Via Kevin Drum, a consultant’s tale of workers comp risk management. I pass along it reluctantly, for the same reason the storyteller is remorseful:
Back in the late 90s, my team was hired by a large nursery to help them get their workers compensation claims under control. For those that have never worked in the industry, injuries at nurseries are not uncommon. In addition to all of the sharp hand tools used, there is a fair amount of bending and lifting throughout the day. The nursery that hired us was one of the 100 largest in the state, so it was reasonable for them to have a certain amount of employee injuries – but not at the level of frequency or severity that they had been experiencing for a few years. It was really bad; we had been hired because the company’s founder’s sons that now ran the operation recognized that rising insurance costs were about to drive them out of business.
. . . [snip] . . .
We laid out a simple, three-pronged plan. There would need to be some minor capital investments in equipment, there would need to be training on proper lifting technique, and shifts should start with a mandatory 5-minute group stretch. (Remember, they were about to go under with rising insurance costs and we were trying to appease underwriters as well as reduce claims.) For the entire meeting up to that point, our ideas were met with nodding heads and verbal commitments by each brother to change the very culture of safety in their family business.
As we were wrapping up, as an aside, we noted that one of their larger ongoing back injury claimants was an illegal alien. We could close that claim out quickly, we told them, by letting the injured worker know that we would have light duty work for him were he able to legally work for the nursery. Since he wasn’t able, he could be terminated and all future indemnity costs would disappear. As soon as we explained this, the brothers began looking at each other, wide eyed and smiling. I cringed inwardly. I knew we had just made a mistake.
The updated equipment was never purchased, of course. And taking the time to train or stretch was seen as a waste of the company’s time and money. The claims continued to flood in, but now with each claim came notification from the employer that they had “reason to suspect” the claimant was an illegal worker, along with a request to send the light-duty letter so we could avoid making indemnity payments. Over the course of the next year the number of employee injuries increased 20%. But without indemnity costs their annual claims cost decreased 55% — and their insurance premiums went down as a result. They were able to terminate our services the next year with a glowing letter of recommendation.
Today they have moved from being one of a top-100 nursery to being a top-15, and by all accounts are going strong.
The rest of the story, on immigration issues, is also worth a look.