In the case of Gregory v. Cott, a California court had to decide whether a homecare worker attacked by an Alzheimer’s patient can sue the family for negligence. Two out of the three appellate judges deciding the case thought that homeworker had “assumed the risk” of that violence and that her only remedy would be workers’ compensation. The dissenting judge felt that this was going too far and essentially stated “Given the increased risk of harm to Ms. Cott’s in-home caregivers, fairness demands to caregivers bare responsibility for that risk, and not shift the burden of loss to the hapless worker who happened to be assigned to the home of one suffering from Alzheimer’s disease rather than, for instance, one recovering from foot surgery….[T]he claims at issue here should be subject to the usual laws of negligence, including the comparative negligence, if any, of plaintiff.”

My comment: What is interesting is that neither judge discussed the possibility that this claim was governed by workers’ compensation exclusivity. In addition, it’s very possible that the employee could have sued the employer for lack of proper training in how to deal with potentially violent Alzheimer’s patients.

“You’re off to great places, today is the day: Your mountain is waiting, so get on your way!” –Dr. Seuss

This issue discusses:

• Editor’s Column: 10 Personnel Management Challenges for CEOs
• Make Sure Volunteer Workers Carry Workers Comp
• EEOC Credit Report Lawsuit Dismissed
• 2012 EEOC Claims Near 100,000 Mark
• An Employee Referral System That Works

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: 10 Personnel Management Challenges for CEOs

Over the years, I’ve had the chance to do hundreds of three-hour workshops for CEOs about personnel practices. In light of this experience, I’d like to share 10 challenges that CEOs and executives face when it comes to personnel management.

