February 2005 Archives

February 28, 2005


One of the most problematic areas of workers compensation coverage involves independent contractors. It is indeed ironic that tradesmen in high risk occupations (construction, landscaping, mechanical trades, trucking) often find themselves without workers compensation coverage because of their independence. In many (but not all) states, independent contractors are precluded from securing workers comp insurance. When these people are seriously injured, often their only recourse to indemnity and health benefits is to claim an employment relationship with the general contractor operating the site where they got hurt. The GC will state that, no, this is not my employee; I don't control the work. The independent contractor, content with his or her status until the injury, now tries to claim that the GC controls the work and hence, there is an employer-employee relationship -- and the workers comp coverage that comes with it.

Many states offer guidance on this perplexing issue. To cite just a few: the state fund in Oregon provides guidance on the criteria for independence, pretty much following the IRS standards. In Rhode Island, independent contractors have to self-certify that they are indeed independent, thus building a firewall between themselves and their GCs -- to the GC's advantage. (In Rhode Island, independent contractors cannot secure workers comp coverage for themselves.) Across the border in Massachusetts, the attorney general has put GCs on notice that they are responsible for workers comp coverage for "independent contractors" and "sole proprietors."

In July of 2004 the MA AG issued new requirements for independent contractors (M.G.L.c.149 sec.148). The new regulations contain strong, unambiguous language creating a default assumption that "independent contractors" are in fact employees, unless three explicit criteria are met. In other words, the burden of proof is now clearly on employers/GCs to prove the independence of subcontractors. In the absence of such proof, the subcontractor is assumed to be an employee. As a result, insurance carriers will routinely add the 1099 numbers from undocumented "independent contractors" to the GC's payroll for calculating workers' compensation premiums.

The new standards are more stringent than the standards promulgated by the IRS, the Fair Labor Standards Act (FLSA) and even MA common law.

Three Criteria
The new law creates a presumption that any working arrangement involving "independent contractors" and sole proprietors is in fact an employer-employee relationship unless you establish that all three of the following factors are present:
1. The worker is free from the presumed employer's control and direction in performing the service. This standard is similar to those of the IRS and FLSA. Activities must be carried out with autonomy and independence. Contractors provide their own tools and materials and use their own approach without instruction or supervision. They determine their own hours.
2. The service provided by the worker must be outside the employer's usual course of business. In other words, if the "independent" contractor is in the same trade as the employer's own workers, there can be no determination of independence! Hence, overflow crews are not independent unless you can document that they carry their own insurance.
3. The worker must be customarily engaged in an independent trade, occupation, profession or business of the same type. The contractor must be in an independent business enterprise, working for others, truly working on his own.

There is an additional and, to my mind, rather scary dimension to the new regs in MA. In addition to the unambiguous wording creating a presumed employer-employee relationship, the regulations open the door for lawsuits. Once it has been determined that the "independent contractor" is in fact an "employee," the employee you did not know you had can sue you for violation of any number of worker rights you mistakenly thought did not apply.

Here is brief list of some of the laws under which your new-found "employees" can sue you:

  • Wage and hour laws
  • Minimum wage law
  • State overtime law
  • Law on keeping payroll records
  • Withholding taxes and payment of social security benefits
  • Wilful understatement of payrolls for workers compensation insurance
  • Violation of laws on discrimination.

As I read it, it would almost be impossible not to be in violation of one or more of these statutes. Why would you track presumably "independent" contractors to this level of detail?

The independent contractor law provides for substantial civil and criminal penalties with fines up to $50,000 and even prison terms! In addition, firms can be debarred from public works projects for 6 months (for the first unintended offense) up to 5 years (for a willful first offence). (This is in addition to any penalties under the long list of employee benefit rights listed above.)

Protecting your Interests
The managing of independent contractors and sole proprietors has become a very high stakes game -- not just in Massachusetts. So how can you protect yourself?

Ideally, all of your subcontractors should be incorporated and should carry a full line of insurance coverage, including workers comp (where available). GCs should require that subs and independent contractors provide certificates of insurance with specified levels of coverage. For contractors operating in MA, all subs, including independent contractors, should be required to carry their own workers comp insurance.

Certificates of insurance should be carefully tracked. Secure original certificates (not copies) and make sure the coverage is up-to-date and maintained from year-to-year. If your subs and independent contractors cannot provide this documentation of insurance, or if the certificates have expired, do not allow the subcontractors on the job site. If they begin working without insurance documentation, you are at immediate risk for assuming liability as their employer! At first, you may find resistance to these new and tougher standards, but once established, they will simply become a routine of the business day.

On the other side of the equation, people working as independent contractors and sole proprietors should secure their own disability coverage, either through workers comp (if available) or through conventional disability insurance. You need to protect your livelihood!

This is a complex issue well beyond the scope of a single blog. When I "Googled" "workers compensation + independent contractors" I had nearly 2 million responses! We will certainly revisit this issue in the months ahead.

