Layoff Considerations and How to Prepare for Potential Claims

Layoffs are an unfortunate reality for many businesses. Whether a layoff is planned or unplanned, a business can suffer major reputational harm or even be taken to court following a large-scale termination.

In fact, it’s not unheard of for layoffs (and even just the threat of layoffs) to increase workers’ compensation claims, particularly in a tight job market. This is because individuals faced with a loss of income, temporary unemployment benefits and the likelihood of unaffordable health insurance may look to workers’ compensation as a way to sustain their income.

Although employers must never attempt to stop any individual from filing a workers’ compensation claim (legitimate or otherwise), there are steps you can take to help minimize your business’s liability for future claims.

Communicate With Your Insurance Carrier and Legal Professionals First and foremost, it’s crucial that you let your insurance carrier know about any downsizing plans. This is because your carrier can provide tips for dealing with any workers’ compensation claims that may follow the downsizing.

Working closely with a legal professional can also help you understand the relevant workers’ compensation laws in your jurisdiction.

If a claim does arise, you should immediately report any suspicions you have about the claim —along with all the reasons for your suspicions—to both your workers’ compensation carrier and legal professionals. The earlier you voice concerns, the more opportunities you’ll have to investigate the claim, gather medical evidence and discuss defense strategies.

Have Strong Reporting and Investigation Procedures in Place

Workers’ compensation claims are not often decided by a singular bit of information or evidence. Rather, employers must cover multiple angles in order to defend against questionable claims effectively.

For instance, employers could provide documentation of anecdotal evidence (e.g., no one saw the individual get hurt). Objective evidence (e.g., an independent medical exam’s X-ray or MRI) is also important for a strong defense. To help gather this kind of evidence and stay ahead of potential claims, accident reporting and investigation is crucial.

Regularly revisit your accident reporting policies, and require all employees to report accidents immediately, no matter how minor. Following a reported incident, you should investigate immediately. Consider separating witnesses from each other in order to get an accurate picture of what happened. Document these incidents and investigations thoroughly, and secure witness statements and signatures whenever possible.

Finally, as part of an employee’s exit interview, you should consider having the employee sign a form stating whether he or she has been involved in any unreported accidents or hazardous exposures while on the job. This can help you defend against unexpected claims that arise after a layoff.

Maintain Strong Recordkeeping Practices

When it comes to combating questionable future claims, accurate recordkeeping can make all the difference. Above all, employers need to know where employee records are kept and should secure photocopies of them as backups. Employers should also:

  • Assign a trustworthy employee to oversee employee records. This individual should be able to provide and explain these records in court.
  • Maintain a photographic or video record of your premises. This can help illustrate the conditions of your building and workspaces in the event of a claim.
  • Consider using and keeping records of termination interviews in order to help determine the risk of any future workers’ compensation claims. You may also want to consider performing termination physicals, as these can be useful in case an employee files a claim after being laid off. Specifically, these physicals can help establish an employee’s health and fitness at the time their employment ended.

Finally, employers should ensure employee records are not destroyed, since payroll, schedules and accident reports may become vital evidence.

Invest in Employee Assistance Programs

Terminations can put employees in an antagonistic frame of mind, which can lead them to bring questionable claims that they wouldn’t make otherwise. However, this risk may be reduced if an employer demonstrates that it cares about an employee’s well-being during an exit interview.

To accomplish this, many employers provide resume counseling, therapy and other services that demonstrate concern for a former employee’s welfare. These simple actions can ensure employees don’t take a layoff personally.

Watch for Risk Indicators

To better protect themselves, employers should be aware of certain indicators that they may be at risk of a future claim:

  • The employee is disgruntled after being fired or laid off.
  • The employee has been told his or her employment is about to end.
  • The employee is having financial difficulties.

It should also be noted that a lack of witnesses and medical evidence can indicate that a claim is questionable. Make note of these instances, as they can come in handy in the event of a claim.

Have a Strategy in Place

While employers must never attempt to prevent an employee from making a workers’ compensation claim, the above tips can assist in avoiding and defending against questionable claims. Employee reductions can pose a significant challenge for employers and are often devastating turns of events for employees. It is important for employers to have a layoff strategy broken down into goals and an action plan for the company.

For more workers’ compensations strategies and advice, contact Libertate Insurance Services today.

Recent COVID-19 Claims Examples and Changes

Check out the article below to see some examples of COVID-19 claims and how it is affecting employers, carriers and employees alike.
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Coronavirus/COVID-19 is affecting Florida workers’ compensation claims in a variety of ways, including litigation events (being required to appear telephonically for events or having to continue final hearings due to delays in being able to depose physicians) and the actual workers’ compensation claims themselves as discussed below.