1. The difficulty in finding new talent. The good news is that most of these employers expect to do more hiring than firing this year. The challenge is that most of the good employees are already taken. Perhaps the biggest mistake is thinking that you find these people, as opposed to attracting them. To attract talent, you have to position yourself as an employer of choice – a great place to work. Companies such as Costco, Southwest Airlines, and my beloved In-N-Out Burger do this so well that they don’t need to go find anybody.
2. Problems in retaining top talent. This is the flipside of the conversation above. In the marketplace of talent swapping, some companies will win, while others lose. To what degree do you have a philosophy, strategies, and tools to make sure you are retaining top talent? Do you understand why people either come to work for you (through a post-hire survey) or why they leave you (an exit interview)? Do you tap into their opinions and concerns with surveys, focus groups, and one-on-one conversations? Remember: Turnover is contagious.
3. Lack of managerial leadership. When we run 75 miles an hour and promote people into management, chances are that this happens with little or no training. Fact is, half of managers in your industry are above average and half are below average. Guess who gets more training? You need to train managers in business acumen, communication, basic compliance, team building, and systems understanding. Most important, they need training in time management so that they can spend 80% of their time adding the value they can – and only 20% doing administrative tasks.
4. Low employee engagement. This is easy to understand when we’ve just gone through a difficult recession, which has limited raises, cut benefits, and stunted growth opportunities. On top of that, it feels that we have a federal government that fosters an us versus them mentality with the workforce. Perhaps the question for leadership is “how can we help our employees?” How can we help them become more productive so they can grow in their careers? How can we help them find greater meaning in the work they do every day? How can we help them gain more control over the direction of their career? As Shakespeare stated so eloquently, “To work we love with delight we go.” What would it take for your employees to love the work they do every day?
5. Failure of management to benchmark or improve performance. Performance management is one of my favorite subjects. To begin with, do you have a specific goal for improving performance? Sure, you want sales to increase by 10%, but do customer service reps, the receptionist, and the CEO have a goal to increase their specific performance by 10%? The next question is: What are you trying to improve? What aspect of performance is most important? If you have a high growth company, perhaps what matters most is quick hiring, onboarding, and training performance. If you’re a restaurant, perhaps your food is great but your wait staff is abysmal. Focus on your strategic objective.
   Here’s a question I encourage everyone to ask those who report to them and, if you’re the one doing the reporting, to ask yourself: “What are the three most important things this employee does every day?” What good is a performance management approach if you can’t be on the same page as this question? When you have determined this, ask: “How would you know if you were doing your job well without having to ask me or without my having to tell you?” Once the employee can answer this question to your mutual satisfaction, you have legitimate benchmarks. The question then becomes: How can you improve? What training, resources, support, etc. do you need to supply this employee so they can perform at their best? Remember, as both Peter Drucker and Dr. Deming said: Nine out of ten employees want to do a good job every day; it’s the system they find themselves in that creates problems.
6. Misaligned compensation, benefits, and incentives. Here’s another of my favorite subjects. Exactly why do you have healthcare, 401(k) or other benefits? Do they help you to hire better talent? If so, how would you know? Do benefits help you retain talent and improve performance? How would you know? If these benefits don’t tie into your strategic objectives, the chances are that you’re wasting many of them – and at a hefty price tag. I’ve begun working with a genius who is turning the benefits sales process on its head. By running algorithms of employee data and healthcare expenses, he can define the optimum benefit mix for an employer, which it then takes to the marketplace – as opposed to the marketplace telling the employer what plans are available for their demographics. Finally, how benefits are managed can impact productivity. For example, sick pay can actually grow healthcare expenses and reduce productivity. Not surprisingly, San Francisco and now Portland actually require employers to offer sick pay. How about providing wellness pay or paying people for being at work? Bear in mind that any incentive you use has both negative and positive consequences.
7. Failure to execute strategic initiatives. We live in a rapidly shifting business environment that requires us to manage change quickly and successfully. If you haven’t done so, please watch the recorded webinar I did on Change Management and have your entire management team do the same. (If you don’t have access to HR That Works, let me know and I’ll send you a link to it). The webinar makes two major points: First, one of the traps of the hero is over-commitment. This holds true of both individuals and the company as a whole. When we over-commit, we tend not to live up to our commitments – which generates mistrust. Secondly, strategic initiatives require buy-in. Just as in sales you want to make the purchase the buyer’s idea, when it comes to change management, you want it to be the idea of your supervisors and employees. Give them some ownership of the idea and you’ll find them onboard with it. Because change will remain a constant, we’ll need to keep, coaxing, encouraging, and inspiring each other towards growth. When we stop the over-commitment and focus on execution, we’ll keep growing the bottom line.
8. Finding time for management. Too many executives and managers mismanage their use of time so badly that they’re on overload and unable to take on any growth objectives. Most top CEOs I know take at least a few days a month away from the job so that they can work on the business instead of just working in the business. Google is smart enough to allow its employees to do this one day a week. As Stephen Covey reminded us in the Seven Habits of Successful People, you need to keep sharpening the sword. Everyone in your company needs to understand and execute time management techniques. I’ve produced an HR That Works Time Management Training Module that can help you and your managers with this.
9. Lack of commitment to or interest in human resources. I realize that many business owners and executives feel that HR is boring, or worse. They didn’t have to know anything about it to start a business. Even though they often have little or no idea on how to run an HR department or function, in one-on-one meetings with their peers in Vistage, executives usually describe personnel issues as the major challenge facing them. The fact that employee relations just isn’t their thing provides an incredible opportunity for HR professionals to offer the expertise needed.
10. Failure to understand the bottom line potential of HR. Business owners are revenue animals who often don’t see personnel practice as generating revenue. This has been a long-standing uphill battle for HR. There’s a reason why Fast Company magazine years ago published an article, “Why I Hate HR.” In reality, many companies have great HR practices which form the foundation of their bottom line success. For example Jack Welch stressed the importance of HR practices as an economic driver in his years at GE. In fact, he’s still talking about it.

If you own, run, manage, or advise a company, addressing these HR challenges provides a unique competitive advantage!

Make Sure Volunteer Workers Carry Workers Comp

The California case of Diane Minish v. Hanuman Fellowship carries a valuable lesson for anyone involved with nonprofit organizations.