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February 27, 2005


If you were one of 20,000 women employed in a non-domestic job in Boston in the 1880s, you probably worked a 10-hour day, six days a week and earned $6.03 for your weekly labors. You didn't have very much time off. If you were among the lucky one in five working women who had any vacation time at all, you probably didn't get paid. If you had a holiday, you were likely docked in pay. If you worked for one of the larger employers, you might even be docked in pay for being as little as a single minute late to work - in some instances, fines might be levied. And if you needed to be out sick, at least some jobs required that you find a substitute worker.

This profile was garnered from a 130+ page report entitled The Working Girls of Boston that was published in 1989. It's available online in its entirety from the Harvard University Library. The report was compiled from the 1880 census and from interviews with 1,032 working women.

The report is fascinating. The introduction states that " ... one of the chief reasons for undertaking the investigation, was to determine whether the ranks of prostitution are recruited from the manufactory" so part of the study included canvassing "all the houses of ill repute." In its summary, the report concludes that " ...the girls ... as a class, are honest, industrious and virtuous, and are making an heroic struggle against many obstacles, and in the face of many temptations, to maintain reputable lives."

Health & safety conditions: the workroom and its surroundings
It's difficult to get an objective picture of the health and safety conditions in terms of numbers since objective criteria were not used. Women reported on their own health and working conditions. In describing health, terms were often imprecise, such as "delicate," "robust," or "middling." Measurement standards commonly used today were similarly imprecise. One section of the report discusses lost time, stating that 758 girls lost an average of 12.32 weeks of work in the preceding year, but reasons varied, including " ... dull times, lack of work, sickness of self, children or relatives, or on account of machines being out of order and awaiting repairs."

While most workers described their working conditions as satisfactory to good, a very different picture emerges as you continue reading. Many complained of tiredness from climbing "four, five, six, or even seven flights" to reach higher floors in buildings with poor egress and lack of fire escapes, a foreshadowing of the Triangle Shirt Waist Factory Fire.

Other complaints pointed to the stamina needed for long hours spent standing or operating manually powered equipment. The report focuses less on safety and injuries and more on the overall effects of work on general health, referring frequently to tiredness, nerves, exhaustion, or women being run down and needing rest after being on the job for a period of time. Medical conditions like blood poisoning, consumption, and lung problems were also reported.

Common injuries
There were complaints about poor ventilation and crowded conditions, referencing exposure to dyes that cause "acid sores" on the fingers and dust from sorting feathers, straw, or cotton. Exposure to lead dust in foundries was common and thought to be unhealthy, resulting in "girls and men having little or no color in their faces," and even some reports of girls having died from the effects. In fish packing plants, girls stood in cold water, and wore the skin off their bare hands from handling fish packed in pepper and saltpeter.

Manufacturing buttons resulted in frequent accidents from catching fingers in machines. They must have been frequent because someone (probably not a doctor) was on hand to treat the resulting injuries — ... a man is provided to dress injuries three times at no charge, after that the injured person must pay all expenses.

In addition to dangerous work, the overall conditions sound bleak. A lack of adequate toilet facilities was described, and facilities sometimes were located in the center of the work space, emitting noxious odors. Women were said to suffer "evil effects" of "waiting for the use of a closet."

The report is an interesting read in offering an historical view of women in the work force. The patronizing benevolence runs thick, and it is telling that the concern for their morals seems to have equal or greater weight than any concern for their physical well-being. It also paints a picture of conditions for the worker in the decades leading to the 1911 passage of the Workers Compensation Act.

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February 25, 2005


We're big believers in employers committing to a total safety culture. If management can aim for a zero quality defect standard in a manufacturing process, why not hold to the same high standard for preventing "defects" to people?

Are a certain number of injuries considered acceptable? Are worker injuries an inevitable part of doing business? We don't think so, but occasionally we meet employers that do. When we talk to the "some injuries are inevitable" employers, we can't help but wonder if they accept the same philosophy in other aspects of their lives. Would they find it acceptable if a certain number of injuries occurred to guests in their home? Or would it be acceptable if they got food poisoning in their favorite restaurant every now and again because accidents are inevitable? Not very likely.

But then again, having a commitment to a safety culture takes much more than lip service or a implementing a policy. A safety policy isn't worth the paper it's written on if actions don't follow the words. In this month's issue of Industrial Safety and Hygiene News, there is a column by Dr. Dan Petersen that discusses the topic of a meaningful commitment to safety. His commentary is well worth a read. He offers eight characteristics of a positive safety culture that we agree with. They are:

  • management is seen as credible;
  • the words of the safety policy are lived on a daily basis;
  • management’s decisions on financial expenditures show that money is spent for people (as well as to make more money);
  • measures and rewards provided by management force mid-manager and supervisory performance to satisfactory levels;
  • workers have a role in problem solving and decision making;
  • a high degree of confidence and trust exists between management and the workers;
  • there is openness of communications; and,
  • workers receive positive recognition for their work.