On April 24, 2020, Judge Timothy Stanton of the Gainesville Office of Judges of Compensation Claims found in Gomez, Esteban v. Ridgeway Roof Truss/Zenith Insurance Company, OJCC Case No. 19-016953TSS (Final Compensation Order dated April 24, 2020)  that “based upon the COVID-19 pandemic and its associated risks and restrictions,” the employer’s/carrier’s selection of a physician an hour away from the claimant’s home whereby the claimant would be transported to the medical appointment in “close proximity to a stranger, in an enclosed vehicle for close to two hours for each medical visit that may expose him and his family to COVID-19 (was) unreasonable.” The employer/carrier was required to select and authorize a local physician to provide the claimant with medical treatment, whereby his wife could drive him to appointments, due to Florida being “engulfed in the Coronavirus (COVID-19) pandemic” and preventing the spread of this virus.

On May 14, 2020, Judge Robert Arthur of the Lakeland Office of Judges of Compensation Claims opined asserting that an injured employee’s failure to meet its prima facia burden to show entitlement to temporary partial disability benefits (i.e. in asserting there was a break in the causation chain due to COVID-19) is an affirmative defense that should be listed on the Uniform Pretrial Stipulation.  “The parties are required to set forth their claims and defenses in the Pretrial Stipulation. It is the employer’s/carrier’s burden to demonstrate a break in the causation chain. As the employer/carrier bears the burden to establish the break in the causal chain this is an affirmative defense that must be pled with specificity on the Pretrial Stipulation.” See Gamero-Hernandez, Teresa v. Beals/Sedgwick CMS, OJCC Case Nos. 17-023646RAA; 18-007955RAA (Final Compensation Order dated May 14, 2020) citing Knight v. Walgreens, 109 So. 3d 1224 (Fla. 1st DCA 2013); Perez v. Se. Freight Lines, Inc., 159 So. 3d 412 (Fla. 1st DCA 2015); Meehan v. Orange County Data & Appraisals, 272 So. 3d 458 (Fla. 1st DCA 2019)

On May 21, 2020, Judge Keef Owens of the Port St. Lucie Office of Judges of Compensation Claims denied a claimant’s motion for an advance of $2,000.00 as the claimant failed to demonstrate (1) a failure to return to employment at no substantial wage reduction; (2) a substantial loss of earning capacity; or (3) an actual or apparent physical impairment. Judge Owens stated, “An advance serves as a ‘stopgap to help a claimant avoid defaulting with creditors while awaiting the potential distribution of workers’ compensation benefits, when the reduction in income is caused by the injury.” In this case, the claimant was not working for the employer because she had been furloughed due to COVID-19.  As such, Judge Owens found that her “reduction of earnings is not a result of her work-related accident” and therefore no advance was due and owing to the claimant. See Paradise, Kyley v. Global Hospitality Management/MEMIC Indemnity Co., OJCC No. 20-004078KFO (Evidentiary Order on Claimant’s Motion for Advance dated May 21, 2020 (citations omitted.)

The decisions amongst the various Offices of Judges of Compensation Claims may vary on a case-by-case basis. In general, it appears that JCCs prefer employer’s/carrier’s to limit exposure by coordinating appointments that the claimant is able to drive to, without the need for providing means of transportation.  Any COVID-19 affirmative defenses need to be listed on the Uniform Pretrial Stipulation or same will be waived as a defense.  And when determining whether an advance may be due and owing to an injured employee, the employer/carrier should further investigate whether the claimant’s reduction in income is due to the industrial accident or rather furloughs due to COVID-19.

Remember that coronavirus/COVID-19 exposure claims are being treated as occupational injuries and/or exposure.  These claims have a higher burden of proof and require the claimant to use a clear and convincing burden of proof to prove causation in relation to Florida Statute Sections 440.01(1) and 440.151(1)(a) and (2).

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This article was written by Amanda Mitteer Bartley with Chartwell Law. Article link is below:

https://www.jdsupra.com/legalnews/various-effects-of-coronavirus-on-96202/

Legislative Activity Update – FL Senate Bill 292

The state of Florida has passed Senate Bill 292.  This bill is responsible for defining the terms “loss run statement” and “provide”; requiring surplus lines and authorized insurers, respectively, to provide insureds either a loss run statement or certain information within a certain time frame after receipt of the insured’s written request.  This also requires insurers to provide notice to the agent of record after providing a loss run statement and prohibits insurers from charging a fee to prepare and provide one loss run statement annually.

Effective Date: 1/1/2021
Last Action: 6/22/2020 – Chapter No. 2020-51
Bill Text: Web Page | PDF

See the source image

Florida – Effective January 1, 2021, FL law changes for providing Loss Runs to the insured as well as notification to the Agent of Record.

  • An insurer shall provide loss runs to an insured within 15 calendar days after receipt of the insured’s written request.
  • Loss runs provided must contain the claims history with the insurer for the preceding 5 years or if history is less than 5 years then all years must be provided to the insured.
  • They can be electronically provided, allowing access through a secure website login or generate documents and mail.
  • The insurer must notify the Agent of Record that loss runs were provided to the insured at the time they are provided.
  • An insurer is not required to provide loss reserve information.