A properly managed workers' compensation program involves a lot more than merely shopping for the best price. Golden Pacific fully embraces ALL the factors that can impact workplace safety and reduce injuries, which of course results in tremendous financial savings over the long run. We have written and produced an exclusive copyrighted manual which talks about many different topics, some of which you may not have considered have an impact on workers' compensation costs.

Included below are a few excerpts from that manual. Shown first is the entire Table of Contents. After the Table of Contents are excerpts that have proven to be the most useful to our clients. If the Table of Contents displays the Chapter Title in blue, the pages are included and you can jump directly to them by clicking on the title. Chapter Titles in black are not included here but can requested by contacting us.

The Power of Knowledge How this handbook will benefit the business owner

Hiring Good Employees

Employment Applications How to evaluate and hire good employees

Drug Testing The Do's and Dont's

Pre-Employment Physical Examinations An important process that is often overlooked

How to Treat Employees

Accountability

Making better employees by making it clear what's expected of them

What Employees Need

How to keep employees productive and give them what they need

Employee Benefits Group Health/LTD/Pre-paid Legal Services/Employee Assistance

Employee Layoffs Advice on what to do if you need to reduce your work force

Safety in the Workplace

Injury and Illness Prevention Program (IIPP) What is Cal-OSHA and why you need an IIPP

The Eight Essential Elements What are they and what do they mean

Safety Incentive Programs There is a better way

Cal-OSHA Compliance

Cal-OSHA Response Service How to survive an OSHA inspection

California's High Hazard Employer Program What it means to you as a business owner

Workers' Compensation

History of Workers' Compensation

Workers' Compensation Benefits

Controlling the Cost of Workers' Compensation

Choosing and Communicating with the Medical Provider The importance of pre-designating a medical provider

Health Care Organizations (HCOs)

A medical control alternative

Return to Work Program RTW) Understanding the importance of having a RTW Program

Occupational Injury or Illness

First Aid What are first aid claims and how to deal with them

Occupational Injury or Illness Forms

Workers' Compensation Law

Litigation

Denying Claims/Terminating Benefits

Loss Control

Loss Control

Loss Control Services Employee safety and health management

Employment Practices Liability Insurance (EPLI) What it means to you as a business owner

Other Risk Control Techniques

Managing Open Claims

Managing Open Claims

Recalculating and Reducing Your Experience Modification

Introduction

The Power of Knowledge

Return to top "One has now come to see a new class structure divided by those who have information and those who must function out of ignorance. This new class has its power not from money, not from land, but from knowledge"

-Jon Kenneth Galbraith Renowned U.S. Economist

Golden Pacific Insurance Services Inc is providing this "Guide to Improving Employee Relations, Safety & Workers' Compensation" to help you, our valued client, acquire the power of knowledge. This guide will help you to manage one of the most important, yet typically less prominent aspects of your business... your work force.

Consider a recent study of the typical U.S. employer and their average 100 employees: 10% of the workers could be classified as excellent performers and 10% problem performers, the remaining 80% fall into a typical performer category. Such characteristics as individual knowledge, skill, motivation, physical ability, honesty and initiative were included in the classification criteria.

Hiring Good Employees

Employment Application

Return to top Employment applications are helpful and often underestimated tools for evaluating a potential employee's character, experience, skills, training and limitations. Though we will not attempt here to cover all aspects of developing a useful, legal application, we will stress some of the most important points.

In order to protect yourself legally in the future and to assist you in accomplishing your goal of obtaining more information about the applicant, we recommend that your application include several provisions serving as independent agreements between the company and the new employee.

What We Suggest:

• Require prospective new hires to fill out an Employment Application

The employment application should ask only for information that has a bearing on the job. The candidate is informed that the references listed will be called and if they cannot or will not verify the legal questions which will be asked, no job offer will be made.

• Require the employee to provide three verifiable references.

Checking references is one important component in the applicant screening process often overlooked by employers. You should insist on reference check information to allow you to verify the information given on the application and assist in measuring the quality of the applicant's past performance. These inquiries should be directed to past supervisors who can provide first hand information.

• Inform the candidate that the references listed will be called and obtain authorization to check all references.

Let the candidate know if their references cannot or will not verify the legal questions which will be asked, no job offer will be made. This will help protect you from a claim that the applicant's privacy was invaded. It will also be easier to gain information from former employers if they are aware that their former employee has authorized disclosure to you. In addition, courts have held employers liable for negligent hiring for certain acts of their employees that the employer should have known might occur even though there is no law requiring that you check a potential employee's references. Even if the applicant's former employer refuses to give you any information, document that you attempted to check the applicant's prior work history.

• Obtain an initial signed statement that any future employment will be on an at-will basis and that any contrary representations must be signed in writing.

• Obtain a signed statement that all answers given by the applicant are true and any false information or omissions will be grounds for rejecting the application or termination if hired. Recent California court decisions have allowed employers to use the submissions of false information on the employment application as a defense in wrongful termination lawsuits.

Each of the above provisions should be signed separately by the applicant in a space under each paragraph. By making these special provisions, it will be less likely that the applicant can later come back and claim anything to the contrary regarding the above subjects. Your Golden Pacific Insurance Services team has developed a reference check protocol. We can provide these materials to you.

Drug Testing

Return to top People do not check their substance abuse problems at the door when they enter the workplace. Seventy percent of all illegal drug users are employed. The cost to American society is estimated at over 100 billion dollars per year in reduced and lost productivity. Employees caught up in substance abuse tend to be absent from the job up to 16 times more often, claim 3 times as many sickness benefits, and file 5 times as many Workers' Compensation claims.

This section will stress the importance of conducting pre-employment drug screening for job applicants. The following is intended only as a guide to some of the basic rules and case decisions concerning drug screening currently within the state of California. We urge you to consult with your labor law attorney to assist in developing any specific plan or policy that you develop regarding this subject.

For your reference, California is one of about fifteen states who have passed drug testing laws. California on the other hand is one of seven states whose constitutions guaranty an individual's right to privacy. This guaranty places restrictions on laws and regulations applying to alcohol and drug testing programs.

What Can you Do

Generally, employers can require an applicant, as a condition of hiring, to successfully pass a pre-employment examination that includes a drug screening. The California courts have drawn a distinction between the rights of a job applicant and the rights of existing employees with regard to drug testing.

Court cases have held that the State Constitution affords less protection to applicants than to employees. Case law has said that if the intrusion on privacy is substantial, it must be justified by a compelling interest. The courts have ruled that there is a compelling interest for testing applicants, but the right to test current employees for drugs and alcohol is unclear.

It appears that where an employer who has a "reasonable suspicion" that an employee is under the influence while on the job, requiring a drug test may meet the "compelling interest" test needed for justifying the requirement.

Reasonable suspicion must be justified by specific objective facts and reasonable inferences drawn from those facts. This may include the individual's inability to respond to questions, the smell of alcohol on the breath, etc.

California courts have upheld post-accident testing where the employer has shown reasonable suspicion that the employee involved in an accident was under the influence of drugs/alcohol or in instances where the accident is of a serious nature.

Your Golden Pacific Risk Control consultants strongly recommend requiring drug testing for pre-employment but post-offer job applicants. As part of your goal for creating a drug free workplace, we can provide you with additional information and recommend legal professionals that can assist you in drafting your drug policy.

What You Shouldn't Do

With very few exceptions, random drug testing is not allowed in California. Case law has shown that random testing is limited to those employees involved in specific, narrowly defined job classifications or professions that may be characterized as part of a regulated industry where the positions are critical to public safety or the protection of life, property or national security. An example would be any employer subject to DOT regulations. If you have questions about this requirement, consult your Golden Pacific Loss Control Representative.

Physical Exams for Job Applicants

Return to top Many employee injuries are rooted in an individual's inability to meet the physical demands of a given occupation. It may be that the individual does not have the strength to perform the necessary tasks, or cannot physically sustain performing a task repetitively without experiencing fatigue. Perhaps a pre-existing injury or condition makes an individual vulnerable to its aggravation.

As an employer, you have the right to evaluate job applicants to determine whether they can meet the "essential functions" necessary to perform the job. A job function may be considered essential if it constitutes the fundamental job duties of the position or if the reason the job exists is to perform that function.

An employer may require an employee to undergo a physical examination upon commencing employment after a job offer, but may condition the offer on the successful results of the exam. If the employer chooses to conduct physical exams, such examinations should be required of all entering employees in the same job category.

The employer must pay for the exam and may not single out older workers for physical exams as a continued condition of employment. Consistent with the requirements of the Americans with Disabilities Act, a medical examination may not be required for the purpose of determining whether an individual has a disability or the severity of a disability.