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February 23, 2005


In case you haven't noticed, the Insider cannot resist conundrums. We like to explore the ragged edges where conflicting views of reality play out their destinies. Which leads today to the interesting topic of volunteers. Are volunteers ever considered employees for the purposes of workers compensation? Are employers liable for the actions of their volunteers, just as they are for the actions of employees?

This blog was triggered by a recent case in Wisconsin, where a volunteer for Christ King church was delivering a statue of the Virgin Mary to a parishioner. In her haste to do the good deed, she ran a redlight and crashed into the vehicle of one Hjalmar Heikkinen, an 82 year old barber. Heikkinen suffered permanent paralysis. In the perennial search for justice (and deep pockets), his attorneys included the church in his suit, under the theory that the volunteer driver was actually their "employee." It's basically the same legal principle that says a private delivery business can be held liable for one of its employees who causes a crash while driving for work.

Plaintiff attorneys zeroed in on several lines in the church's insurance policy, which indicated that volunteers doing church work are explicitly covered. Church attorneys noted the Legion of Mary meets and conducts its business without church guidance, but the other sides' filings said the Legion of Mary was chartered at Christ King in 1968 with the help of a parish priest and noted the group was listed in several church publications.

At this point, the jury has awarded Heikkinin $17 million. How much personal liability coverage do you suppose the volunteer had under her auto insurance? Is it any wonder that the plaintiff attorneys sought to call in a higher authority?

Volunteers under Workers Compensation
Some states recognize the rights to workers compensation for volunteers, especially when it comes to volunteer firefighters. Some states, such as California, give employers a choice of whether or not to include volunteers. The University of California at Northridge has opted to cover volunteers for work related injury, even though they are not required to do so. I think it's the right choice, given that it probably doesn't cost them anything to do it. Because comp premiums are based upon payroll, and because the volunteer payroll by definition is zero, adding the volunteers does not cost them anything. In addition, it creates the same "exclusive remedy" path for volunteers that exists for regular employees, so injured volunteers cannot bring suit against the university for work-related injuries.

Even though volunteers do not make any money, if they suffer serious injuries in the "course and scope" of their volunteer efforts, they may try to assign a dollar value to the services, in order to come up with an indemnity payment. This is an issue that many hospitals -- with their huge cadres of volunteers -- must face from time to time.

Liability for the Actions of Volunteers
Our Wisconsin saga does not involve comp coverage for the volunteer (although she may opt to file a comp stress claim, after all she has gone through!). What's at stake is liability for the actions of a volunteer. In this case, the insurance policies appear to explicitly include volunteers. In any event, I would surmise that the same issues arise here as with independent contractors: who controls the work? If the employer controls how the volunteer work is carried out, I expect that liability will follow. In the case of the Wisconsin church, you could argue that they have an obligation to check the driving records of any volunteer who drives as part of their donated work. This is a can of worms, indeed!

One of the best summaries of the issues for churches can be found at a United Church of Christ website. In the meantime, institutions relying on the services of volunteers to carry out their work should keep in mind the first law of capitalism: there is no such thing as a free lunch.

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February 22, 2005


During the recent tight job market, employers were calling the shots, but in 2004, turnover exceeded 20% for the better part of the year. In addition to some of the obvious problems created by high turnover - reduction in productivity and quality, increased costs for training and recruitment, decrease in morale - a very significant problem we see with high turnover is the effect on safety. Newer employees are at higher risk or injuries on the job. They don't know the job as well, they don't know the dangers, and they are generally eager to please a new boss.

A recent article in Business Week discusses ways to motivate and retain your star performers. George's Employment Blawg has more tips and links to other news stories on turnover and the steps that several large employers are taking to retain staff. There are excellent suggestions for improving retention in both sources. We particularly liked these tips from Cracker Barrel:

"Regardless of the task, the common thread for employees is a need to be valued and to be part of a larger whole." "Shared expectations and how it feels to be part of the culture and how we support each other is a huge part of creating a sense of belonging and sense of affiliation."

Estimate your company’s turnover, absence costs

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February 19, 2005


It's the weekend, so we couldn't resist bringing you this rather unusual story of two fired employees, a gorilla, and a million dollar employment lawsuit. We would like to think employers don't need to be told these things, but apparently some people need things spelled out in some detail: it's not a good idea to ask your employees to disrobe in front of the gorillas. No, not even when the gorilla in question is celebrity "talking" ape Koko. In fact, unless you can prove that it is an essential function of the job, it's generally a bad idea to ask your employees to disrobe in front of anyone, beast or otherwise. And another pointer. OSHA takes a dim view of things when you store gorilla urine in the same refrigerator where your employees keep their lunches. There are probably other lessons in this story as well, but those seem to be the two big take-aways.

