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Tips For Minimizing Worker's Compensation Claims During Layoffs

by Raymond Gibson

If your company is facing its first layoff, the process can be stressful and worrisome. As a business owner, there are many things you need to think about during this process to protect both you and your company. For example, one common concern during layoffs is the risk of increased worker's compensation claims. When employees think they may have no job to come back to soon, they're less likely to dismiss smaller discomforts and may exaggerate problems in an effort to seek worker's compensation benefits to help close the financial gap. Here are some tips to help you protect your company and your worker's compensation insurance record from fraudulent or unnecessary claims due to layoffs.

Save Your Security System Footage

As soon as you start considering the potential of a layoff, you should instruct your security team to start archiving all of the footage from the in-house security cameras. This is important, because you may need the video documentation of employee behaviors. For example, if an employee files a claim for worker's compensation after they are laid off, your video footage will provide you documentation of the injury or the employee's behavior to help you ensure that it is a legitimate claim or to refute the claim if evidence shows otherwise.

Call Your Worker's Compensation Insurance Broker And Claims Staff

Reaching out to your broker and claims representative is key to managing this process. Before you lay off any employees, make sure they know what is happening. Provide them with a list of employees who will be affected and keep copies of the personnel files and information for each employee so that you have documentation of everything. Providing the list up front helps with transparency. If one of the affected employees files a claim, they will have record of the layoff and can evaluate the claim more closely for any indications of fraud.

Plan Exit Interviews With Each Employee

While this may prolong the layoff process a little bit, it's important to conduct an exit interview with each employee as part of the layoff. Have team members from both the human resources and legal departments present to ensure that everything is done by the book. You may even want to have your worker's compensation insurance claims representative present for this.

During the exit interview, ask each employee specifically and directly about any unreported injuries. Some employees dismiss the signs of an injury or hesitate to report injuries out of concern that they may lose their job. When laid off, that concern becomes irrelevant and they may decide to report anyway. Have your legal staff draft forms for each employee to sign confirming that they have not suffered an unreported injury. Keep those forms on file for later documentation if needed.

Provide Transitional Assistance

Coordinate with a few local service providers before the layoff to create an assistance package for each affected employee. When you can ease the transition and help laid off workers get back to work, you reduce the chances that they'll pursue worker's compensation to fill in financial gaps.

Contract the services of a resume writing professional or consultant to help with development of a new resume for those who don't have the skills to do it themselves. You can also reach out to several job placement services to have representatives on site to offer other employment opportunities.

In addition, reach out to your local unemployment office to have representatives present to help with the unemployment application process. This provides your laid off employees with the support necessary to get the claim started, which will help them meet their financial needs.

The more proactive you can be about providing your exiting employees with support, the less risk you'll face of fraudulent or excessive worker's compensation claims. Use these tips and the support of a worker's compensation insurance company, such as Harris Insurance Services, to protect your business interests.