What We Suggest:

We recommend that you ask job applicants to undergo a physical exam and pass it as a condition of employment. It is imperative for you to determine the essential functions of the job both as the criteria for deciding the ability of a person to perform the job and as a defense against any subsequent claim of discrimination. A pre-employment physical exam may reduce discrimination claims because it eliminates applicants who are physically unable to perform important job functions.

In order to accomplish this goal, you should maintain current, detailed job descriptions setting forth each important job function of each position. Job descriptions can be used to inform the medical examiner of the essential physical requirements of the job so that an appropriate, simulation/function-type exam can be developed. Also, by creating and supplying job descriptions, you will be establishing a relationship with an industrial clinic which is important if the employee is injured. In this case, the treating physician can work with you and your job descriptions to determine suitable modified work for the injured employee relative to the scope of work he/she normally performed. (The benefits of pre-designating a medical provider and determining suitable modified work are explained in detail in "Controlling The Costs" Section G.)

We recommend that you combine a pre-employment physical function exam with a drug screen for all applicants. The average cost for both is in the $75 range. Your Golden Pacific Risk Control Consultant has resources to assist you in implementing a program.

How to Treat Employees

Employee Benefits

Return to top Employee benefits are a valuable enticement for attracting, hiring, and keeping good employees, and they are also valuable in terms of reducing costs for the employer. Keeping your employees happy and well cared for with excellent benefits is a win/win situation for everyone.

Group Health

Increasing health care costs has become the concern of almost everyone... government, labor, employers, and consumers. As a business owner, having healthy employees is an important part of doing business. Offering your employees a Group Health plan is a method of ensuring that they seek medical treatment for themselves or family members in a reasonable amount of time. A health plan gives employees a cost-effective way of maintaining health costs when being treated for any injury or illness. Studies have shown that employers who do not offer Group Health pay higher Workers' Compensation costs, because employees may try to use Workers' Compensation benefits for a non-work related injury or illness, also increasing fraudulent claims.

Group Long-Term Disability

The purpose of Long-Term Disability (LTD) insurance is to partially (and sometimes totally) replace the income of employees who are unable to work because of a sickness or accident. This insurance helps minimize the potential for an employee feeling that they must file a Workers' Compensation claim if they will be out of work for a period of time. Group LTD offers the employee an income flow if the employee becomes incapacitated due to work-related or non-occupational injuries/illnesses. The cost of group LTD is surprisingly inexpensive and is worth considering.

Pre-Paid Legal Services

Pre-Paid Legal Services plans are designed to meet the most common legal needs encountered by employees and their families. Plan benefits emphasize preventive legal care to help keep minor legal problems from becoming serious or financially devastating.

Your employees' legal problems are costing you money in terms of:

• Absenteeism
• Reduced productivity
• Increased health insurance costs

Employees simply do not perform well when troubled, distracted, or under stress. Personal problems can seriously impact a company's overall profitability. Studies show that employees with legal problems usually:

• Have an absenteeism rate five times higher than average
• Use their medical benefits four times more than average
• Use sick leave twice as often as the average employee
• Experience a substantial reduction in their productivity

Most people make decisions involving legal matters based on cost rather than need, When your employees have access to a top rated attorney for most their legal needs, without the worry of cost, both stress and absenteeism will be reduced. Your employees will benefit and so will you.

Employee Assistance Program (EAP)

An EAP is an excellent benefit for the employees and the employer. This type of program is typically a 24 hour per day, 7 days per week resource for employees with a range of personal issues, such as family problems, legal problems, financial problems, as well as problems with co-workers. The confidential nature of the program assures the employee that they can deal with these issues without the employer's knowledge. The advantage to the employer is that the supervisor/manager can easily refer an employee to the EAP toll free number and not feel obliged to "help" the employee with their personal problems. These programs are quite reasonable in cost for the employer.

Golden Pacific has the ability to assist you in all of these areas. Please contact your Representative for a cost benefit analysis of your specific needs.

Employee Layoffs

Return to top Employee layoffs sometimes lead to an influx of injury claims submitted by those affected. Typically, the injuries alleged are of the cumulative trauma type. The underlying cause of many of these claims is the employee's perception that the dismissal process was harsh and punitive in nature.

Also, the apprehension of not knowing what course their individual financial situations may take motivates many to retaliate against the employer for Workers' Compensation benefits. Eighty percent of all cumulative injury cases reviewed by Golden Pacific claims examiners are being litigated. Of this number about 70% are by employees who are unemployed either by being laid off, or terminated. The following are some suggestions that you may implement in the event of a pending layoff.

What We Suggest

Get advice in advance. Designate a manager/supervisor to be responsible for over-seeing the layoff. Have that individual contact your Golden Pacific representative and we will coordinate with your Workers' Compensation insurance claims examiner to discuss the planned layoff in advance.

Give those affected by the layoff an exit interview. During this interview, information regarding benefits, referral/resume assistance and severance arrangements should be discussed. Also discuss whether or not the employee has had any undocumented injuries or illnesses related to their employment. This response should be documented with the employee's signature as part of the exit interview process. You may consider providing a safety incentive severance bonus in some monetary amount (paid by separate check), for those who are not reporting an injury.

Assist the employee in obtaining unemployment benefits. This might include escorting the laid off group to the Employment Development Department or arranging for a representative from EDD to come to your facility and conduct an in-house filing for benefits.

You should demonstrate sincere sensitivity to the employee's plight and render assistance in helping the individual through this transition period. Though you do not have the legal right to require the employee to sign exit interview documents, you certainly have the right to request that they do so as part of your attempt to assist them.

Safety in the Workplace

Injury and Illness Prevention Program

Return to top Taking risks is part of doing business, but risking the safety and health of your employees is not worth the gamble. Accidents cost money. Business owners now realize the need to control Workers' Compensation costs. In order to reduce the costs and risks associated with workplace injuries, businesses/companies need to address safety and health issues along with production.

It's The Law

OSHA is an acronym for Occupational Safety and Health Administration. It is part of the US Department of Labor and was founded in 1970 to address concerns related to employee safety and health. The Occupational Safety & Health (OSH) Act (which established OSHA) applies to most employers, the most notable exception being federal and state employers. States are allowed to administer their own safety and health activities as long as they meet OSHA's requirements. In addition, the act authorized the enforcement of the standards it developed. It also encouraged and offered assistance to all the states in their efforts to assure safe and healthful working conditions.

Cal-OSHA is the government entity that regulates workplace safety in the state of California. In this state, the law (Labor code section 6400) requires every employer provide a safe and healthful workplace for his/her employees. Title 8 (T8) of the California Code of Regulations (CCR) requires every California employer to have an effective Injury and Illness Prevention Program in writing. The program must be in accordance with T8 CCR Section 3203 of the General Industry Safety Orders. Additional requirements address specific industries, i.e., Construction, Petroleum, Ship Building, Ship Repairing, Ship Breaking and Tunnels.

It is important to note that Section 3203 is a component of the General Industry Safety orders. There are other standards and regulations that may apply to your business. Your Golden Pacific Insurance Services Risk Control Consultant can help you identify any other applicable standards and guide you in implementing them.

The Eight Essential Elements

Return to top There are eight elements mandated for an Injury and Illness Prevention Program (IIPP), which are described in more detail on the following pages. They are as follows:

1. ASSIGNMENT OF RESPONSIBILITY The identity of the person or persons with the authority and responsibility for implementing the program.
2. COMPLIANCE A system of ensuring that employees comply with safe and healthy work practices
3. COMMUNICATION A system for communication with employees in a form readily understandable by all affected employees on matters relating to occupational safety and health.
4. HAZARD ASSESSMENT A procedure for identifying and evaluating workplace hazard including periodic inspections to identify unsafe conditions and work practices.
5. CONTROL Methods and/or procedures to correct unsafe or unhealthy work practices and conditions in a timely manner.
6. ACCIDENT INVESTIGATION A procedure to investigate occupational injuries and illnesses.
7. TRAINING AND INSTRUCTION Establish training and instructional programs.
8. RECORDKEEPING Maintain records of the steps taken to implement and maintain the program.

1. Assignment of Responsibility

In any company regardless of size, top management has the ultimate responsibility for safety. Management is obligated by law to provide a safe and healthy workplace. In order to effectively reduce injuries, management must actively participate in the establishment and administration of the safety program. This participation should include strong support for policies, procedures, and incentives that will ensure that employees work in a safe and healthful manner. Executive management will rely on the involvement and participation of all management representatives to fulfill their individual responsibilities in the administration, coordination and implementation of the safety and health program. It is important that management identify the person or persons name(s) and/or job title with the authority and responsibility for implementing the program. Management must also clearly state the safety responsibilities of the Safety Coordinator, Supervisor and employee.