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February 18, 2005


You know that workers comp is a problem when the so-called mainstream media begin to take note. Normally, workers comp is a topic relegated to the trade journals or the deepest nooks and crannies of the business pages in the daily news. Contrast this with the early 1990s, when headlines screamed about runaway costs and story after story included tales of employers closing shop or moving operations from one state to another due to the burdens of workers compensation.

This month, Forbes features a story about current workers comp woes, and it is interesting to note that this story entitled Workers Con deals primarily with the proliferation of premium fraud.

The story cites a number of examples: a FL PEO that pocketed $600 million in premium leaving employers and their employees uncovered; a California janitorial firm that underreported the number of employees by several hundred; a Texas janitorial firm that played a shell game by switching employees between a number of companies; an Illinois temp service that misclassified warehouse workers as clerical workers, and a California PEO that hid more than a million dollars in wages by calling them "partnership distributions."

Is employer fraud actually more widespread in reaction to rising costs, or are state regulators just taking a harder look now that reforms have wrung the fat out of other aspects of the system? Hard to say for sure since fraud statistics - both on the employer and the employee side - are often difficult to quantify and generally rather squishy at best. The Forbes article says yes, if the rising number of suits filed by state and private insurers is an indicator.

One thing is for sure - fraud schemes hurt us all: the injured employee is often left without recourse or forced to bring suit to pay for medical care; the honest employer pays higher premiums as insurer costs "trickle down." In addition, fradulent employers often enjoy an unfair competitive edge. By illegally evafing a cost of business tht can be substantial, fraud perpetrators can offer lower prices in competitve or bidding situations.

Employers that hire contract workers through a third party, such as through a temp agency, or a leasing company, and employers who purchase workers comp packaged in a bundle of other services, such as in a PEO, need to be particularly alert to the issue of coverage lest they find themselves holding the bag. The California Department of Industrial Relations offers an employer tip sheet on ensuring the legitimacy of workers comp coverage. It is worth kicking the tires before cementing any arrangements: check business licenses and verify coverage with a local insurance authority.

Florida uninsured employer jailed for fraud after two deaths

West Virginia is cracking down on deadbeat employers

Ohio getting tough on premium compliance

Insurer insolvencies, guaranty funds, and joint and several liabilities between temp staffing agencies & contracting employers

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February 16, 2005


Well, not really. But have you ever really examined how your company is viewed by an insurance underwriter? Conventional underwriting is primarily a look in the rearview mirror: the assumption is that companies with low historical losses will have low losses going forward. I don't think it's quite that simple.

In an article written for the Journal of Workers Compensation, I take a look at underwriting from two perspectives: the conventional approach, and a decidedly "out of the box" look at the best indicators of danger ahead.

Here are a couple of examples of conventional and unconventional underwriting:

A masonry contractor with a relatively clean loss runs and a low experience mod appears to be a great risk. However, the business is so successful they double the workforce in less than two years. It turns out that they have trouble finding good people. They hire strangers who transform the work culture. Their losses go through the roof and their insurer is left holding the bag. Conventional underwriting was unable to detect the problems ahead.

A small manufacturing company has a clean loss history, but the average age of their workers is in the mid-50's. Many of the workers have over 15 years with the company. Is it a good risk? I would be concerned about the lack of transferable skills among the workers, along with the propensity for older bodies to break down. Show me a production line worker with 15 year's experience and I'll show you an MRI full of red flags. I would want to know details of the work culture, the proposed hiring and the ergonomics of this workplace before I made any final underwriting decisions.

What matters most in determining relative risk certainly includes but is by no means limited to past performance. I like to know what's ahead. Any company planning to expand or reduce their workforce might be a marginal risk. In the article I explore some of the factors that seem to be the best prognosticators for success. Your feedback -- indeed, the feedback of our readers who are directly involved in underwriting -- is most welcome.

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February 15, 2005


Spitzer probe expands to managed care firms
The New York Attorney General's office is expanding its inquiries to encompass managed care practices. At Managed Care Matters, Joe Paduda reports that Concentra has received a subpoena. In his post, Joe discusses some industry practices that might be under scrutiny, although he rightfully notes that this is not to infer that Concentra engages in such practices � Concentra may simply be a target of inquiry because it is the largest workers compensation managed care firm.

New York Security Fund at risk
State legislators are meeting today to address the impending crisis in the New York Workers' Compensation Security Fund. This fund is designed to cover the claims of insurers that have become insolvent. Without some emergency measures being taken, it is expected that funds will be depleted by March 1, leaving the medical and wage-replacement benefits of some 7,500 claimants at risk. According to the Insurance Journal, "The administration has asked that $50 million be funneled into the workers' comp pool from the property casualty pool. It is also recommending that the current 1 percent of written premium assessment on workers' comp carriers be raised to 2 percent to provide additional monies."

