Layoffs are an unfortunate reality for many businesses. Whether a layoff is planned or unplanned, a business can suffer major reputational harm or even be taken to court following a large-scale termination.
In fact, it’s not unheard of for layoffs (and even just the threat of layoffs) to increase workers’ compensation claims, particularly in a tight job market. This is because individuals faced with a loss of income, temporary unemployment benefits and the likelihood of unaffordable health insurance may look to workers’ compensation as a way to sustain their income.
Communicate With Your Insurance Carrier and Legal Professionals
First and foremost, it’s crucial that you let your insurance carrier know about any downsizing plans. This is because your carrier can provide tips for dealing with any workers’ compensation claims that may follow the downsizing.
Working closely with a legal professional can also help you understand the relevant workers’ compensation laws in your jurisdiction.
If a claim does arise, you should immediately report any suspicions you have about the claim —along with all the reasons for your suspicions—to both your workers’ compensation carrier and legal professionals. The earlier you voice concerns, the more opportunities you’ll have to investigate the claim, gather medical evidence and discuss defense strategies.
Have Strong Reporting and Investigation Procedures in Place
Workers’ compensation claims are not often decided by a singular bit of information or evidence. Rather, employers must cover multiple angles in order to defend against questionable claims effectively.
Maintain Strong Recordkeeping Practices
When it comes to combating questionable future claims, accurate recordkeeping can make all the difference. Above all, employers need to know where employee records are kept and should secure photocopies of them as backups.
Watch for Risk Indicators
To better protect themselves, employers should be aware of certain indicators that they may be at risk of a future claim:
- The employee is disgruntled after being fired or laid off.
- The employee has been told his or her employment is about to end.
- The employee is having financial difficulties.
Have a Strategy in Place
While employers must never attempt to prevent an employee from making a workers’ compensation claim, the above tips can assist in avoiding and defending against questionable claims. Employee reductions can pose a significant challenge for employers and are often devastating turns of events for employees. It is important for employers to have a layoff strategy broken down into goals and an action plan for the company.
For more workers’ compensations strategies and advice, contact ProAction Insurance Services today.