This is the fourth blog in a five part series examining ways small businesses can save money by developing an employee handbook or manual. Last week we discussed how companies can utilize an employee handbook to prevent and prevail on discrimination claims. In this blog, we point out how communicating policies and procedures to employees can reduce worker’s compensation costs.

REASON #4: Reduce Worker’s Comp Claims with an Employee Handbook

State worker’s compensation laws impose liability on employers for injuries to employees regardless of fault. The system is designed as a compromise between employers and employees to prevent a plethora of personal injury lawsuits against employers, which could be financially devastating and put companies out of business. As part of this compromise, most personal injury claims which formerly could have been brought by workers have been eliminated, saving business owners the potentially enormous expense of defending against such suits.

Instead, employees are required by law to pursue compensation for their work-related injuries through an employer’s worker’s comp insurer. The benefits available under such a policy are typically lower than what a worker might recover in a personal injury lawsuit. However, like other insurance plans, worker’s comp rates increase substantially after clams are paid against the policy. Therefore, employers have the opportunity to save on these insurance premiums by preventing injuries to employees.

An important method for preventing injuries involves communicating safety policies and procedures to employees, so employees know what to do and where to go under any given set of circumstances. To maintain order and safety during an emergency, for example, the Occupational Safety and Health Administration (OSHA) offers guidelines for drafting an emergency plan, which include:

  1. The emergency action plan must be in writing, communicated to employees, and readily available to everyone in the workplace. The plan should be available on the employer’s premises as well as in the employee handbooks. If a company has fewer than ten employees, the plan may be communicated verbally.
  2. The plan must include certain instructions and information, including basic procedures for employees during emergencies including evacuation plans, the names of employees who have been designated to provide leadership and guidance on the premises during a disaster, fire and safety reporting procedures, methods for accounting for employees following evacuation, and emergency contact information for employees to obtain more information about procedures to follow.
  3. An emergency alarm system must be installed and maintained by the employer and training provided to all permanent and temporary employees who will operate the system, including on-site drills.

A key component of these guidelines involves communicating a plan of action to employees. Since having such procedures in place has been shown to prevent employee injuries, and insurance rates remain lower when injuries are prevented, businesses have a significant cost saving opportunity available to them by developing a safety plan and communicating it to their employees.

Similarly, companies can save extensive costs on worker’s comp premiums in their day to day operations too. Communicating policies and procedures for their facility through an employee handbook provides workers with the information they need to ensure their own safety. It is an important tool businesses of all sizes cannot afford to overlook.

Let the San Diego business lawyers at Gehres Law Library help your company develop or update employee safety procedures specifically suited to your needs. Call us for a free evaluation at 877-333-2420 or (858) 964-2314.