2. Compliance

The compliance section of the IIP Program addresses in writing the system your organization will utilize to ensure that all employees comply with safe and healthful work practices. This includes safety training of new and existing employees. Supervisors are paramount in the success of this section. It is important that they properly train new employees and let them know of the disciplinary action that will be taken if they cannot comply with safety regulations. Below are examples of what supervisors should cover with each new employee.

3. Communication

It is significant to note that communication with employees on matters of safety and health is an ongoing issue. It is important that employees understand that an unsafe work environment will not be tolerated. As a business owner, you are responsible for establishing a system for communicating with employees about safety and health matters. The most important part of this section is establishing the Code of Safe Practices. This is key to the enforcement of the safety program. Each employee has to read the Code of Safe Practices and sign an acknowledgement form that they received it. Communication also includes a system for encouraging employees to report any hazards without fear of reprisal.

This system must be in a form readily understandable by all affected employees. All safety communications, whether it be safety meetings, posters, training, etc., must be in a language that the employee understands. If the employee cannot read, then the information must be orally communicated in a language they understand.

There are a variety of techniques to comply with this section. Most organizations choose general employee meetings to comply with this standard. It is more a matter of being receptive to change and trying a variety of different things to identify which options will work best for you and your operations. Some examples include but are not limited to the following:

• Employee Recognition: Monitoring performance is a constant reminder that safe work habits should be practiced at all times. Proper safety practices will result in better working conditions for everyone. Each supervisor is responsible for monitoring employee performance. Whenever an unsafe practice is observed it should be brought to the employees attention immediately. On the other hand, when an employee is observed making an effort to approach a problem in a safe manner, a gesture of recognition and approval should be made immediately.
• Safety Awards and Incentives: This type of communication works best with strong support from upper management. These programs are designed to stimulate employee interest and recognize special achievement and personal contributions to the safety program and concepts. See the next section, "Safety Incentive Programs," for more details.
• Employee Safety and Health Suggestions: On occasion, employees do not notify anyone of impending danger or hazards on the job. This may be due to a fear of reprisal or rejection or lack of encouragement by their supervisor. Having an informal and, when desired, anonymous method for reporting unsafe conditions will provide another means for a timid employee to inform the organization of important safety information.

4 & 5. Hazard Assessment and Control

In this section, we will address two related elements of the program, conducting periodic inspections and taking corrective action.

Establishing a plan for the systematic recognition and control of work place hazards is the first step in complying with this section. It is the responsibility of every employee to assist in the identification of hazardous conditions or unsafe actions of employees. These are also key areas of responsibility for supervisors in conducting his/her daily duties.

There are three main objectives for this section:

1. Eliminate or control unsafe acts or conditions before they result in accidents or exposures that may produce injury and/or damage.
2. Stimulate regular employee hazard detection and control activity.
3. Provide a mechanism for employees to formally report hazards and to make safety recommendations.

The above three objectives are accomplished by setting a minimum action standard. This means that, at least monthly, the actions listed below will be incorporated into all supervisors work activities:

• Observe employees performing their job/task, record any unsafe acts and take corrective action.
• Make a survey of work areas, machines, equipment or other elements to identify any unsafe conditions and take the appropriate hazard correction action.
• Record and act on any unsafe acts or conditions brought to their attention by others.

Corrective action must be taken when any unsafe act or unsafe condition is observed. The hazard must be eliminated or controlled immediately. If the hazard cannot be immediately eliminated or controlled, then the action necessary for completion must be documented with a date for completion. It is important to note that if there is imminent danger with any job or machine, the hazard must be immediately corrected before work continues. If it can not be immediately corrected then the work or job must stop and all employees removed from the area.

A safety inspection form must be developed and used during monthly inspections. The form must be completed in its entirety. Sometimes outside expert counsel is necessary. Golden Pacific Loss Control Consultants have the knowledge and expertise to assist you and ensure compliance.

6. Accident Investigation

The purpose of an accident investigation is to identify those unsafe conditions and acts which contribute to injuries in order to propose solutions for accident prevention. In many ways, an accident investigation resembles a police investigation of a crime. It is important to check the scene, interview witnesses and ask a variety of questions. There is, however, one big difference between a workplace accident and a crime investigation. We are not looking for a criminal to assign blame. We are finding out what happened, why the accident occurred, and how to prevent recurrence.

Accident investigations are an invaluable tool in controlling losses. Each accident must be considered a total loss unless its true cause is objectively determined and all contributing deficiencies are corrected. Thorough investigation, reporting, recording and corrective follow-up of each incident/accident can be time consuming. However, putting forth the necessary time and effort to prevent the recurrence of an accident is an invaluable investment that will pay compounded benefits to employees and management as the number of accidents decreases. Consistent proper investigation can be of significant value in reducing fraudulent claims.

All accidents or "near miss" accidents should be thoroughly investigated by the employee's immediate supervisor and then reported to the appropriate person within 24 hours, regardless of whether or not they result in injury. A written report should be completed and include the following:

• Injured employee's statement concerning the accident or near miss
• Statements from other witnesses
• A complete description of the accident including the type of work in which the employee was involved.
• Evaluation of unsafe conditions and acts
• Recommendations for corrective action to prevent

Golden Pacific can provide accident investigation forms. All supervisors should have them handy and be trained how to investigate accidents accordingly. Golden Pacific Loss Control consultants can also provide supervisor training on how to properly conduct a post accident investigation/"near miss".

7. Training and Instruction

The effectiveness of any safety program is directly related to the quality of employee safety training. In order to eliminate accidents, it is mandatory that supervisors thoroughly train their workers in the hazards that exist. Employees must thoroughly understand all of the hazards associated with their specific job, as well as those of the workplace. Supervisors must also ensure that their employees understand the methods of doing each job safely when such hazards cannot be eliminated. Having a properly trained work force and one that consistently follows specific safe work practices will help ensure the success of the safety program.

Job Safety Analysis (JSA) is the best method available to develop effective safety training. It is a step-by-step review of major job tasks to identify and correct the hazards that may be encountered. It is important to determine the best method to safely accomplish each job one of two ways: by implementing the proper procedures (steps), or; by instituting the necessary safeguards. In other words, you should pinpoint whether a hazard is caused by employee behavior or work conditions.

Below is a brief guideline on conducting JSA's. These procedures should be followed carefully.

Job Safety Analysis

• Break the job down into basic steps. These steps describe what is to be done in sequence. Omit details that have no bearing on the objective.
• Analyzed each step for hazards that could cause an accident. The purpose is to identify as many hazards as possible, whether produced by employee behavior, the working environment, or connected with the mechanics of the job,
• Develop ways of eliminating the hazards and potential accidents associated with each step so that each step of the entire job can be done safely and efficiently. There are four ways in which this can be handled:

* Eliminate the process or operation, or provide a substitute action which can be done without the hazard, or;

* Isolate the process or operation to eliminate or minimize the hazard, or;

* Provide guards or control devices to eliminate or minimize the hazard, or;

* Provide personal protective equipment and enforce its use to eliminate the possibility of injury.

Once the analysis is complete, it is important to write work rules and distribute them among all the employees. The JSA's must be maintained in a file for periodic review. The written and complete JSA's them become a document to assist the supervisor in insuring that his or her employees are properly trained in the safe method of performing their jobs. This process will also define what personal protective equipment will be required to do the job safely.

8. Recordkeeping

Cal-OSHA requires that all employers keep records of the steps taken to establish and maintain their Injury and Illness Prevention Program. They must include:

• Records of scheduled and periodic inspections
• Documentation of safety and health training

The above documentation must include dates, names and all other pertinent data. The records must be maintained for at least a year.

Golden Pacific can help you develop an IIPP or review and update your current program. We can be of significant value in implementing your IIPP

Safety Incentive Programs

Return to top Experts report that recognition programs are more important now than in the past. Employees increasingly believe that their job satisfaction depends on acknowledgement of work performance as well as an ade- quate salary. This is especially true of employees who are highly interested in their work and take satisfaction in their achievements. To understand how to create a good incentive program we need to understand the importance of consequences on motivating behavior.

How Consequences Effect Behavior

Consequences (events that follow behavior) motivate behavior and related attitudes. Psychologists classify them as "intrinsic" or "extrinsic". Intrinsically motivated tasks or behaviors lead naturally to immediate, external consequences that support the behavior (rewarding feedback).

Some tasks do not provide intrinsic or natural feedback. In the case where natural consequences are insufficient to motivate the desired behavior, it's necessary to add an extrinsic or extra consequence to support or redirect the behavior. Many, if not most, safety behaviors fall into this category.

The strongest consequences for motivating behavior are "soon, certain, sizable, and positive". Most employees work diligently for immediate, probable and large positive reinforcers or rewards, and work frantically to escape or avoid penalties.