After Diane Minish, a volunteer worker with the nonprofit Hanuman Fellowship was accidentally thrown from a forklift, she sued the organization for negligence. Hanuman argued the exclusivity of Workers Compensation as a remedy, claiming that its Comp policy covered the plaintiff. Although Minish did receive comp benefits, she felt they were too low – and so she sued for more. As in many states, under California law, “private, nonprofit organizations are not required to provide [Workers Compensation] coverage for volunteers (see §§ 3700 [requiring coverage for employees]; 3352, subd. (i) [volunteers are not employees]), section 3363.6 allows them to do so if they choose.” Although the statute is awkward and disjointed, it provides, in essence, that a volunteer becomes a covered employee if the board [of the nonprofit] so declares in writing before any work-related injury.

Minish argued that she had not agreed to this arrangement:

“Plaintiff contends that under section 3363.6, a declaration rendering volunteers covered employees does not become effective unless and until an affected volunteer has notice of the declaration and voluntarily accepts Workers Compensation coverage before any injury. Thus, because the undisputed evidence establishes that she did not receive such notice and did not voluntarily accept Workers Compensation coverage before the accident, the Act was inapplicable. “

The court disagreed, ruling that

“Here, of course, without the slightest advance warning, Hanuman plunged Minish into the toils of the Workers Compensation system not only without her knowledge, but – as soon as she learned of it – very much against her will. Section 3363.6 does not explicitly require notice to volunteers that they have been deemed volunteer/employees. Nor does the statute provide that such status must be accepted by each volunteer individually…. In short, we reject the plaintiff’s claim that section 3363.6 imposes a notice and acceptance requirement.”

However, the court dismissed the argument that Minish was “estopped” from denying the exclusivity because of the fact that she used the Workers Comp system. So, although the suit will go back to court, chances are that she will lose in her attempt to claim negligence.

The bottom line: Whether you sit on a non-profit board, run a non-profit, or advise one, make sure you do what’s required under state law to make sure that your volunteers: a) sign liability waivers and b) get Workers Comp coverage. Doing so will help avoid an ultra-expensive negligence claim. Also, make sure that your insurance coverage addresses such claims where the doctrine of workers comp exclusivity does not apply.

EEOC Credit Report Lawsuit Dismissed

The EEOC received plenty of publicity from its 2010 lawsuit against Kaplan Higher Education (EEOC v. Kaplan Higher Educ. Corp., N.D. Ohio), alleging that the company’s use of credit reports as a factor in hiring decisions for financial aid positions had a discriminatory impact based on race and, thus violated Title VII of the 1964 Civil Rights Act. A federal district court dismissed the EEOC suit on January 28, 2013.

Kaplan did not track the race of its applicants, and was not required to do so. To show a discriminatory impact based on race, the EEOC hired expert “raters” to determine the race of applicants by pictures and other information, and thus evaluate whether Kaplan’s practice had a discriminatory impact. In dismissing the case, the court held that the commission failed “to present sufficient evidence that use of ‘race raters’ is reliable.” The court also chastised the EEOC saying that, “It is clear that EEOC itself frowns on the very practice it seeks to rely on in this case and offers no evidence that visual means is accepted by the scientific community as a means of determining race.” The court concluded that because EEOC’s expert “relied on data obtained by unreliable means … whether the jury could ultimately ‘correct’ the process employed by the ‘race raters’ is irrelevant.”

The court ultimately dismissed the case because the EEOC did not provide sufficient evidence to make its case.

Don’t be surprised if the commission keeps pursuing claims that the use of tests, credit reports, and other background checks has a discriminatory impact on blacks, Hispanics, women, and others. The EEOC will simply look for another case and try to correct the evidentiary issue that resulted in the dismissal of its claims against Kaplan.

2012 EEOC Claims Near 100,000 Mark

The Equal Employment Opportunity Commission handled nearly 100,000 claims in 2012. According to the commission’s press release, “The U.S. Equal Employment Opportunity Commission (EEOC) …received 99,412 private sector workplace discrimination charges during fiscal year 2012, down slightly from the previous year. The year-end data also show that retaliation (37,836), race (33,512) and sex discrimination (30,356), which includes allegations of sexual harassment and pregnancy were, respectively, the most frequently filed charges. The fiscal year 2012 enforcement and litigation statistics, which include trend data, are available on the EEOC’s website.

