Workers' Compensation Insurance and Minimum Wage Increases
Everyone earning minimum wage or paying minimum wage is surely paying attention to discussions in Washington and state capitols across the country about increasing federal and state minimum wage. This is great news for those currently earning minimum wage ($14,500 a year for a full-time employee), but business owners are perhaps a little less enthusiastic at the prospect. Not only does a required increase in salaries cost more in wages, it also has the potential to cost more in workers' compensation payouts.
For or Against Minimum Wage? It's Still the Law
We all know the arguments for and against increasing the minimum wage. Whichever side you agree with, if the law changes, you need to be prepared to roll with it. If you are an employer, look on the positive side - you will be able to retain experienced workers longer, and you will have a larger (and hopefully better quality) pool of applicants to choose from, since people who have been unemployed will now have more incentive to put their kids in daycare and drive to work for you.
Minimum Wage Down Side - For Every Silver Lining, There's Got to be a Cloud!
The drawback to people coming back to work after a long break is that newly rehired workers are more likely to get injured while they're getting back into the swing of things. Many minimum wage jobs are also the most physically demanding. Your new workers may be out of shape and just not in the "safety first" mind-frame anymore. New hires may also be afraid to make an injury claim right away, so a simple muscle strain can turn into a major issue requiring expensive surgery.
The major argument against increases in the minimum wage is the prospect of layoffs. Current employees afraid of getting laid off, either out of desperation or the urge for a little revenge, tend to make more workers' comp claims to give themselves more of a cushion while they seek new work. Spikes in claims like these can make insurance underwriters rather unhappy.
Protect yourself! Who else is going to? (Oh yeah, your insurance company!)
The best way to protect your company from these changes is to keep the lines of communication open with your insurance provider. If they insure your workers' comp claims, they also have a stake in keeping claims as low as possible. Also, be proactive with new recruits with drug testing, background checks, safety training, and pre-employment physicals.
Need Help Making Workers' Compensation Insurance Decisions?
We can help you keep your workers’ compensation insurance premiums and claims in line – regardless of pending changes to the minimum wage. Call us today at (800) 947-1270 or (610) 775-3848 or Contact Us by email.