The strongest consequences for motivating behavior are "soon, certain, sizable, and positive". Most employees work diligently or immediate, probable and large positive reinforcers or rewards, and work frantically to escape or avoid penalties.

This helps explain why safety is a struggle in many workplaces. Safe behaviors are not usually reinforced by soon, certain, sizable and positive consequences. In fact, safe behaviors are often punished by soon and certain negative consequences, including inconvenience, discomfort, and slower goal attainment.

Where We Go Wrong:

Eighty to ninety-five percent of accidents are caused by unsafe behavior. Behavior is what a person does or says, as opposed to what they think. Incentive/reward programs for occupational safety must specify behavior, while most do not. Employees are rewarded for not having a work injury or achieving a certain number of days with- out a lost workday injury. What behavior is motivated? Not reporting injuries.

If having an injury endangers your reward or, worse, the reward for an entire work group, there is pressure to avoid reporting that injury, if possible. Many of these non-behavioral based incentive programs involve substantial peer pressure. These incentive programs might decrease the numbers of reported injuries over the short term, but the employer's safety program has really not improved.

These types of programs create apathy or helplessness regarding safety achievement. Your employees will develop the perspective that they must cheat or beat the system to celebrate the achievement of an injury reduction goal.

What We Suggest:

The following are guidelines to help you establish an effective incentive program using a behavioral-based approach:

1. The behaviors required to achieve a safety reward should be identified as achievable after necessary, initial training is provided to all participants. Training is the most important aspect of the incentive program to be created. It can dovetail into your Injury and Illness Prevention Program's (IIPP) requirement to identify hazards and provide job safety training. It is also necessary that participants know why targeted behaviors are desirable or undesirable and that they have the physical ability to comply with them.
2. Everyone who meets the behavioral criteria should be rewarded, with no uncertainty or chance element. The soon, certain, sizable and positive consequence format of the reward should be used as a guide.
3. It is better for many participants to receive small awards than for one person to receive a big reward.
4. Awards that can be displayed and represent safety achievement are preferable to rewards that will be hidden, used or spent. Motivation is all the stronger if the forum of recognition creates a story the employee can tell to family, friends and associates.
5. Contests should not reward one group at the expense of another.
6. Groups should not be penalized or lose their rewards for failure by an individual.
7. Progress toward achieving a safety reward should be monitored and publicly posted.

Studies reveal that it generally takes a cash reward of 5-8% of the employee's salary to change behavior. Surprisingly, employees are more motivated to perform at higher levels by the thoughtful, personal recognition that signifies true appreciation for a job well done, than they are for a cash reward.

Cal-OSHA Compliance

Cal-OSHA Response Service

Return to top OSHA enforces its rules and regulations by inspecting the workplaces of covered employees. When violations are discovered, OSHA issues citations and imposes monetary fines. Below are the five main reasons OSHA will inspect your location.

• Imminent Danger
• Catastrophes and fatal accidents
• Wmployee complaints
• Programmed high-hazard inspections
• Follow-up inspections

Golden Pacific Risk Services can assist you in the event that OSHA con- ducts an inspection. We will not only teach you how to respond to an inspection, but also how to prepare for an OSHA inspection.

Prior to An Inspection

Knowing how to prepare for an OSHA inspection is as important as what to do during and after the inspection. Having a plan in place prior to an OSHA visit is the first step in being prepared.

It is important that every company have a OSHA reception team who will be prepared to deal with an OSHA inspection. This team should accompany the inspector at all times, know what to expect, and how to respond.

The following documents should be ready for OSHA:

• Injury and Illness Prevention Program
• OSHA 200 Log
• Hazard Communication Program and MSDS's
• Training records
• Safety Meeting Records
• Self-Inspection Records

Below is a list of what the company's OSHA reception team should do.

• Know whether the company wants to require OSHA to obtain warrants.
• Have equipment on hand that is in good working condition to duplicate every photograph or video, testing procedure or sampling procedure performed by the inspector.
• Be knowledgeable of previous OSHA inspections of the facility.
• Examine credentials, including those from any consultants who may accompany OSHA.
• Have a maintenance worker available to immediately make any necessary repairs.
• Remind OSHA of the confidentiality of interviews, documents, and notes, and request the photos and video tapes be labeled "Confidential-Trade Secret".
• Avoid making any statement that the inspector could construe as an admission of violating any laws or regulations.
• After the inspection, you must understand how to comply with, or appeal, an OSHA citation.

During the inspection

OPENING CONFERENCE

The inspector will review the purpose and reason for the visit (i.e. random visit, employee complaint). They will also discuss which documents they would like to review. Take the requested documents to the inspector, rather than taking the inspector to the file cabinet. Provide the inspector only with information they request. Do not offer any additional information. OSHA inspectors are allowed to make copies of the written material.

PHYSCIAL INSPECTION

The inspector has the right to take photographs, make videotapes, obtain air samples, measure noise levels and interview employees. Take notes and pictures of all the items that the inspector photographs or videotapes. As the inspection is in progress, correct the violation.

CLOSING CONFERENCE

At the conclusion of the inspection, the inspector will informally review:

• Violations (severity)
• Suggestions to correct
• Weaknesses in the written programs
• Target date for corrections
• Appeal process

The compliance officer has six months (from the date of the inspection) to provide your company with the formal citations and respective penalties. There are three types of violations- Regulatory, General and Serious. The penalties for a general or regulatory violation can be up to $7,000.00 for each violation. The penalty for a serious violation can be up to $25,000.00 for each violation. For a serious violation the initial base penalty is $18,000.00. These penalties have recently been significantly increased due to AB1127 effective January 1, 2000. (See AB1127 in the "Loss Control Activites" section, page J4.)

THE APPEAL PROCESS

If your company needs assistance in preparing for an OSHA inspection or guidance for a timely appeal, contact Golden Pacific Insurance Services, Risk Control Department.

Note: Your company will have only 10 working days from receipt of the citations for an informal conference, and only 15 working days to file an appeal. Golden Pacific can assist you in completing the necessary forms properly.

California's High Hazard Employer Program

Return to top In 1993, reforms of the California Workers' Compensation system required Cal-OSHA to focus its consultative and compliance resources on "employers in high hazard industries with the highest incidence of preventable occupational injuries and illness and workers compensation losses".

In response, Cal-OSHA created the High Hazard Employer Program (HHEP), which is designed to:

• Select employers in hazardous industries with the highest incidence of preventable occupational injuries and illnesses and workers compensation losses.
• Offer and provide consultative assistance to these employers to eliminate preventable injuries and illnesses and Workers' Compensation losses.
• Inspect those employers on a random basis to verify that they have made appropriate changes in their health and safety programs
• Develop appropriate educational materials and model programs to aid employers in maintaining a safe and healthful workplace

Cal-OSHA will select employers for this program from a combination of the following data sources:

• California Work Injury and Illness Program
• Occupational Injuries and Illness Survey
• Federal Hazardous Employer's list
• Cal-OSHA citation history
• Experience Modification Ratings (x-mod)
• Any other source deemed to be appropriate.

The HHEP's Coordination and Support Unit will send each employer selected for the HHEP a certified letter that:

• States the reason(s) why the employer was selected for the HHEP
• Requests that the employer submit to the CSU within 45 days workplace health and safety information.
• Offers the employer consultative assistance to review their health and safety program.
• Explains to employers: Recent workers compensation reforms; their duty to implement and maintain a written, effective, Injury and Illness Prevention Program.

If your organization meets any of the above criteria or receives a letter, Golden Pacific Risk Control Services will assist you in developing an action plan to address and respond to Cal-OSHA's High Hazard Employer Program.

Workers' Compensation

Independent Contractor vs. Employee

Return to top A common misconception among today's employers is that an Independent Contractor is defined solely by the IRS. A 1099 may deem an individual an Independent Contractor where tax laws are the consideration. However, the Worker's Compensation laws of our state are not as concise in their definition of an independent contractor. Many elements are relevant and taken into consideration in the event of a workplace injury.

With an increasing number of Independent Contractors in today's workforce, today's employer must be more discerning than ever. The primary criteria used to differentiate between an employee and independent contractor, relative to the Worker's Compensation laws, is whether the employer has the right of control over the work being performed and whether the work performed is an integral part of the employer's business.

Items to be considered are:

• Who determines the individual's schedule / place to work?
• Who provide tools, materials or vehicles?
• Who provides any necessary training?
• Is the work performed integrated into the operations of the employer's business?
• Must the individual personally perform work/services being provided?
• Is the individual's work continuous?
• Who controls/pays expenses?
• Does the individual responsible report to the employer?
• Is the individual in business for him/herself?
• Does the individual perform similar work/services for others?
• Is the individual subject to payroll tax deductions or a 1099?
• Does the employer have the right to discharge/terminate individual?
• Does the individual have an investment in the workplace, profit or loss?
• Does the individual maintain their own Workers Compensation Policy?
• Can they provide the employer with a Certificate of Insurance?

