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(c) 2014 Jon L Gelman, All Rights Reserved.

Monday, January 14, 2013

Why Are Workers' Comp Claims Down


The number of worker’s compensation claims have dropped dramatically

Today's post comes from Charlie Domer of the Wisconsin Bar. The decline of workers' compensation is a national issue and the issues raised by Charlie are similar in all jurisdictions.

The Wisconsin Association of Worker’s Compensation Attorneys (WAWCA) just held its tenth annual worker’s compensation seminar in Madison, Wisconsin. (I presented the annual case law update.)  A report on the economic health of Wisconsin worker’s compensation (presented by a colleague on the defense side, Paul Riegel) noted reported worker’s compensation claims have dropped from 55,000 in 2001 to less than 35,000 in 2011.  Based upon the first five months of 2012 reporting, 30,000 reported claims are anticipated to be made in 2012.

Applications for hearing on those claims have also diminished, from 7,000 in 2001 to about 5,500 in 2011.  Again based upon projections, the 2012 number of Applications for Hearing will be about 5,600.

Several potential explanations for this drop were provided including:
  1. The days of asbestosis, silicosis, and similar disease may have ended due to the aging population of those of exposed before the implementation of OSHA in 1970 and the lessening amounts of these substances in the workplace.
  2. Employers argue that workplaces are simply safer, resulting in lesser claims.
  3. The safer workplaces argument is rebutted by employee and Union data that fewer people are willing to make claims in a depressed economy for fear of losing their jobs.  While Wisconsin law assesses a “one year’s wages” penalty against an employer who fires or refuses to rehire an injured worker, in tough economic times, that may not be a risk an injured worker is willing to make.  Anecdotal evidence from a variety of sources indicates viable claims, specifically for “wear and tear” type injuries are simply not being made.
  4. The impact of extending Unemployment Compensation benefits from its initial 26 weeks through multiple extensions may diminish worker’s compensation claims since another “safety net” exists.  Additionally, the availability of Social Security may diminish worker’s compensation claims.  General employment trends also suggest a downturn in the numbers of people working.  The total employment in Wisconsin in 2007, for example, was 2.88 million and the total employed in 2010 was only 2.73 million.  Manufacturing jobs in Wisconsin dropped from 500,000 in 2007 to 425,000 in 2009.  Although employment numbers are rising in education and health, and manufacturing is recovering, construction work is still sluggish.
Whether through fear of reprisal, job security, uncertainty, or a bad market, worker’s compensation claims are down in Wisconsin.  A corresponding increase in Unemployment Compensation claims, claims processed through group health insurance, and Social Security Disability are likely on the rise.  Injured workers should report claims and process those claims through worker’s compensation, the premiums for which have been paid by their employers to justly pay for benefits.

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