1. Identify and remove disincentives

An otherwise sound return-to-work program can be sabotaged by a program design that works against the intended goal. When out-of-work employees receive more income and benefits than they receive while working they may have an incentive to stay out of work as long as possible.

Wage-continuation and supplemental-income programs. Under wage-continuation programs, the employer pays 100 percent of salary in lieu of workers' compensation for injuries of short duration. Supplemental income programs pay additional wages to an employee on workers' comp, so the employee doesn't lose any money. Because workers' compensation is tax-free, grossing up means the worker often receives more than 100 percent of pre-injury earnings.
Disability benefits or unemployment compensation. Some employees can receive short-term disability (STD) in lieu of salary after six weeks or qualify for unemployment compensation. It's possible the employee may be able to collect workers' compensation and STD or unemployment benefits.
Pension and retirement plans. Plans that don't allow for offset of workers' compensation benefits may let an employee receive workers' compensation benefits and a full pension. A disabled worker may then decide it's more beneficial to receive permanent partial or full disability.
Open-ended job return rather than a specific timeframe. Holding a job open indefinitely sets the wrong expectation for the employee. There may be benefits to staying home, such as saving on commuting, childcare and other work-related costs. A specific time limit should be set, while being sure to comply with the Americans with Disabilities Act and the federal Family and Medical Leave Act, as well as any state leave laws.
Vacation and sick time. Employers should not allow vacation or sick time to accrue while an employee is on workers' compensation because it enables the injured worker to stay out of work longer.

Special Reports /

6 ways to improve return-to-work incentives and cut workers’ comp costs

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