The Labor Code mandates that an employer with as few as one employee is required to carry Workers Compensation coverage. As illustrated above, comprehending, com- plying and staying abreast of the workers compensation laws can be challenging. In light of this, Golden Pacific Insurance Services, Inc. has comprised a team of experts in this field who are dedicated to helping you meet this challenge.

Controlling the Cost of Workers' Compensation

Choosing and Communication with the Medical Provider

Return to top Payments for medical care are one of the largest cost drivers in the Workers' Compensation insurance system. Approximately forty-five cents of each dollar collected by your Workers' Compensation carrier goes to pay doctor and hospital expenses. Choosing and communicating with your medical provider is vital to controlling Workers' Compensation costs.

Who Chooses The Clinic?

The employer has the right to direct the employee to the medical provider they have selected for at least thirty (30) days from the date the injury is reported. This includes the right to designate the physician who is to treat the injury and the institu- tion where treatment is to be given. This enables the employer to shorten disability by supplying the most effective care.

An exception to this law exists if the employee has notified his employer in writing prior to the date of injury that he or she has a personal physician. As an employer you must inform all new employees of the name of your Workers' Compensation insurance carrier, your procedure for reporting claims, and about their right to select a treating physician. This information must be provided to the employee either at the time of hire or by the end of the first pay period. A photocopy of your Workers' Compensation Reporting Poster (3550), will fulfill this requirement.

The employer's obligation to furnish treatment for an industrial injury does not arise until he has notice or knowledge of its occurrence. Reimbursement to an employee for the cost of self-procured medical treatment can be denied when insufficient notice for treatment has been given.

Pre-Designating an Industrial clinic

Pre designating an Industrial clinic(s) is integral to the success of controlling and reducing your Workers' Compensation costs. Choosing a clinic prior to an employee injury occurring will help alleviate confusion and costly delays when an injury does occur, plus you are choosing a clinic that fits your individual needs. For example, your clinic should be close to your location, well lit, be clean and have a reputable medical staff, and the necessary state-of-the-art equipment, which typifies a quality industrial medical facility.

Establishing a relationship with an industrial clinic is the first step in the medical management of your Workers' Compensation claims. This is even more important if you manage your first aid and medical only claims. The industrial clinic, and more specifically, the doctor at the clinic, plays the primary role in determining the employ- ee's medical condition, capacity to perform work and any restrictions to be applied to the employee. Doctors are required to provide to the employer and insurer a written post injury report stating the restrictions being placed on the injured employee.

It is important to maintain close communications with the clinic. A list of job descriptions covering all your covered employees should be provided to the designated clinic. This will aid the doctor when treating an injured employee, since employees frequently inaccurately state their job requirements. The job descriptions should concisely and briefly detail the exact nature of each job. If the treating doctor determines the injury is a first aid claim, then the established protocol with the clinic should proscribe that the medical bill for services rendered be sent to your organization. (Please refer to the section on First Aid claims). The same established protocol should be followed for all employees that are injured at your location(s). If the injury is not first aid, and the injured employee requires subsequent medical treatment, the job descriptions will assist the doctor in determining whether the injured employee can return to work in a modified or on a light duty basis.

As the employee's condition progresses through the healing process and the employee continues with medical treatment, communications must be continual and concise. (Please refer to the Return to Work section). Any questions on medical restrictions must be resolved through immediate communication with the responsible doctor.

Pre-employment physical exams and drug screening are another reason to pre-designate a medical facility. In addition, if your organization requires base line testing for respirator use, hearing protection, etc., the pre-designated clinic can provide these services at a discount rate.

How to choose a clinic.

When choosing a clinic it is important to recognize the individual needs of your operations. Questions to ask:

• How many locations will the clinic serve?
• Do you have shift work?
• Do your employees work out in the field?
• Will the clinic be able to provide prompt quality medical treatment?
• What are the bilingual capabilities of the clinic's doctors and staff?
• What are the clinic's hours of operation?
• Are they willing to establish a protocol for your injured employees sent to their clinic? * First Aid claims* Return to Work
• Do they have knowledge and/or experience of your operations?

All employees should be aware of the names, addresses, phone numbers and office hours of designated medical aid providers through orientation and posted notices.

If you require further assistance in pre-designating an industrial clinic, your Golden Pacific Insurance Service Loss Control Consultant will be able to assist you.

Paying First Aid Claims

Under the California Code of Regulation 9780(f) "First Aid", employers may pay for their first aid claims. This is important to you as a business owner because it is an excellent way of controlling the cost of Workers' Compensation claims. Paying your first aid claims will save you money in the long run. The medical bill is sent directly to your organization and the claim is not reported to the carrier. Since you are reporting fewer claims to the carrier, your loss ratio remains low. All this translates into lower premiums at renewal. See "First Aid" Section H-3.

It is important to note that although first aid claims do not need to be reported to your carrier, they may still be recordable injuries for the OSHA 200 log.

Medical Provider Cost Containment System

Medical Provider Cost Containment System In addition to the preceding recommendations about carefully choosing your medical provider, Golden Pacific has available a cost contain ment program designed to further benefit the employer. Savings are achieved by minimizing claim expense by monitoring medical and hospital bills received and insuring the payments made do not exceed the legal fee schedule.

The fee schedule establishes reasonable maximum fees that can be charged for medical services. As a result doctors and medical administrators cannot necessarily charge whatever they like for providing a particular treatment but only the reasonable amount established in the legal fee schedule.

Working closely with our insurance carriers and claims administrators, Golden Pacific has also established contractual relationships with medical panels of physicians and medical centers to provide additional savings. For example, many hospital contracts for service are structured on a per procedure type arrangement so that higher prices are not charged for every individualized good or service rendered.

While providing quality care for your employees, these cost containment measures save you money by lessening the costs that are necessarily reported to the Workers' Compensation Insurance Rating Bureau for the computation of your experience modification. After preventing accidents from occurring, minimizing claims costs is the second most important means in which you can minimize your experience modification and hence, your insurance premium.

Communicating When Treatment Is Finished

The treating physician's recommendations as they pertain to your employee's medical treatment, hospitalization, or medical equipment and supplies are legally conclusive. A "Doctor's Release" slip is not required for an injured employee to return to work. It is important that you understand any medical restrictions that the doctor has prescribed and if so, modify the employee's job tasks and/or schedule to conform to these restrictions. In other words, do not inhibit the individual's recovery.

It is important that your employee is seeing the physician at the prescribed dates given. This is particularly true for the final visit. The insurance claim representative needs the final doctor's report in order to close the claim and report accurate claims cost information to the Workers' Compensation bureau.

Communicating Dissatisfaction

Should your employee not be satisfied with the physician or treatment rendered by your designated provider, or if you are not happy with the physician and treatment provided by the employee's selected doctor, there are remedies for correction.

By law insurance companies must be willing to discuss "all elements of the claim file". Upon request by a policyholder the insurer must make available to that employer a written report of the reserve amount established for any particular claim, including esti- mated medical legal costs, vocational rehabilitation and other expenses.

Golden Pacific will work with you to resolve disputed claim activity should it arise, and help coordinate periodic claim review sessions.

A Word about AB 435

AB 435 (Corbett), is codified in Labor Code Section 3762 and comes in response to a situation where an injured worker's employer learned the worker was HIV positive after emergency room physicians noted the information in the worker's medical records. The AIDS Legal Service of San Jose sponsored the legislation and contends that the exemption of sharing of medical information in existing Workers' Compensation law "is far too broad and allows for gross violations of an individual's privacy on a routine basis".

This new legislation is running head-on into a key element of the package of Workers'Compensation reform measures enacted in 1993. A component of this reform is the "Employers' Bill of Rights" which allows insurers and claims administrators to provide employers, agents, and brokers almost unfettered access to information in claims files; including medical reports and diary notes by claims examiners.

But workers' compensation insurers argue AB435 effectively bars claims administrators from providing any medical information regarding an injured worker's claim to employers, agents or brokers. To date the reaction from carriers is abrupt and conservative. Most of them have communicated an extreme position of non-disclosure of medical information or the resulting impact of it on reserves.

There are however two exceptions to this legislation:

1. If the diagnosis of the injury for which Workers' Compensation is claimed would affect the employer's premium, then the insurer may disclose that diagnosis.
2. Medical information regarding the injury for which Workers' Compensation is claimed that is necessary for the employers to have, in order for the employer to modify the employee's work duties.

Return to Work Program (RTW)

Return to top Workers' Compensation temporary disability payments are an expensive compensation benefit. Approximately 35% of all claims submitted involve loss time payments. After reducing accident frequency through safety and health programs, the most important step an employer can take to control premium costs is to promptly return injured employees to work by modifying the job/schedule to meet doctor restrictions. Companies who implement modified work programs for injured employees substantially cut their Workers' Compensation premium expense.

