engaging a partner! Contact us to chat about what solutions we can provide for your business.

Employers are busy working out their policies around labor laws and fair pay as the economy changes. In turn, worker classification challenges and employer missteps seem to be finding their way to the headlines more often. As we know, wherever money is on the line and laws are unclear, you’ll find controversy right behind. If you’re looking to engage an Employer of Record (EOR) or a partner for your compliance issues and freelancer management, watch out for these warning signs.

3 Red Flags That Should Send You Running

Promising to Find Legal Loopholes

This article points to a California politician who has called for an investigation into an employer of record company and accused it of “advising its clients on how to misclassify workers and avoid taxes.” Whether the allegations prove true or not, we know it’s common practice. Let’s just get this straight right away: trying to get around the law does you no favors in the long run. Even when those laws are a real pain.

It might be tempting to look for a way around the rules, but paying employees fairly and classifying them correctly needs to be an absolute baseline for doing business with an Employer of Record. What you should be looking for is a team that keeps up with ever-changing contractor / freelancer payment and compliance issues on your behalf. 

The most effective partners will adjust to changes on both the state and federal level and will be proactive about ensuring compliance. With the right partner, you won’t have to think about the frequent changes in policy around freelancer payment and compliance regulations because they’ll be thinking about it for you. Find a partner that you can be confident is in position to mitigate compliance risk and educate you on practices that could compromise you legally.

Lax or Nonexistent Payment Processes

You know how people care about their paychecks? You should, too. If your partner doesn’t have a standard, well-established set of processes to make sure employees are paid accurately and in a timely manner, run. Just get the heck out of there.

If they have their act together, your payroll company will offer online management for employees to log hours and supervisors to approve them, fast/accurate payments, and automated overtime tracking. They’ll also provide you with consultation for overtime and benefits policies that will keep you in good standing. Their automated systems will track changes in minimum wage and sick leave policies. Don’t settle for anything less. You’re worth it.

Anytime you’re dealing with payroll, there is risk involved. Workers understandably care a lot about it because their livelihoods are involved and the government cares because they have rules and regulations in place both to get the taxes they are due and also to protect workers. The two most important factors of a successful payroll program are accurate/on-time payments and compliance with federal, state, and local regulations. 

What Makes Compliance Challenging?

States and localities are constantly introducing new legislation, and with each change, payroll procedures change, too. Mistakes in income tax withholding rates, unemployment tax rates, minimum wage and labor laws can lead to costly penalties. The more states a business operates in, the more risky the compliance aspect becomes because the rules vary from place to place.

As the employment landscape has changed and many workers have shifted to more of a hybrid or remote situation, it has only complicated the matter further. If an employer doesn’t have an established entity to pay employees appropriately in a given state, they aren’t in position to have employees there at all. 

What Can Employers do to Prevent Problems?

We all know that prevention is the best policy, but some companies are quick to start auditing their process and procedures only after they see a problem. The businesses with the smoothest processes have proactive auditing measures in place to stay on top of changes, identify and solve gaps in their processes, etc. 

Manually managing all of these complex details is impossible. Businesses should take compliance very seriously to reduce their risks. If their internal team doesn’t have the bandwidth or tools to manage it accurately, they should engage a partner with the tools, methods and processes to help. They should also be in position to address the concerns that come up when employees have questions about their paychecks. If you’re wondering if a partner would help with your situation, let’s chat. This is our speciality. 

Staying on top of compliance concerns can be tedious and time-consuming. Plus, with possible fines, legal fees, and damage to a company’s reputation on the line, the stakes are high. Many companies find that having an in-house team dedicated to keeping up with the laws as they change (and then change again) is unsustainable. Handling all of the details around onboarding, classifying, and paying workers correctly requires a specific, highly-specialized skill set. Whether you hire a payroll service or build a team to do the job, they need to be fully in position to walk the legal line. 

Benefits of Hiring an Employer of Record (EOR)

1. They Diffuse Legal Landmines 

Contractor/freelancer payment and compliance regulations are ever-changing. An EOR allows you to hedge your bets on the legal front by mitigating compliance risks. They handle worker classification issues and track benefits eligibility and changes in minimum wage or sick leave policies. They can educate you on best practices and can serve as a sounding board for questions. 

2. They handle payroll. 

Compliance and payroll are some of the most important aspects of business to get right. Having those issues handled correctly keeps you off the radar with governmental agencies and keeps your workers happy, too. An EOR with online management for employees and managers, fast payment, automated overtime tracking/benefits eligibility ensure is an especially valuable partner. 

3. They adapt to changes on your behalf. 

The most effective teams have checks and blanches in place to stay on top of payroll regulations and legal changes  as they happen. They take the necessary steps to adjust policies and navigate the increasingly-complicated waters of payroll services. Their job is to make sure you’re following all regulations, rules, and federal and state laws. Whether you hire a partner for it or not, somebody on your team needs to be fully-versed in these issues. 

The Bottom Line

Labor laws and fair pay standard practices constantly change. Worker classification issues are top-of-mind topics for the government, employers, and employees alike. Pick an EOR  that is in position to stay ahead of the curve so you never even have to think about payroll services and compliance. If you’re ready to make compliance and payroll the easiest part of your day, contact us anytime.

Who needs workers’ compensation insurance? Anyone with workers, it turns out. When employees are injured in the course of employment, such insurance provides wage replacement and medical benefits to workers as well as protections for the employer. Just like any other insurance, you hope you’ll never need it. Still, if you do, it can be absolutely imperative to operations. Businesses that ensure worker safety and implement best practices before they need them are in the best position to protect employees, keep claims manageable, and maybe even keep premiums down.

Best Practices to Mitigate Workers’ Compensation Risks

1. Prevention

Chase prevention like you would chase the crisis or you’ll certainly end up chasing a crisis. Make regular safety trainings and ongoing education standard procedure (even if employees roll their eyes). If you don’t have the budget to implement every possible safety measure, you don’t have the budget for the project. The best workers’ comp claim is the one that never happens.

2. Refine your claims management process

If you’re scrambling to figure out how to handle a claim if it comes up, you’re already behind. Have a standard operating procedure on day one. Decide which role is responsible for talking to the adjuster and within what time frame. Train that person ahead of time. Lay out your processes while your brain isn’t in crisis mode and you’ll make sounder decisions. The added benefit is that it will reassure your adjuster that you’re engaged and motivated to reach a speedy resolution.

3. Implement a return to work program

Have a plan for injured workers who have been cleared for modified duty. These measures reassure insurance companies while demonstrating professionalism to employees.

4. Invest in accurate worker classification

An independent contractor filing a workers’ comp claim can easily land a well-intentioned company on IRS and DOL radar screens. This happens with surprising frequency despite the logical assumption that an independent contractor should understand the implications of a business-to-business relationship. One key aspect of a true B2B relationship is that a worker’s business activity exists independent of the employer. Preventing misclassification and communicating clearly with workers is a worthwhile preventative investment. Contact us at 303-526-4900 or by email for a free workers’ compensation risk analysis.

What’s Ahead

Workers’ compensation is always changing. Each political administration handles it differently and states have their own rules and approaches. Workers’ compensation carriers adjust costs and terms in the face of declining profits and escalating claims costs and operating expenses. Companies that address the subject proactively are in the best position to ensure minimal premium increases. Aside from cost, keeping employees safe is forever a worthwhile investment.