All business owners know that maintaining a business can be costly. Advertising, inventory, rent, and taxes, just to name a few. In California, almost all businesses are also required to carry workers’ compensation insurance. Workers’ compensation insurance can be costly. All businesses, ranging from large corporations to small businesses, are all trying to reduce costs in order to maximize profitability. Although California law likely requires you to carry workers’ compensation insurance for your business, there are techniques you can employ to help reduce your workers’ compensation costs.
One way to help you reduce your workers’ compensation insurance costs is to make sure you understand how your workers’ compensation insurance premium is determined. Workers’ compensation insurance premiums are based on a specific classification system. The more dangerous the roles of your employees, the higher your workers’ compensation rates will be. Accordingly, you need to have an open line of communication with your insurance adjuster to ensure that he or she is assigning the correct classification to your workers.
Another way to reduce your workers’ compensation insurance costs is to make sure that your workplace is as safe as possible. Ensure that you keep your equipment up to date and in good repair. Creating a safety committee in the workplace can also help, as your employees can take a direct role in keeping your workplace as safe as possible. As your employees are the ones who directly deal with all workplace conditions, they often have some important suggestions as to how to make your workplace even safer. The fewer injuries you have in your workplace, the lower your workers’ compensation premiums will be.
Third, you should build a return to work program. An important rule of thumb to keep in mind is that the longer a workers’ compensation claim remains open, the more expensive the claim will be. This is because the claim will require that more replacement income benefits must be paid. Accordingly, if you can build a program that proactively helps workers get back to work, income benefits will not have to be paid for as long a time. A return to work program often includes allowing an employee to return on a light-duty or even part-time basis. You will need to coordinate these plans directly with the employee’s health care provider to make sure the work is appropriate for the particular injury.
We have extensive experience helping our clients understand their rights and responsibilities with regard to workers’ compensation responsibilities. Call us today for a consultation.