What Is Modified Work?

The concept of modified work or limited duty refers to promptly returning an injured employee to the job while protecting the workers' health by modifying the work activity and/or work schedule to conform to medical restrictions.

Few injuries are incapacitating. With informed medical decision making by a quality medical provider, and preplanning by the employer, many injured employees can return to work immediately following medical care.

Why provide Modified Work?

• Why provide Modified Work?
• Modified work returns the employee to work.
• It keeps the injured employee off the couch and feeling sorry for themselves.
• Studies show that employees who return to work recover sooner.
• Providing modified work shows that you care about your employees.
• Having an employee return to works lessens the chance of litigation.
• Modified work does not reward the employee for getting hurt. This is not vacation time.
• The injured employee feels better about himself or herself.

How Does the Employee Benefit?

By returning your injured employee to work in a modified, yet productive job you are providing them with the opportunity to recover faster, earn more and you help eliminate the feelings of uncertainty and fear that often lead the employee to seek an attorney.

If it makes sense, we recommend that you pay the injured their customary wage while working for you short-term, in a modified capacity. You are not, however, obligated to pay the employee more than the market wage for a lesser valued job. In such instances your Workers' Compensation carrier will supplement the lesser amount you are paying the employee with a weekly wage loss temporary disability payment.

If you bring an injured worker back to work at a lower pay rate during recovery, your carrier will pay 2/3 the difference between the injured's current income in the modified job and their previous earnings, up to $735.00 per week (statutory limit).Your carrier's payment is provided tax free to the employee. The following chart shows the employee's weekly income when wage loss temporary disability is applied.

Clearly, the employee has an opportunity to earn more while working for you in a modified capacity than sitting at home collecting temporary disability payments.

What about a Liability Exposure?

You have no liability for creating modified work for injured employees with medical restrictions. Should your employee aggravate or sustain a new injury while working in a modified capacity, they would be covered under your Workers' Compensation Insurance Policy. They would not be entitled to bring a civil law suit against you.

There is no requirement that the injured employee obtain a "Doctor's Release" slip before returning to work, however it is important that they continue to make their scheduled doctor appointments and obtain the final release for the insurance carrier at the conclusion of the medical treatment.

Preparing A Return to Work Program

Share the information you learned on the value of a Return to Work program with other upper management and supervisory staff at your place of work. It is of key importance that top management approve and support modified work tasks and schedules. The day-to-day responsibility for overseeing the individual injured worker is the responsibility of the direct supervisor.

Schedule a meeting to formulate a RTW plan. We encourage other managers and supervisors to attend this meeting. The purpose is to identify in advance possible light duty jobs that injured workers can perform consistent with their medical restrictions.

In defining in advance what these jobs might entail, it might be helpful to note that the most common restrictions doctors prescribe for injured workers include: no standing, no lifting, a restriction that an injured's hand be immobilized, or that the employee might have the temporary use of only one eye. Brainstorm these concepts and provide some written samples of restricted jobs that can be useful and productive for all in an injured worker's scenario.

Involving the Medical Clinic Before An Injury Occurs

Your relationship with clinic personnel is very important. (See "Choosing and Communicating with the Medical Provider") The clinic should have your specific job descriptions on file to help identify and recommend light duty jobs and modified work assignments available for injured employees. These are also useful for review at the time of physical exams for an injured employee.

Review your procedure for sending employees for treatment to the clinic. We highly recommend having the individual's supervisor take the injured to the clinic and remain to discuss modified work options with the treating physician immediately after treatment. If this is not practical, a second alternative is to have a trusted fellow employee take the employee to the clinic with your medical authorization form. Telephone the clinic to inform them that you are sending the individual for treatment and the nature of the injury. Ask the doctor to call you after the medical diagnosis and initial treatment to discuss return to work options.

Make certain the clinic is willing to work with you by providing written medical restrictions when necessary and that they will freely communicate with you on the treatment status of your injured employees.

Return to Work Program Specifics

If reasonable, bring the injured employee back to work following treatment. Communicate to the employee your desire to identify a modified job/work schedule that will enable the employee to continue on the payroll while being sensitive to medical restrictions consis tent with the employee's full recovery. You and the employee should reach an agreement on whatever modified work arrangements are in order.

If the injured is unable to return to work immediately following the injury, keep in close and regular contact with the individual. Show your concern for the recovery by telephoning daily, and visiting if hospitalization or long-term absence from work is necessary. Remember, many Workers' Compensation cases become litigated because of the injured's perception that the employer does not care about his/her future on the job.

It is important that the injured get prescriptions filled and follow the treatment plan. Track scheduled doctor appointments to help ensure scheduled examinations are taking place. The claims examiner may not close the claim until receipt of the doctor's final release form. Establish a target return to work date, after discussion with the injured, treating physician and your insurance carrier's claims examiner. Maintain and monitor a return to work plan on your planning calendar.

Discuss the injured's progress of recovery with the injured and physician after each medical treatment, or when reasonable. The injured's modified job/work schedule should be considered "transitional," and upgraded as the individual's recovery allows. Make certain that supervisors are sensitive to the individual's recovery and do not allow the modified worker to exceed any aspect of the restrictions in the modified work plan.

If the injured refuses to return to work either in a modified capacity consistent with medical restrictions provided, or after the physician advises that they are capable of returning to their usual and customary job, contact your insurance carrier's claims examiner as soon as possible. They will determine if temporary disability payments should be reduced or terminated.

What Not to Do with Modified Work

It is important to note that when an employee is authorized to return to work in a modified or light duty capacity that they do not have to be returned to their usual job. This is important because you do not want to reward the employee for being injured. For example, a drywall employee injures his/her back. The medical provider's work restrictions state that the employee cannot lift over ten pounds. The injured employee returns to their usual job but is given a helper. The employee is earning the same amount and doing less work. This situation may lead to many problems, such as other employees getting angry because the injured employee is doing less work and getting paid the same. This also sets a bad precedent for other injured employees. The best solution is to return the injured employee to an office job or other type of job, NOT their usual and customary job.

If There Is A Permanent Disability

Sometimes an employee's permanent disability precludes return to their regular job. In such an instance, you should strongly consider the possibility of offering the employee a permanent assignment to an alternate or modified position. Statistics show that this is the most cost effective and fastest way to fulfill your obligation to provide rehabilitation to the employee. It also spares the employee the trauma of a forced job or career change and reduces loss of earnings. In addition, the California Labor Code has a premium rebate provision for those employers who return permanently disabled workers to the job. When an injured worker returns, through a formal rehabilitation plan, to a modified position with his/her employer and remains in that position for at least one year, the employer is entitled to a rebate. The following sample is provided:

The amount of the rebate is comparable to the cost of the employee's Workers' Compensation Insurance coverage for one year.

Occupational Injury or Illness

What to Do if An Employee Is Injured

Return to top General

• Initiate emergency procedures if necessary
• In case of traumatic injuries, call 911 or other immediately available emergency services (see Serious Injury)

If it is not an emergency then:

• Give the injured employee:

• The Facts for injured workers pamphlet (within 24 hours)
• Employee Claim for Workers' Compensation (DWC-1 Form)

• Have the injured employee complete the Employee statement (if applicable)
• Collect witness statements (if applicable)
• Complete Accident Investigation Report (as soon as possible)
• Complete First Report of Injury (5020 form)
• Contact the clinic and give the following information:

• Company name and location
• Injured employee name and expected time of arrival
• Injury/Incident information

• Direct or accompany injured employee to the industrial clinic. A management representative should accompany the injured to the clinic for the initial treatment when possible.
• Inform the injured employee that they must return to work after the medical appointment
• Call Golden Pacific Insurance Services and report the claim.
• Based on the doctor's diagnosed work limitations for the injured employee, identify a modified position and obtain doctor's approval to release the employee to temporary modified duty.
• Update the OSHA 200 log (if applicable)

Treatment Options for Minor Injuries

In instances where an injury appears minor ­ we suggest that you discuss treatment options with the injured including offering the services of a doctor. If you do not offer the opportunity to have the injury treated by a physician, the employee may decide to seek self-procured treatment. This may result in you having relinquished medical control at the outset. We suggest that you mandate as company policy, a doctor evaluation in instances when:

• The employee has been with you less than 90 days.
• The individual is not covered by a health insurance plan.
• The employee has a history of absenteeism or disciplinary problems.
• The injury is orthopedic in nature.

