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To the majority of employers, Workers Compensation insurance is just another unavoidable cost of doing business. They never think much about it until they get hit with a rate hike. When rates are low, they don’t give it much thought at all.

However, if employers regarded Workers Compensation as a tool for improving the bottom line, they would find ways to hold on to those low rates over the long-term. The following list represent the most common mistakes employers make that prevent them from maintaining their Workers Compensation savings:

• Believing that lower rates means lower cost. Don’t assume that if rates have been reduced it will automatically reduce your cost. To establish cost, insurers use an experience modification factor that examines the actual losses of the company being covered. The insurer compares these losses to those of other companies within the same industry classification. If the insured’s past losses are lower than average, the company is given a credit rating that lowers the premium. However, if the insured’s past losses are higher than average, a surcharge is added to the premium before any discounts the insured might be entitled to.
• Emphasizing injury management and cost containment less when rates are low. Maintaining the focus on safety at all times reduces the number of claims, which helps keep rates low. In addition, employers need to remain alert to issues that impact claims costs, such as lost wages and the cost of medical care. When claims remain open, their costs escalate. This impacts the employer’s modification factor negatively, which increases the cost for coverage.
• Assuming that Workers Compensation is an expense over which you have little control. You must have Workers Compensation, but you don’t necessarily have to pay an excessive amount for it. Start by realizing that cost reduction begins with the hiring process. Good interview techniques and thorough background checks will result in hiring the right people. But even with the best employees, injuries can happen. For those instances, it is imperative that you have an effective return-to-work program that aids the injured employee in getting back on the job as quickly as possible so as to reduce claim costs.
• Failing to realize that worker retention is a powerful tool in cost containment. The more skilled your workforce, the less likely they are to have accidents. However, when one of your skilled employees does have an accident, your response will determine whether or not that employee will return to the job after recovering. If the employee feels disconnected during the recovery period, they will probably not return. Here again, an effective return-to-work program is important, because it keeps injured employees in the loop with periodic phone calls informing them about adjustments in policy and procedure, or other workplaces changes. The return-to-work program administrator should also be in constant contact with the employee’s doctor to monitor their recovery progress and determine the earliest date it is feasible for the employee to come back.

One of the most stressful situations employers have to face is dealing with employee terminations. Even when employees leave of their own free will, there are repercussions in the workplace that affect the departing employee, the employer, and the employee’s co-workers. And when employees leave due to being fired or layoffs, it can be even more disruptive.

When you are faced with employee terminations, it’s important to make sure you minimize any negative effects on your business and your remaining employees. If you manage the situation carefully, you can reduce the impact and the risk of encountering legal issues.

A proactive strategy can help. As you consider a comprehensive employee termination strategy, it can be helpful to note that terminations usually fall into one of three categories:

• Employer ending the employment relationship for cause due to poor performance or behavior.
• Employee ends the employment relationship voluntarily.
• Employer ends the employment relationship for economic reasons unrelated to employee performance.

In some instances, specific termination types call for certain responses. There are also general guidelines that make sense for all types of terminations. Here are some tips that might help:

Employer ends employment relationship for cause

• Protect yourself and your employees: Sometimes, the wisest course of action is immediate termination — for example, if an employee steals or is a danger to your business and/or other employees. In this case, immediate termination might be justified. However, make sure you understand the law and your responsibilities fully.
• Counsel employees and document your efforts: Some poor performers deserve a second chance. Ensure that employees understand what is required of them, and make sure you document warnings and counseling so that your business is protected if you do ultimately have to terminate the relationship.

Employee ends employment relationship voluntarily

• Make sure you understand why employees are leaving: If you don’t already have an exit interview policy, consider implementing one. It’s a great way to find out how your business stacks up against competitors on the benefits and compensation front. It can also be a good way to nip management problems in the bud.
• Take advantage of counter-offer opportunities: If a valued employee is leaving, you might be able to keep them on board if you take the time to discuss the reasons for the departure. Turnover is expensive, and a pay raise might be far less costly than recruiting and training a new employee.

Economic-related terminations

• Let employees know they are valued: Layoffs are difficult, but letting employees know they are appreciated and treating them with respect can make the transition less challenging. If you can provide a good severance package and help in securing another job, this will also help.
• Keep employees informed: Reductions in your workforce affect everyone — your management team, employees who are being let go and employees who will remain with you. Keeping the lines of communication open can help reduce anxiety.

All types of terminations

• Have a process in place: Follow a set procedure so you treat all employees equally. A checklist of termination steps can be helpful.
• Communicate effectively: It’s important for all employees to understand what’s expected of them so that you avoid misunderstandings.
• Talk to a lawyer: The employer-employee relationship is highly regulated. If you suspect there might be guidelines you’re unsure of, consult an attorney.

The last word

If you’re an employer, chances are you’ll have to deal with employee terminations at some point. They are rarely pleasant, but you can manage the fallout by planning ahead and making sure you have appropriate procedures in place. By taking a proactive approach, you can minimize the effect on your workforce and protect your business.

Most employers know that sexual harassment is a form of discrimination that violates Title VII of the Civil Rights Act of 1964. The legal definition of sexual harassment is “unwelcome verbal, visual, or physical conduct of a sexual nature that is severe or pervasive and affects working conditions or creates a hostile work environment.”

Although this definition might seem clear cut, the issues surrounding what constitutes sexual harassment are not. One of the most difficult aspects of examining a sexual harassment charge is deciding whether or not the conduct in question was truly harassment, and not just an innocent exchange between consenting adults.

There are two scenarios, that when they exist, are a definitive sign of sexual harassment:

1. Hostile environment – This is the most prevalent type. A work environment becomes a hostile environment when an employee is made so uncomfortable by a pattern of repeated, unwanted behavior that they cannot perform their job.
2. Quid pro quo – This Latin phrase literally means “this for that.” Quid pro quo occurs when a supervisor, or other person acting with authority, withholds, demands, or promises a benefit if the employee submits to unwelcome sexual conduct.

Keep in mind when trying to determine if an employee’s/supervisor’s actions constitute harassment; you have to view the conduct in question from the victim’s perspective. The victim determines whether the conduct is severe and pervasive enough to create a hostile environment. The harasser’s intentions do not play a role in the matter.

If there are recurring incidences of employees making sexual harassment charges in your organization, it is probably not a question of supervisors being unaware of inappropriate behavior. Rather it’s a matter of supervisors not taking action when they see inappropriate behavior. Failure to act is far more common than you might think. It is usually the result of a supervisor feeling unsure as to whether the behavior was really unacceptable, or not knowing the proper way to confront the parties involved.

The best way to remove these hindrances is to:

• Establish a sexual harassment policy that sets forth what actions are acceptable, what actions are considered sexually threatening, and what steps will be taken if anyone is found to be in violation of company policy. Once you have clearly defined your policy, document it and provide a copy to each employee. All employees should sign a disclosure that says that not only have they read the policy and understood it, but they also understand the consequences for failing to uphold it.
• Provide training. Supervisors should be given appropriate training in the correct manner of investigating a charge of sexual harassment including the types of questions to ask, how to file a written report, and to whom the report should be given.

It is also a good idea to be proactive in avoiding formal confrontations by periodically walking around and talking with employees. Many times an informal conversation can tip you off to a potential powder keg.