Three Ways to Prevent Abusive Workers’ Comp Claims During Layoffs

When making cutbacks, employers have to plan for any number of contingencies says noted employment law authority of Wilmington, Delaware Attorney Margaret M. DiBianca. One such contingency that often goes under the radar is the possibility of fraudulent workers’ compensation claims. After counsel has given its stamp of approval to the list of employees selected for layoff, employers are best advised to turn next to the ways they can protect themselves from a potential increase in workers’ comp claims.

Here are three ways to protect your business from abusive workers’ comp claims relating to layoffs:

1-Use Exit Interviews to Document the Absence of Injury

Conduct an exit interview with each employee who is subject to layoff. Ask the employee to complete an exit questionnaire, which should include a question about whether the employee has suffered a workplace injury and, if so, whether the injury has been reported. Also include a question about the overall safety of the facility and the specific safety of their work environment. Even if that employee never brings a claim, the affirmative statement by many employees attesting to the safety of the workplace can serve as important evidence in any fraudulent workplace claim. Always have the employee sign and date the questionnaire form.

2-Be Kind

Kindness goes a long way in every facet of the employment relationship and becomes positively crucial when there are cutbacks and layoffs. By shooting straight from the hip when it comes to the reasons for the reduction in staff, employers are much more likely to gain the support of workers (workersxzcompxzkit) rather than get gunned down by a negative and hostile workforce. Employee-assistance and outplacement programs are two common ways employers can offer their help to employees after a layoff. The bottom line is employees are less likely to file a fraudulent claim if they believe their employer sincerely cares about their welfare.  

3-Consider Offering a Severance Package

Many employers are surprised to learn that a “severance package” need not provide for payment of several months of salary and health care. A severance agreement is far simpler. The company agrees to pay the employees and, in return, the employees waive all claims they may have against the employer. This is your best protection against fraudulent workers’ comp claims, but only if it is a valid and enforceable contract. To make sure you get what you expect, first consult with legal counsel and have them draft a solid severance agreement for your future use.

Try the WC Cost Calculator to show the REAL COST of work comp.

Look at WC 101 for the basics about workers comp.

 Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.

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By: Margaret DiBianca

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