Florida exclusive remedy ruling
Roberto Ceniceros of Business Insurance reports on a ruling by Florida�s 5th District Court of Appeal that extends the exclusive remedy principle to third party administrators (TPAs). Essentially, exclusive remedy means that in exchange for providing timely medical and wage replacement benefits to any employees injured at work, the employer will be free from suit. Barring some few exceptions such as in cases of employer misconduct, workers comp is the sole or exclusive remedy for the injured worker. In Protegrity Services Inc. v. Theresa Brehm (PDF), the court noted that immunity from suit is an essential element of the workers' compensation system, and extended the same immunity that an employer or insurer would be afforded to the TPA.

State health facts
Diane Pfadenhauer at Strategic HR Lawyer points us to State Health Facts, a great resource hosted by the Kaiser Family Foundation. The site provides data on more than 450 health topics. It includes a 50-state comparison of demographic, economic, and health-care information.

RIMS reminder
Are you planning to attend the RIMS 2005 Annual Conference in Philadelphia from April 17-21? If so, you only have a few days left for a discounted registration rate. The early bird cut-off date is February 18.

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February 14, 2005


There's been a lot of publicity lately about private disability insurance. Most of it's negative, stories about insurance companies denying coverage or making claimants wait a long time to collect benefits. A typical article recently appeared in the New York Times (available by subscription only). As I think about it, writing disability insurance -- especially "own occupation" policies which cover people who can no longer perform their current jobs -- is risky business indeed.

Workers compensation is disability coverage for work-related injury and illness. In virtually all states, you are covered if you cannot work. If you can return to any productive employment -- whether or not you can return to your original occupation -- your indemnity benefits are reduced or eliminated. Indeed, in some states, if you have an "earnings capacity," your indemnity benefits can be reduced -- even if you are out of work. If you need training in order to find work within your permanent, work-related restrictions, you participate (sometimes involuntarily) in your state's vocational rehabilitation program.

"Own Occ" Coverage
Some private disability policies have a much narrower focus: you collect benefits if you can no longer perform your original job. In other words, being employable is not the issue. You have to be able to perform your current job. In the above article, a dental hygenist suffered carpal tunnel and other ailments that prevented her from returning to her preferred profession. Under workers' comp, she would be expected to train for some other profession. Under "own occ" disability coverage, which she purchased at her employer's urging, she may be able to collect 60% of her average weekly wage up until retirement age. The policy pays if you cannot perform a specific job. This is a very different take on the meaning of "disability."

Perhaps because of the years of training required to become a professional, private disability insurance is common in the medical field. There are websites devoted to the preservation of income for doctors. Under "own occ" coverage policies, a surgeon who can no longer perform surgery could collect a substantial amount of money for many years, depending upon how the policy is worded. The fact that this highly skilled individual has transferable skills that might lead him or her to become a fabulous administrator has no bearing on eligibility for benefits. For whatever reason, if the doctor cannot perform as a surgeon, his or her disability income for life is assured.

I am not questioning why a doctor would want this coverage. It makes sense. Heck, it makes sense not only for doctors, but for anyone who goes through extensive training to take on professional responsibilities. My question is on the other side: who would want to take on this risk transfer? Who would want to write this kind of business? How would you underwrite a policy where the potential payouts are huge, the definition of disability is exceptionally broad and the premiums relatively small?

"Any occ" Coverage
I am suggesting that the risks of writing "own occ" coverage are too open-ended for my tastes. It seems based upon the peculiar premise that we were put on this earth to do one specific thing only. "Any occ" coverage seems more sensible: if I am disabled from working, I collect benefits. If I can return to some productive work, these benefits are reduced or eliminated. The goal should be to keep people active and productive. Under "own occ" policies, we actually encourage disability, by limiting our vision of what people can and should be doing in the world of work.

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February 11, 2005


Frustrated with the high cost of providing medical insurance for its 12,000 employees, Quad/Graphics decided to set up its own health care system. In an article in the Wall Street Journal (available by subscription only), staff writer Vanessa Fuhrmans describes a fast growing company that was able to think way out of the box to solve an intractable problem. Quad/Graphics spends about $6,000 per employee on medical costs, fully 30% less than the average company in its home state of Wisconsin.

This is certainly not a model that most companies could replicate. You need a large concentration of employees in just a few locations. Perhaps even more important, you need a high level of trust between management and workers. Fuhrmans points out that Quad has a long history of harmonious relations between management and workers. If the workers distrusted management, they would not entertain the idea of going to management's own doctors -- not just for their own medical services, but for their entire families as well.

Quad employs its own internists, pediatricians and family practitioners. It operates its own labs, pharmacies, and rehab centers. They contract directly with local hospitals and specialists for advanced care. It is also important to note that doctors's bonuses are tied to patient evaluations and health outcomes -- unlike our mainstream medicine which values the number of contacts above all. Quad doctors have a full half hour to spend with patients, which leads, naturally enough, to a highly effective disease prevention program.