The press release added that:

“In fiscal year 2012, the EEOC filed 122 lawsuits, including 86 individual suits, 26 multiple-victim suits (with fewer than 20 victims) and 10 systemic suits. The EEOC’s legal staff resolved 254 lawsuits for a total monetary recovery of $44.2 million. EEOC also continued its emphasis on eliminating systemic patterns of discrimination in the workplace. In fiscal year 2012, EEOC completed 240 systemic investigations which in part resulted in 46 settlements or conciliation agreements. These settlements, achieved without litigation, secured $36.2 million for the victims of unlawful discrimination”

What the EEOC didn’t mention is that it’s backing off a bit on its aggressive litigation stance due to a combination of tight budgets and mixed courtroom results. For example, as mentioned in the previous article, a federal district court recently dismissed the commission’s well-publicized credit background lawsuit.

I for one, hope the EEOC focuses more on education and conciliation, rather than litigation.

An Employee Referral System That Works

Although referral programs can provide a valuable source of new workers, many employees are reluctant to provide referrals because they’re afraid that they’ll take the blame if the new hire doesn’t work out.

Here are a few ways to reduce this fear:

• Provide a worthwhile financial incentive for referrals. Money can do wonders to overcome the fear of embarrassment.
• Consider a mix of contests, raffles, etc. in addition to cash making referrals more fun and competitive.
• Think in terms of the new employee’s lifetime value. If a worker can earn the company $50,000 per year for an average of three years, how much would you be willing to invest to get this return? If you pay recruiters 10% to 30% of the new hire’s annual salary, does it make sense to pay an employee only 1 or 2% for a referral?
• Space out the referral bonus in quarterly payments, based on specific benchmarks. For example, you can give an initial payment for the referral, a second if the employee is hired, another one at six months, and the final one on the new hire’s anniversary date.
• Train employees on how to approach prospects and make it easy for them to tell the prospect your company story. Give them a pamphlet, some type of document, or a web page link that defines the business and the opportunity the position offers the prospect.
• Finally, measure the program’s results on a regular basis so that you can keep improving it.

Form of the Month

Workplace Violence Assessment Survey (PDF) – There’s no doubt that violence has raised its ugly head in the workplace. Here’s a form to help you assess the exposures at your company.

Podcast

Click here to to listen to this month’s newsletter podcast.

REPRINT POLICY: Reprints are welcome! All you have to do is include the following notation with reprinted material:

©2013 Reprinted with permission from HRThatWorks.com, a powerful program designed to inspire great HR practices.

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“We conclude a violation of section 132a cannot be the basis of a tort action for wrongful termination.”

Keeping with the theme of work comp exclusivity a California Appellate court ruled in Dutra v. Mercy against an employee’s effort to broaden the scope of work comp retaliation. Known in California as a 132a claim, the court declined to expand liability to a full blown wrongful termination claim (which is in fact allowed in many other states) . You could not have picked a more wonderful employee to be brave enough to make such a claim after she was fired for gossiping when she should be working, for check fraud and falsifying her time card.

Note: City of Moorpark did hold that Labor Code section 132a does not provide an exclusive remedy against disability discrimination and does not preclude an employee from pursuing remedies under the Fair Employment and Housing Act (FEHA) and common law wrongful termination remedies. (City of Moorpark, supra, 18 Cal.4th at p. 1158.)

In this short video, Don Phin goes over the The Bermuda Triangle of Employment for Human Resources Departments around the country.

Return to Work (RTW) and Stay at Work (SAW) programs are part of a business’ strategy to retain valued employees and to enhance the productivity of its workforce. “The goal of a return-to-work program, sometimes called a transitional duty program, is to make job changes or provide job accommodations that return individuals to work who are absent for workers’ compensation or disability-related reasons.”[1]

As with workplace accommodation programs, a RTW program should have clear written policies articulating each party’s responsibilities. Accurate job descriptions including the physical demands of particular essential functions should also be developed. This helps everyone in the process (e.g., doctors, rehabilitation staff, and accommodation specialists) understand the job requirements. A good understanding of the job demands and the employee’s limitations and abilities is the starting point for determining if effective job accommodations will enable the employee to return to or stay at work while still recovering from injury. Effective job accommodations insure that the employee returns to work as soon as possible without risk to the employee or employer.