Serious Injuries

• Initiate emergency procedures
• Contact your Golden Pacific Insurance Services Loss Control Consultant
• A personal phone call from the Owner/President of the company to the spouse informing them of the employee injury is a significant first step in managing the outcome of the claim. Communicating with the injured employee's family about what to expect during the process is vital. Involving the family in the process is your way of letting the employee know that they are important.

Utilizing the "24-72-5 telephone call procedure is an excellent method of ensur- ing that the lines of communication are kept open. This procedure requires that within 24 hours of the injury, the owner or a senior manager contact the employee and give them positive supportive messages. Seventy-two hours later another level of management calls and does the same. Five days later another manager contacts the injured employee with the same message. This is very important in reducing or avoiding future litigation.

It is important to remember that the employee has suffered a serious injury or illness and is frightened of the unknown. You as a business owner need to ensure that the employee feels comfortable and be informed about what to expect.

• Keep in contact with the injured employee

First Aid

Return to top Being able to provide first aid medical care for injured employees is impor- tant. Saving a life and minimizing the extent of physical damage are two reasons to have trained first aiders among your workers. In addition, minor injuries can be treated on-site allowing the employee to return to the job promptly without losing time from work or incurring medical bills.

What Is Considered a First Aid Claim?

Clients often ask whether they may directly pay the bills for professional medical first aid of minor injuries. The answer is "yes", if it fits the definition provided by the California Code of Regulations. The following definition is provided:

First aid is any one time treatment, and any follow-up visit for the purpose of observation of minor scratches, cuts, burns, splinters, etc., which do not ordinarily require medical care. Such one time treatment and follow-up visit for the purpose of observation, is considered first aid, even though provided by a physician or registered professional personnel.

The California Insurance Code mandates that injury claims that go beyond this definition be reported to your Workers' Compensation insurance carrier. In turn, the cost of those claims are used to compute your experience modification. Therefore, You can keep your experience modification lower if it is possible to treat injuries that fall within the first aid definition either with on site first aid supplies, or by paying directly for the doctor's visit and follow-up visit.

The employer must provide first aid and/or emergency treatment to its injured employees. Qualified first aiders should be present on all work shifts. An employer must at all times keep and maintain a medical first aid chest. It must be accessible to the employee and provided free of charge.

California law mandates that all employers must insure the ready availability of medical personnel for consultation on matters of industrial health or injury. In the absence of a clinic or hospital in close proximity to the workplace, a person is required to be adequately trained to render first aid. If the workplace is a construction project, a trained first aider must be on site. The level of training must be equal to that of the American Red Cross Certification.

Bloodborne Pathogens Standard

The 5193 Bloodborne Pathogens Standard applies to all employers (Construction Industry is exempt) whose employees have or may have an occupational exposure to blood or other potentially infectious materials. The facilities and operations subject to 5193 fall into two general categories:

• Category One consists of those facilities and operations that involve occupational exposure by virtue of the intrinsic nature of the work at the facility or operation.
• Category Two facilities and operations consist of those that involve occupational exposure only because of the specific exposure circumstances in the facility or operation. This standard covers employees who are designated to render first aid.

If you require further clarification or feel that your operation may have an exposure under the 5193 Bloodborne Pathogens Standard please contact your Golden Pacific Insurance Services Loss Control Consultant.

Occupational Injury or Illness Forms Click on these links to download a file containing the form indicated.

Employee's Claim for Workers' Compensation Benefits (DWC Form 1)

Employer's Report of Occupational Injury or Illness (FORM 5020)

Doctor's First Report of Occupational Injury or Illness (FORM 5021)

Workers' Compensation Law

Subrogation

Return to top The term "Subrogation" means the substitution of one person in place of another with reference to a lawful claim. In Workers' Compensation law, if a third party causes injury to an employee for which the employee's employer, or its insurance carrier, pays or becomes obligated to pay compensation, the employer, or its insurance carrier may make a claim against the third party who caused the injury.

Examples of Cases Where Subrogation Is Applicable:

• Vehicle accident cause by another party.
• Injury caused by improper (negligent) design or construction of manufactured goods.
• Injury caused by the pet or child of another party.
• Any injury caused on another's premises, where it can be shown that the premises were maintained in a hazardous manner.

What You Should Do

1. Notify your Workers' Compensation claims examiner.
2. Take steps to impound all tools and equipment associated with the injury, allow no further use until you have had a discussion with your claims representative.
3. Your employee should be instructed in advance of what to do in the event that this type of situation arises (particularly those driving on your behalf).
4. Your Workers' Compensation claims examiner will determine the necessity of further investigation. This may include visiting the injury site, obtaining statements from witnesses, impounding tools and machinery, taking pictures, etc.

If subrogation is made that will directly affect your experience modification, Golden Pacific will monitor the experience modification calculation. Generally, recoveries of money due to subrogation are removed from your claims experience.

Workers' Compensation Fruad

Return to top Most employee reported injuries are legitimate. Compensation carriers want to ensure that your employees receive entitled benefits and are treated fairly. Unfortunately, both insurers and employers have been combating Workers' Compensation fraud some time.

General Information

After the passage of Senate Bill 1218, known as the Workers' Compensation Insurance Fraud Reporting Act, effective January 1, 1992, we have seen the number of fraud cases decrease. This is believed to be due primarily to the closure of medical/legal claim mills, the imposition of felony penalties, and the effect of the high profile anti-fraud effort led by insurers.

Nevertheless, fraud in the Workers' Compensation Insurance system continues to be a concern. For example, in 1998 there were 4,331 cases referred to the Department of Insurance Fraud Bureau and/or the local District Attorneys Office for investigation and prosecution. There were 358 arrests and 268 convictions for Workers' Compensation fraud in the year 1998.* The total number of suspected fraud reports recorded in the past 5 years has now risen to more than 30,000 cases.*

Nearly $30,000,000 has been allocated by the State to investigate and prosecute Workers' Compensation fraud for 1999. Though fraud is currently on the decrease from the recent past, it still remains a problem. Our new fraud law decrees the following which has been added to many Workers' Compensation Reporting Forms:

Any person who makes or causes to be made any knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying Workers' Compensation benefits or payments is guilty of a felony.

* Source material: Department of Insurance, Bureau of Labor Statistics, and Department of Labor.

Our Fraud Law Specifically Prohibits the Following:

1. Prohibits physicians and attorneys from employing "runners" or "cappers" to procure clients. Payment or other consideration for the referral of clients is illegal.
2. Prohibits untrue and deceptive advertising by physicians and attorneys.
3. Prohibits the willful misrepresentation of facts to obtain Workers' Compensation insurance at less than the proper rate from an insurance company. This could include an employer denying/not reporting claims, paying its own claims, or misstating payroll information.
4. Allows insurers to report suspected fraud claims to the local District Attorney, or Bureau of Fraud Claims and be shielded from any civil liability as a result.
5. Requires an insurance company to notify an employer of an indemnity claim when the employer has not submitted an Employers Report in a timely manner. This must be done within 15 days of knowledge.
6. Prohibits the Appeals Board from awarding fees for legal services to any representative who is not an attorney.

Persons convicted of these offenses face penalties ranging from $10,000 to $50,000 and imprisonment for up to 5 years (repeat offenders shall be sen- tenced to an additional 2 year term for each previous conviction). Attorneys and health care professionals are subject to a suspension or a revocation of their licenses.

Fighting Fraud

Workers' Compensation carriers are required to maintain special investigation units consisting of highly experienced claims examiners who are responsible for investigating and managing all suspected fraud claims submitted by their clients.

The goal of the special investigation unit is to resist making payments to suspected fraudulent claimants, medical providers and applicant attorneys. They work to gather the investigative evidence necessary to defeat a Workers' Compensation action and provide that evidence to legal authorities for criminal prosecution.

Golden Pacific works hard to pass critical information through to the special investiga- tion units. Good communication between you and your Golden Pacific representatives can be of significant value in fighting fraud and reducing your cost of insurance.

What You Should Do

We recommend that you notify the carrier or Golden Pacific any time you suspect that one of your employees is involved in any fraudulent claims activity. Do not attempt to report your allegations directly to the legal authorities, for this may cause you legal problems if the carrier determines that the claim is compensable.

Your carrier needs factual information that will help them get started with their investigation. Ultimately, they will file a complaint with the Department of Insurance Fraud Bureau or District Attorney's Office. They must provide these agencies with a clear picture of why they believe there is fraud, with evidence to back it up. Therefore, prompt notification of the claim to the carrier, accident investigation and personnel file documentation by you is very important.