Workplace Injury
The article did not address how workplace injuries were handled, so I sent Ms. Fuhrmans an email inquiry. She responded within minutes, explaining that Quad does indeed handle many of its own workers' compensation cases. "This is where they see a lot of their savings." It makes perfect sense that workers would trust the same physicians who treat their families to manage workplace injury and illness. I would surmise that their in-house rehab facilities are quite capable of managing workplace injuries. Even though "occupational medicine" was not listed in the article as an available specialty, a progressive company with an inhouse medical capacity would naturally keep a strong focus on returning injured employees to full duty as quickly as possible.

The Quad model has been so effective, other employers have contracted with QuadMed LLC to provide in-house services. The article cites Briggs & Stratton and Rockwell Automation, both of which have asked QuadMed to operate full-service clinics for their employees in Wisconsin.

Confidentiality Conundrum
Fuhrmans points out that employees do have some concerns about privacy issues. They obviously don't want personal details about their health (or the health of family members) to end up in a supervisor's hands. Quad medical staff sign confidentiality agreements, promising to keep patient information within the clinic. Their computer systems are separate from those of the factories.

This is all well and good. But there certainly is an opportunity for ethical tensions. Here's just one example. A worker comes to the clinic with a knee injury suffered while playing hockey on the weekend. He cannot afford to miss any time from work. Should the doctor release him to regular duty? Let's assume the worker does continue at his job. What if he comes in the next day claiming that work has aggravated (or even caused) his knee problem? How should the doctor respond?

It is not difficult to envision doctors getting caught in the middle of some very challenging issues. Workers' compensation places tremendous leverage in the doctor's hands. The assumption is always that the doctor is a disinterested party. But when the doctor is in effect an employee of the same company, this may create the potential for a conflict of interest.

Finally, I wonder about the separation between Quad and QuadMed. Is the latter a "third pary medical provider" and thereby subject to lawsuits for malpractice? Federal confidentiality standards are very strict on the personal health side (and more flexible on the workers' comp side). Once again, it is not hard to imagine circumstances where the doctors are truly caught in the middle.

Quad/Graphics deserves a lot of credit for tackling the health care dilemma directly. In many respects, it's the classic American story. Faced with a huge national problem, creative managers figure out a way to solve it on the local level. From our perspective, the roots of the solution lay in the fundamental trust that existed between management and workers. There is simply no substitute for that kind of trust, which may be the most powerful collateral for change in the ever-challenging world of business.

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February 10, 2005


In the rush of events, we may succomb to the notion that we are constantly seeing things for the first time. In two previous blogs, we mentioned employers who locked exits to prevent theft after hours, leaving cleaning and maintenance crews vulnerable to disaster. Well, the most famous incident of locked exits occurred on March 25, 1911: the Triangle Shirt Waist factory fire in New York City that killed 146 workers, mostly women. The fire led directly to an unlikely alliance between the reform movement and Tammany Hall and became a catalyst for a paradigm shift in safety standards.

We heartily recommend David Von Drehle's riveting account of the disaster, Triangle: The Fire that Changed America. The paperback version was released recently and is available at your local bookseller or at Amazon.com. The book provides a compelling social history of the time. Von Drehle points out how the garment industry had changed from a home-based, free-lance business to huge factory floors in high rise buildings, with row after row of sewing machines. (The ladders of fire trucks were not tall enough to reach the workers nine stories up.) The classic turn-of-the-century "sweat shop" was not just hot -- it was the pace of work that caused the sweat. Because the owners feared theft of the popular shirt waists, they locked the doors. Or did they? That became the heart of the criminal trial that followed the disaster.

The story of the criminal trial may be the most intriguing part of the history. Begin with a trial judge who in a prior life had been a Tammany housing commissioner, fired after 20 people died in a tenement fire. His sympathies were clearly with the owners of the company. Then add a brilliant lawyer for the defense, Max Steuer, whose dazzling cross-examinations raised doubts that the doors had been locked (even though it became clear in retrospect that they had). Steuer achieved a legal triple play: his clients were acquitted of criminal negligence charges, they collected the maximum from their insurance companies and they successfully fought off all civil suits. He was the original "dream team" of one.

We are left with shadows of the many victims: mostly immigrants from eastern Europe and Italy. Not satisfied with their anonymous deaths, Von Drehle names as many of them as he can and provides a brief profile of their impoverished lives. At first, over 90 years after the event, I thought this was an exercise in futility. On second thought, I applaud Von Drehle for not allowing these victims of workplace neglect to disappear without a trace.

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February 8, 2005


The American Academy of Ophthalmology (AAO) has declared February as Workplace Eye Safety Month and they’ve compiled some resources to help drive home the point that 90 percent of all work-related eye injuries are preventable.

