This Just In - Supremes Say You Must Have Your Own Workers Comp Coverage...

THe Supreme Court of Texas overturned an appellate court decision that will have far reaching impact on employers who hire temporary workers in Texas. As we know, in Texas an employer is not forced to purchase workers compensation insurance, they can "opt out" of the system. In this decision, the court was reviewing a case where a temporary staffing company sent an employee to their client company who did NOT have thier own workers compensation coverage. The client company directed the activity of the temporary company. During that direction, the employee was injured. According to the record, the employee sued both the temporary agency and the client company for benefits. The temporary agency did have workers compensation coverage and employer liability.

The Supreme court ruled the client company WAS NOT COVERED by the temporary agency policy.

Here's the quote:

"But even if Interim were contractually obligated to obtain workers’ compensation insurance that named Exel as an insured, or it gratuitously chose to do so, no such policy has been identified or made part of this record. Accordingly, Exel has not established that it is “covered by workers’ compensation insurance coverage” for a “work-related injury sustained by the employee,” in this case, Garza, which is a prerequisite to the application of the exclusive remedy provision in section 408.001(a).[41]"

If I were an employer and did not have workers compensation coverage for my employees, I would be very careful in hiring temporary employees. If you hire temporary workers AND direct their action while at your site, this decision could have a great impact on your operation. This case is not over in terms of whether the client company will be required to pay for the employee injuries. It is over in terms of whether Exel is covered by the temporary agency's workers compensation insurance.

Here's the complete Supreme Court decision:

Jose Garza, Petitioner, v.
Exel Logistics, Inc. and Interim Services Pacific LLC, Respondents

Roofing Contractors, Workers' Compensation Insurance and Profits

I recently published this article in the Insurance Journal.

Roofing Contractors, Workers' Compensation Insurance and Profits...Making the Puzzle Pieces Fit

Dr. Koop - Worker's Comp Can Keep Injuries Lingering

Employers have certainly believed the Workers Comp system keeps employees off work. Most of the time the employer believes it is some type of fraud, though that is rarely the case. Now, a research study in the Journal of the American Medical Association is reporting "financial incentives influence patient outcomes".

This comes as no big surprise to employers who have good employees turn into bad employee after entering the workers comp system.

Read the anlaysis of the study here:Dr. Koop - Worker's Comp Can Keep Injuries Lingering The Journal of the American Medical Association abstract can be seen here

This report and analysis seems to be clear and convincing evidence that employers who have good return to work programs established will benefit greatly. The employees of these companies will benefit as well. The end result is a happy, healthy employee who is ready to return to work. The employer benefits from a faster return to work and lower workers comp expense in the future.

What's not to like about that?

Texas House Passes Workers' Comp Reform Bill

The Texas House of Representatives has passed their version of the Workers Compensation Reform bill, House Bill 7.

A brief review of it is here:Texas House Passes Workers' Comp Reform Bill

Scranton , PA Fighting Workers Comp Increases with Back to Work Program...

Scranton Times Tribune - News - 03/27/2005 - City To Get a Little Friendlier

Four city employees, 2 firefighters and 2 policemen, have been offered alternative, light duty jobs at the city as greeters. The story refers to the four as "former employees". The city and the mayor, Chris Doherty, believe they have created a workable solution to increasing workers comp insurance costs. Some council members aren't convinced. Bill Courtright said "If someone's legitimately hurt, bringing them back just to embarrass them is wrong. I just don't know if this is the right way to do it."

I think the city of Scranton is right. Not only can they create a return to work program but they should. If they have employees who are physically able to return to work, even at a reduced capacity, it will lower the costs of the insurance. The taxpayers are paying for these people to be off-work. They should demand that the city make the best use of all of its resources.

The councilman is off-based believing the only reason to bring people back on a light-duty basis is to "embarrass" them. Being a greeter at city hall is a far cry from being a policeman or fireman but that does not reduce the city's obligation to the public to reduce costs and make the best use of taxpayer funds.

Workers Compensation and Older Workers...

Lynch Ryan has some excellent thoughts on the trend of hiring older workers and the potential risks it brings concerning workers compensation. Read the article here.

"Sweeping" Changes in the Texas Workers Compensation System...

The Texas Senate passed State Bill 5 yesterday. The bill is an attempt to overhaul the Texas Workers Compensation System. Chief among its objectives is the creation of a network system, similiar to group health care, where injured workers would be able to access doctors of their choice. The announcement is here.

I'll be following up with analysis and opinion.

Can Inexperienced Employees Cause Workers Comp Expenses to Increase?

The San Antonio Express-News is reporting an AP article that is making that claim. You can read the entire article here

Oilfield workers, especially entry-level jobs, are scarce. Some companies are turning to "immigrant Hispanics", according to the article.

"There may be a downside to the new wave of workers — AMI Risk Management in Wichita, which writes insurance coverage for drilling and servicing contractors, reported a big increases last year in its oilfield worker compensation claims in the Midwest.

Between 1998 and 2003, insurance premiums collected at AMI tripled as drilling activity picked up, said Ray Merz, executive vice president. But during the same time, claim losses quadrupled. (Emphasis Mine.)

"There is a correlation between the lack of experience and the lack of training and a higher frequency of claims," Merz said. "In other words, workers with less than six months of experience have a higher accident rate."

The lesson for all employers is be careful of who you hire. When you do hire someone, make sure they have the proper training to the job. It's much less expensive that way.