Of the employers who called JAN for technical assistance, most (82%) were doing so to retain a current employee.[2] Thus, most of JAN’s publications contain accommodation solutions that could be generalized to a RTW or SAW situation. JAN also offers a number of examples specific to RTW.

For instance:

Situation – A warehouse employee was transitioning back to work with lifting restrictions after being injured by falling boxes of product.

Accommodation Solutions:

• Provide overhead structure for lifting devices;
• Place frequently used tools and supplies at or near waist height;
• Provide low task chairs, stand/lean stools, and anti-fatigue mats;
• Provide compact lifting devices to push and pull supplies and tools from storage;
• Make wheelchairs, scooters, industrial tricycles, or golf carts available; and
• Provide aerial lifts, rolling safety ladders, and work platforms.

The full publication, Fact Sheet Series: Job Accommodations for Return to Work is available for download. If you need additional guidance in identifying a device, or need information on where to buy the device, please call one of JAN’s Consultants.

Below are resources to learn more about developing your company’s RTW or SAW program:

• U.S. Department of Labor’s Office of Disability Employment Policy Return to Work Toolkit
• Disability Management Employer Coalition (DMEC)
• Return to Work Matters
• Society for Human Resource Management (SHRM) Disability Employment Resource Page (available to nonmembers and members alike)

- Louis E. Orslene, MPIA, MSW, Co-Director

 - Return to Work: A Snapshot (Part 2 of a Continuing Series, Read Part 1)

As more than 80% of inquiries to JAN involve retention of a current employee, the importance of contributing technical assistance to stay at work and return to work programs is vital. Both practices ensure valued employees are retained, productivity is maintained, and recruiting and on-boarding costs are saved. This is the second article in a series about these important practices in the workplace. The following article results from a collaboration between JAN and Return to Work Matters (RTW Matters). RTW Matters is a practical online resource for employers and disability professionals. Look for the Join Now link on the left hand side of the RTW Matters homepage.

He Ain’t Heavy…He’s My Employee

In the spring of the year in 2008, on a cold and dreary day, a freezing rain fell to coat everything it touched. Dan had just parked the CDL class truck and was stepping down to move on to his next task. What Dan didn’t know was that the next task would be a trip to the emergency room. When exiting the truck, Dan fell down and landed on his knee, causing a tear that eventually lead to a surgical repair. Two months later, Dan was told he could go back to work, but would have some temporary restrictions. Although his employer didn’t have anything he could do within his physical capacity, they would try and “come up with something.” For the next seven months, Dan remained at home and collected compensation pay at two-thirds his salary.

Although he made use of the time by attending physical therapy and follow-up doctor appointments, Dan was getting bored and a little worried about whether he would ever return to his job. Dan missed the gang at work and would frequently stop by for a chat and any news on possible light duty assignments. Finally, an opportunity came up for Dan to return to work, and even though it was limited to four hours a day of snow plowing, he happily accepted. Eventually, Dan was released to full duty and returned to his heavy equipment mechanic position, but to everyone’s dismay, Dan’s knee started to give him problems within just a few weeks. When the MRI showed another tear, a second surgical repair was performed and once again, Dan was out of a job.

In desperation, Dan scheduled an appointment to talk with the company’s return to work coordinator, who immediately contacted the ergonomic specialist to schedule a meeting for the two of them to meet with Dan and his supervisor to form a return to work strategy. A job analysis was completed, which determined that the physical ability to kneel and squat were essential to performing the heavy equipment job. Unfortunately, these were the very same physical demands that Dan was restricted from doing on what was now a permanent basis. This could have been the end of the story except that the people involved were a bunch of very determined and creative folks.