Some of the "Red Flags" that should alert you to the potential of fraud:

1. The employee does not promptly report the accident and the first notice of the accident comes from an attorney or doctor.
2. The accident is unwitnessed or you learn of rumors that the accident is not legitimate.
3. The employee is a relatively new hire.
4. Several employees from the same employer have similar injuries and use the same doctors and/or attorneys.
5. Injuries are of a subjective nature, such as mental stress, headaches, inability to sleep, nausea, soft tissue injuries, etc.
6. Employer is cutting back employee hours or laying off people.
7. Anytime an employer notifies an employee of his/her poor performance,tardiness, etc.
8. The Index Bureau inquiry by your insurance carrier reports many prior claims.
9. Watch for "muscular or chiropractic" type claims reported early Monday morning.

These are just a few of the most common indicators of possible fraud. These do not necessarily establish fraudulent activities however, their presence suggest the need for further investigation.

Loss Control Services

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Employee Safety and Health Management

Regardless of business type, all employers are concerned about balancing the well being of their employees with the necessity of controlling expenses. Good safety and health programs not only address employee safety, but also positively affect the bottom line. An effective program helps lessen the number of Workers' Compensation claims, which reduces your insurance premiums. It also lessens the risk of costly citations for non-compliance of federal or state safety laws. A well-run safety program can also improve employee morale, which will increase worker productivity and work quality and reduce turnover.

Golden Pacific Risk Services can assist in the development and implementation of an employee safety and health management system appropriate for your business. Such a system may include employee safety policies, supervisor safety management training, accident reporting and investigation training, safety inspection procedures and checklists, and safety committees.

Safety Program

We will evaluate and customize your Injury and Illness Prevention Program to ensure your program has all the necessary elements required by S.B. 198, and enhance your ongoing safety efforts. If you do not have one in place, we can help you develop a thorough program to meet your unique needs.

Safety Inspections

We will assist you during your safety inspections and we can help you develop a customized self-inspection checklist.

Safety Meetings

Active participation in your safety committee meeting will enhance your efforts. We can also help develop a safety meeting agenda for your company.

Ergonomics

We can evaluate your office and manufacturing facilities and focus on video display terminals (VDT's), repetitive work, equipment selection, awkward body movements and lifting.

Industrial Hygiene

If you have a change in your operations, introduce a new chemical process or are addressing an employee complaint, we will perform basic air sampling to measure the exposure. Once we have identified the problem, we can help you implement the necessary physical and administrative controls.

Accident Investigations

A thorough investigation of serious accidents can reduce both the potentials for repeat injuries and enhance your future safety training efforts

Public Liability

A thorough evaluation of your premises will identify any public liability exposures, which may be incurred by your customers and visitors. We will focus on floors, aisles and exits, particularly slip and fall prevention.

Layoffs

If you anticipate a layoff in your work force, we can show you different ways to conduct the layoff, perform exit interviews and minimize the impact on your organization and employees.

Safety Training

Customized English and Spanish supervisor/employee training can be done for the following programs:

• Accident Investigation
• Injury and Illness Prevention Program
• Hazard Communication
• Forklift Safety
• Lifting & Back Safety
• Bloodborne Pathogens
• Defensive Driving-If your employees are driving delivery vans, trucks, or passenger cars, we will help you teach them to drive safely and avoid collisions.

Safety Service Planning

We also have the capability of providing safety tips in the following areas:

• Chemical Hazards
• Fire Safety
• Kitchen and Restaurant Safety
• Incentive Programs
• Pull notice programs for motor vehicle reports (MVRs)
• Drug Testing
• Earthquake preparedness
• Emergency procedures programs

OSHA Compliance

OSHA Targeted Employer Program

OSHA Targeted Employer Program If your organization falls within the CAL-OSHA selection criteria, we can assist you in developing an action plan to reduce the number of injuries. Golden Pacific has long had a reputation for reducing Experience Modification by proactive loss reduction and aggressive review of claims handling by your carriers, past and present

OSHA Inspection

We can also conduct a "mock OSHA audit" of both your physical and administrative controls. This type of audit will help identify those areas in which your organization may receive citations and/or fines during an OSHA inspection. If necessary, we will help you prepare the necessary documents required by CAL-OSHA.

OSHA Hearings and Fine Reduction

We will assist you in preparing for both informal and formal hearings to reduce the fines and severity of the citations. We are also immediately available after a serious injury to prepare for the imminent inspection.

OSHA Recordkeeping

A thorough review of your OSHA 200 log recordkeeping program for the past five years will ensure that you e maintain neither too little nor too much information.

Federal/State Employee Safety and Health Compliance

Whether your business falls under federal or state employee safety and health laws, Golden Pacific Risk Services can help you understand your responsibilities. We can explain the standards in easy-to-understand language and can answer your specific "how to" questions.

If you are unsure of the laws that affect you, we can help you identify the standards applicable to your business. We can also assist you in the development, review, or revision of required written programs; production of employee training materials; and the creation of auditing checklists and procedures to assess compliance.

For example, if your company uses chemicals, we can help you write the CAL-OSHA required Hazard Communication program and establish inspection procedures that will help you determine whether or not the program is properly implemented. We can also provide you with information media to assist you in the required employee training.

AB 1127

On October 6, 1999, Governor Davis signed Assembly Bill 1127 into law. AB 1127 became effective January 1, 2000. AB 1127 increases civil and criminal penalties for willful, serious and repeat violations of occupational safety and health standards. It also provides that willful violations of safety standards that lead to death or permanent prolonged impairment may be prosecuted as either a misdemeanor or a felony, giving the district attorney more flexibility. There were four major changes to the labor code:

1. Title 8, 334(c), changing the definition of a "serious" violation to reflect the new definition contained in Labor Code 6432. That sections states that a serious violation exists in a place of employment if there is a "substantial probability that death or serious physical harm could result from a violation" and lists the circumstances that could create such a condition.
2. Title 8, 336(c) (1), which increases the maximum penalty for serious violations from $7000.00 to $25,000.00 per violation, with an initial base penalty of $18000.00. Per LC 6428
3. Title 8, 336 (d) (12), which eliminates "Good faith" and "History" adjustments for repeat violations, pursuant to Labor Code section 6429. Penalties for repeat violations may only be adjusted according to the size of the employer. Smaller employers are given a greater break on repeat violation penalties than larger employers, who are presumed to have greater knowledge of the law.
4. Title 8, 336 (f), which increases maximum daily penalty for failure to abate a violative condition to $15000.00, per LC6430

Under AB 1127, the burden is now on the employer to demonstrate lack of knowledge of a violative condition. There are eight other changes that may affect you as a business owner. If you require further clarification please contact your Golden Pacific Insurance Services Loss Control Consultant.

Lowering Loss Ratios and Experience Modifiers

Workers' compensation insurance is a cost of doing business. Golden Pacific Risk Services can assist you in reviewing your claims to identify the underlying causes of the claim incidents. We can then work with you to develop a specific plan to address those underlying causes.

Employment Practices Liability Insurance

Return to top Employment Practices Liability Insurance (EPLI) is an insurance policy that protects the employer from a wide variety of claims including harassment, discrimination and wrongful termination. Also included are the changes brought about by the Civil Rights Act of 1963, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family Medical Leave and Pregnancy Leave Acts, as well as many more. Obviously the vast amounts of legislation now offering protection to employees creates tremendous opportunities for litigation. Historically, lawsuits from wrongful termination, sexual harassment, discrimination and other employment related issues have not been covered losses under standard business insurance programs. While Workers' Compensation and Commercial General Liability (CGL) policies did afford some coverage in the past from "gray areas", this is no longer the case. Virtually all CGL and WC policies issued today specifically exclude these coverage areas by endorsement, thus closing any loopholes that may have previously existed.

Definitions:

Serious and Willful 132(a) LC 4551 Serious and Willful Misconduct (S&W)

I. Where the injury is caused by serious and willful misconduct of the injured employee, the compensation otherwise recoverable therefore shall be reduced one-half, except: a) Where the injury results in death. b) Where the injury results in permanent disability of 70 percent or over c) Where the injury is caused by the failure of the employer to comply with any provision of law, or any order of the Division of Occupational Safety and Health, with reference to the safety of places of employment. d) Where the injured employee is under 16 years of age.

II. Where the injury is caused by serious and willful misconduct of the employer, the compensation otherwise recoverable shall be increased one-half. Together with costs and expenses not to exceed two hundred fifty dollars ($250.00), where the employee is injured by reason of the serious and willful misconduct of any of the following: a) The employer, or his managing representative. b) If the employer is a partnership, on the part of one of the partners or a managing representative or general superintendent thereof.

c) If the employer is a corporation, on the part of an executive, managing officer, or general superintendent thereof.

LC 4553.1 S&W; Appeals Board Findings

I. In order to support a holding of S&W by an employer based on violation of a safety order, the appeals board must specifically find all of the following:

1) The specific manner in which the order was violated.

2) That the violation of the safety order did proximately cause the injury or death, and the specific manner in which the violation constituted the proximate cause.

3) That the safety order, and conditions making the safety order applicable, were known