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June 06, 2012

How the Recession Impacts Injured Workers

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Posted in News and Events

Recession Impacting Return to Work of Injured Workers: Study Examines Role of Workers’ Compensation Systems

CAMBRIDGE, MA, November 29, 2011 –Against a backdrop of high unemployment, some injured workers may face even greater challenges in returning to work, leading to potential increases in the duration of disability, according to a new study, Factors Influencing Return to Work for Injured Workers: Lessons from Pennsylvania and Wisconsin, by the Workers Compensation Research Institute (WCRI). 

WCRI’s report says that although injured workers in Pennsylvania and Wisconsin have typically reported better return-to-work outcomes than workers in other states, the economic downturn has diminished the impact of selected workers’ compensation system features that facilitate return to work for longer-term injured workers in these two states.

According to the study, poor economic conditions have made it more difficult for some employers to offer light, transitional, or modified duty to assist their injured workers in returning to sustainable work or to provide permanent job accommodations for workers with restrictions.

“How workers’ compensation system features impact injured workers’ return-to-work prospects is particularly relevant in the context of the economic downturn. Identifying system features that promote early return to work and understanding those that create barriers to return to work can help policymakers focus on win-win opportunities for both injured workers and employers.” said Dr. Richard Victor, Executive Director of the Cambridge, Mass.-based WCRI.

While recognizing that employers and injured workers play a central role in the return-to-work process, the study used a case study approach to identify the features of the Pennsylvania and Wisconsin workers’ compensation systems that promote timely, safe, and sustainable return to work as well as those that create barriers.  The study found that:

  • Clear standards and processes for temporary disability benefit termination that provide mutual financial incentives for employers and injured workers to return to safe and suitable light, modified or transitional duty during the healing period can minimize a worker’s detachment from the workforce, reduce the likelihood of longer-term absence, and thereby reduce indemnity costs –payment of lost wages – for employers.
  • Medical providers play a central role in return-to-work efforts. Public policy decisions that impact the delivery of workers’ compensation medical care can affect indemnity benefits through the return-to-work process.
  • The transition from temporary to permanent disability benefits is a key leverage point. The most important system design approaches for facilitating return to work encompass strong, bilateral incentives for pre-injury employers to return workers with permanent restrictions to work and for injured workers to accept legitimate offers of employment.
  • Workers with permanent restrictions are especially vulnerable to difficulties and delays in return to work and these workers represent several impact opportunities from the standpoint of workers’ compensation system design.  The difficulties these workers face are magnified further in the economic downturn and put a public policy spotlight on how workers’ compensation systems address workers who are unable to return to work with the pre-injury employer – particularly in the areas of lump sum settlement practices and the availability of vocational rehabilitation and retraining benefits.

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