An ergonomic evaluation of the work area was completed and another meeting was held to discuss a plan. The only thing keeping Dan from returning to his job was his inability to maneuver and work on the equipment. So, was there another way of maneuvering? Well, research would need to be done and budgets would need to be considered. Dan was told that they would let him know when they had some answers. During what Dan would say were some of the longest days of his life, he stayed home, earned less money and worried about his future.

Then came the day when Dan got the call, asking for him to come in to work for a meeting. The news was good. A hydraulic lift had been indentified that could be used to lift the work product to waist height. This allowed Dan to avoid the kneeling, squatting, and heavy lifting he was restricted from doing, while still allowing him to perform all the duties of his heavy equipment mechanic job. This job modification not only returned Dan to his full time job, it came with an additional benefit; the ability for other workers to use the lift, thereby preventing additional work injuries.

From the efforts of Dan and his supervisor, the ergonomic specialist and return to work coordinator, long term disability was prevented. This not only saved the employer money and a loss of production time by bringing on a new employee, it made them feel good that they had a part in doing the right thing by a valued employee. The other employees recognized the efforts of their employer, which instilled confidence that if they ever met with similar circumstances, they would be taken care of. For Dan, the benefits were huge. He could now go back to being a productive member of society and earn the money he was previously earning. For the community, the benefits were limitless: the return of a member to gainful employment and the prevention of unemployment side effects such as anxiety and depression, that affect the individual and family members. This case had many factors that led to its success, but most important was the great team collaboration, established partnerships, and good communication between the employee, supervisor, RTW coordinator, and all the other team players involved in the case.

The cost of the hydraulic lift? $2,667. The return of a valued employee? Priceless.

For more on lifting devices, the costs and benefits of job accommodation, and effective accommodation practices, contact JAN.

- Article by: Mary Harris & Shelly Frohrip, Contributors, Return to Work Matters.

This case shows how a poorly handled work comp claim can turn into a litigation nightmare. Here the battle is over the production of original medical records. The point is the lawyers, courts, and now you can read this case, which has already cost thousands to litigate, simply because a claim was mis-managed. Note that the claimant also filed a claim with the EEOC in addition to her work comp claim.

I recently joined a very lively conversation in the Work Comp Analysis Group on LinkedIn http://www.linkedin.com/groups?home=&gid=1328307&trk=anet_ug_hm&goback=%2Egmp_1328307

A few salient points were made:

1. Most claims are legit.
2. While it’s easy for folks to point fingers depending on their agenda, all sides impact the analysis. As an example, Paul Jahn contributed this insight:

“An interesting discussion on the perceived stigma of filing a workers’ compensation claim but all in all one that is focusing on outlier claims.

The system (in the US) typically does a pretty fair job of handling and resolving the vast majority of claims. At PERMA (where I am very familiar with the data), 75% of our claims resolve without loss of time and 80 to 90% of the lost time claims resolve with a return to work. Typically we have 10 to 15 long term litigious claims per accident year out of a universe of 3500 or so.

These claims all have to be looked at on an individual basis (and they all tend to be very high cost). I have been doing so for over 20 years and can draw some general conclusions.

1. Most claims that do not resolve in some sort of a return to work start out with a poor relationship between employer and employee.
2. Distrust between providers of coverage and injured workers can make placement in alternative employment a futile effort. An assumption of good faith on both sides could help everyone involved in the system.
3. A poor economy exacerbates systemic problem. Some employers place less value on injured workers when they can be easily replaced and in a tough job market placement in alternative employment is difficult.

As a system designed to temporarily tide injured workers over until they can return to their original employment, the system works pretty well. As a means of dealing with management issues and economic problems that complicate long term serious disability, the system is at best a band aid.”

I couldn’t agree more! Take a look at the Injury Prevention That Works Report.