We didn't bring you the news sooner because last year this observance occurred in March. We were alerted of the change in months by several queries to our search engine. Sorry for any confusion.

What's not confusing, however, is how an important an issue eye safety is, and it would be just as well if heightened awareness was practiced in the workplace every month. Revisit last year's post for work eye safety resources and we've compiled some additional resources for 2005:

NIOSH - Eye Protection for Infection Control
NIOSH - Eye Safety Tool Box Talk - Instructor’s Guide
OSHA - Eye and Face protection e-tool
NASD - Eye Protection Training for Employees (in English, French or Spanish)
NASD - Eye Protection for Farmers
Madison Area Technical College - Eye Safety Bulletin (PDF)
Occupational Hazards - Don't Lose Sight of Eye Safety
Ohio State University Medical Center - Eye Safety at the Computer
Industrial Safety & Hygiene News - Eye Safety In Construction
Industrial Safety & Hygiene News - Focused on eye safety
Vietnamese - Eye Protection brochure (PDF)
Spanish - Seguridad De Los Ojos En El Sitio De Trabajo
Spanish - Protección Para Los Ojos

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February 7, 2005


Many employers have workers who are not proficient in English. They may be recent immigrants, or they may have lived in non-English speaking enclaves here in America for many years. So how can you ensure that these workers understand your safety procedures? How confident are you that they can follow your lockout/tagout procedures, or bloodborne pathogen exposures, or fall protection?

Fortunately, the world of the internet provides a wealth of resources. In what might appear to be an unlikely resource, the workers compensation fund in Utah offers a deep and well contructed library in safety materials, most of which are available in Spanish. If you have Hispanic workers who are limited English speaking, these materials could be very valuable. A quick search of the internet will provide resources in other languages as well.

One note of caution. Many immigrants are illiterate in their native language. In many countries, elementary education is considered optional and is often pre-empted by the need for children to go to work. It does no good to provide a Spanish language "hand tool safety" program to an Hispanic worker who cannot read it. And I know from my background in adult literacy programs that many adults will try to hide the fact of their illiteracy. This is a sensitive area, where a mistep by management could lead to grievances and even lawsuits.

So approach your workers with respect and care. Even if they are unable to read, they may be able to use the materials in conjunction with a family member or friend who is literate. The bottom line is relatively simple. You need to protect all of your workers by providing training and access to effective safety materials. You must take steps to ensure that your safety procedures are understood by each and every worker -- and this means providing materials that they can readily understand.

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February 7, 2005


It's been awhile since we've added new resources to the toolbar on the right. We hope to create a one-stop shop of valuable workers compensation, HR, medical, and health & safety resources for industry practitioners, as well as for workers. Here are some recent finds:

Since 1997, Pam Pohly's management guide for healthcare executives has been seeking and posting a broad array of healthcare resources, including legislative and compliance updates, professional association directories, employment search services, practice management tools, healthcare news and more. The site contains hundreds of links, including toolkits for health administrators, physician executives, HR managers and nursing managers. The glossary of managed care terms is a handy tool for workers comp managers, and the calendar of health observances is good reference for safety and wellness programs.

EconData.Net has thousands of links to socioeconomic data sources, arranged by subject and provider, pointers to the Web's premiere data collections, and a list of the ten sites they judge as being the best sites for finding regional economic data. Need to find population or demographic data or trends? Employment statistics? Labor force by occupation? Wage trends? You'll find resources at this deep site.

Interactive Tools
The Liberty Mutual incidence calculator allows you to determine your own incident rates and compare your rates to other companies in your SIC group.

American Express has an interactive hiring tool that helps you to think through the skills and characteristics you need to create a job description, and lets you generate a worksheet to use in your interviewing process, and provides questions that may be helpful in interviews.

If you are an employer in Michigan, you can use an online calculator to estimate your workers' compensation costs. This analytic tool uses " ... your work force data to provide you with a general case study looking at your potential costs. Your actual results in the "open market" will vary depending on a number of factors."

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February 3, 2005


A recent posting on WEB MD raises the specter of an ailment for the new milennium: "Blackberry thumb." The prognosis comes from hand specialists who see potential risk in the way people enter data onto their Blackberry devices.

Alan Hedge, PhD, director of the human factors and ergonomics research group at Cornell University in Ithaca, N.Y.is quoted in the article as saying "the thumb is not a very dexterous part of the hand. It is really designed as a stabilizer for pinch gripping with a finger. That is why you only have two of them, not eight. It is the fingers that have dexterity, not the thumb."

The full-size typing keyboard was designed with this in mind. The more dexterous fingers are used for quick strikes on the letter keys. The relatively clumsy thumbs are limited to striking the spacebar. You know the expression: someone is "all thumbs."

"When you switch that around (by relying heavily on the thumbs to enter data) you put a lot of strain on the thumb," Hedge says. "So if you persist in typing a lot of information with your thumbs, you risk injury."

Hence Querty keyboards may well pose a specific problem for people old enough to be developing arthritis. Hand surgeon Prosper Benhaim, MD, associate professor of orthopaedic and plastic surgery at UCLA, points out that there different types of tendinitis. One is trigger thumb. The other is de Quervain's tenosynovitis, involving the tendons on the side of the wrist right where the forearm joins the wrist. These tendons participate in controlling the thumb and are very sensitive to repetitive motions.

What's the treatment for BlackBerry thumb? "Lay off thumb typing," the experts say. Do they really believe that Blackberry devotees will agree to that?

"If people have true tendinitis, I might give them a cortisone shot," Benhaim says. "Or I might use a thumb brace, maybe. I would certainly tell them to rest it. And then to minimize the stress and strain. Do more typing on your keyboard and then sync over to your BlackBerry rather than typing longer messages on BlackBerry itself."

A Word to the Wise
Ok, we are not recommending that you give up on your Blackberry. In fact, none of the hand experts who consulted for the article has seen a single patient with BlackBerry thumb. At this point, it's all conjecture. But think back to those ergonomic videos of the early 1990s, where the symptoms of carpal tunnel were described in delicious detail. Half the viewers walked away convinced that they felt a distinct tingling in their finger tips.

So readers with Blackberry devices, how are your thumbs feeling today? If you decide that you do indeed have a thumb problem, it's probably work related. So please do us a favor. If you decide to pursue a workers compensation claim, let us know how it turns out. (Perhaps we should say, let us know how long it takes for the claim to be denied!) In any event, we will try to stay ahead of the curve on trendy diagnoses.

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February 2, 2005


Back on July 19 we blogged the issue of cell phone use while driving. Even as a few states were requiring headsets for drivers who want to carry on a phone conversation, there were studies indicating that head sets did not reduce the danger of distraction -- and accidents. Now the Journal of Human Factors (subscription required) has come out with a study that reinforces the earlier concerns. The study showed up as a news bite on my MSN homepage.

"If you put a 20-year-old driver behind the wheel with a cell phone, their reaction times are the same as a 70-year-old driver who is not using a cell phone," said University of Utah psychology professor David Strayer. "It's like instantly aging a large number of drivers." That is a scary thought!

The study indicates that cellphone distraction causes 2,600 deaths and 330,000 injuries in the United States every year.

The new study found that drivers talking on cell phones were 18 percent slower to react to brake lights. While cell phone users did keep a 12 percent greater following distance. they also took 17 percent longer to regain the speed they lost when they braked. Hence, they interfere with the all-important flow of traffic.

As we all know, a delay of mere seconds when you are traveling 75 miles an hour translates into a lot of pavement. With delayed reactions, stopping distances increase by multiple car lengths.

Once again, LynchRyan cautions employers to establish written policies on cell phone use and provide training to employees who routinely drive as part of their jobs. Prudent companies will discourage the use of driving time to conduct business on the phone. If, on the other hand, your company encourages employees to conduct work while driving, you may be liable for the inevitable driving mistakes that employees make while chatting away. It's not hard to imagine a jury imposing huge financial penalties for negligence on any company that requires its employees to "multi-task" on the road. Written policies should encourage employees to do any serious and detailed phone work at a rest stop.

The Law of Deep Pockets
Keep in mind the "law of deep pockets." Those who have deep pockets (insured businesses) attract those who do not -- in this case, members of the general public who may be harmed by your employees. Need I add that you should not be reading this blog on the screen of your hand-held device while barreling down the freeway? In this season of enhanced driving hazards, keep your eyes on the road ahead.

See also:
Driving and Talking: Are headsets the answer?

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February 1, 2005


Roberto Ceniceros of Business Insurance reports that the SEC intensified its probe of Interstate Bakeries, moving from an informal to a formal investigation of its workers comp reserves. The company employs more than 30,000 workers and is the nation's largest wholesale baker. Think Twinkies, Hostess, Drakes, and Wonderbread.

According to Columbus Business First, the inquiry began last July when the Kansas City-based company said it might have incorrectly accounted for reserves. More recently, the company filed for Chapter 11 and ousted executive staff:

"Interstate Bakeries in December removed its treasurer and senior vice president of finance after identifying a "material weakness" that allowed the $40 million workers' comp charge to go unreported for two quarters.

According to unaudited financials the company recently released, the $40 million charge accounted for most of the company's swing from a $27.5 million profit in fiscal year 2003 to a $25.8 million loss in fiscal year 2004."

$40 million is a lot of cupcakes. Reserves have been the demise of more than one company, let's hope this large employer will be able to weather the challenge. We recently discussed reserve problems in the context of a Kentucky self-insurance group (SIG) that was grossly under-reserved, and also discussed what happens to workers comp claims when an insurer defaults. This bears watching.

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