Inc. Magazine did an excellent article on the history of the workplace you can read by clicking here.

http://www.ca9.uscourts.gov/datastore/memoranda/2011/07/06/10-35729.pdf

The point is this: Just because an injured employee may not be able to return to work due to their injuries…they may be able to return to work by granting them an accommodation. Because Wal-Mart may not have engaged in an interactive dialogue the court let the case move forward. Wal-Mart was also being sued for wrongful termination. As stated by the court:

“Here, considering the facts in the light most favorable to Cox, Wal-Mart terminated her between seven and ten months after she invoked her OWCL rights. Cox has offered evidence that during those intervening months, Wal-Mart disciplined her unjustifiably on three occasions, and refused to accommodate her, even though before Cox invoked her rights, Wal-Mart found her performance acceptable and gave her accommodations. A reasonable jury could infer from this evidence that Cox’s termination was causally linked to her invocation of her OWCL rights.”

One of the HR That Works Member companies expressed the following frustration with their work comp claims:

….is a current member of HR That Works; we would like to know if they are allowed to have current employees sign a document that states in the event of an injury they will utilize the employer’s MPN of Providers through the Workers’ Compensation carrier.

How do we prevent an injured worker from treating outside of the MPN when they are represented by an attorney? Client has a new claim reported last month, employee was released to return to work on modified duties on 04/29/11; Employee did not agree w/the MPN Provider’s diagnosis. He obtained his own Chiropractor & presented a disability form to the employer today. We suspect he has hired an attorney. How do we prevent these claims from treating outside of the MPN? We are seeing a lot of these claims. The insurance carriers are not being very proactive at encouraging these claimants to go back into the MPN; the attorneys are increasing the number of liens which are being tied up in the Liens Unit.

So, we went to our network and Bill Litjen, one of the most knowledgeable experts on Work Comp procedures in California, provided us with a truly complete answer as follows:

This is one of the most misunderstood advantages an employer has in controlling medical treatment of injured workers.  Most brokers don’t understand it nor know how to explain the consequences to the employer if they don’t properly enroll employees in the prescribed timeframes.

Almost all CA WC carriers offer an MPN (Medical Provider Network) as the way to maintain medical control and cost.  This is a standard product and all policyholders are expected to participate.  The State Division of Workers’ Compensation (DWC) regulates how an MPN is implemented.

Anytime the employer changes WC carriers, they need to re-enroll employees in that carriers MPN (very similar to open enrollment for Employee Group Health benefits).   The carrier should provide enrollment forms:

1) Employee Implementation Notice of MPN

2) Acknowledgement of receipt of MPN Information

3) Initial Written Employee Notification RE: Medical Provider Network – (English version)

4) Initial Written Employee Notification RE: Medical Provider Network – (Spanish version)

To enroll employees:

1) Provide all employees with a copy of the Employee Implementation Notice.  This notice will need to add their Name and MPN Effective date prior distribution to employees.  It may be also be provided via email if the employee has regular electronic access to email at work to receive this notice prior to the implementation of the MPN. If the employee cannot receive this notice electronically at work within the required time frame, then the employer has to ensure this information is provided to the employee in writing prior to the implementation of the MPN.

2) Include copies of the Employee Implementation Notice of MPN in new hire information

3) Have every employee verify receipt of the Employee Implementation Notice of MPN.  Keep these signed acknowledgements on file (more on this).

4) Complete and return the MPN Implementation Verification Form to the insurance carrier (This is for their  tracking purposes only and does NOT replace the employers record of the distribution of the notices)

5) Post the Initial Written Employee Notification RE: Medical Provider Network, both in English and Spanish, in a conspicuous location frequented by employees during the work day hours and in close proximity to the workers compensation posting notice (DWC7 Notice to Employees-Injuries caused by Work). The Initial Written Employee Notification RE: medical Provider Network should also be provided to employees at time of injury.

During the enrollment process, the employee will also be given the opportunity to “pre-designate” their own personal physician to treat a work-related injury. This could be a red-flag!  They can pre-designate their personal doctor of medicine (M.D.) or doctor of osteopathy (D.O.) only if: the employer offers group health coverage; the doctor has treated the employee in the past and medical records; prior to the injury the doctor agreed to treat them for work injuries or illnesses and; prior to the injury they provided the employer the following in writing: (1) Notice that they want their personal doctor to treat them you for a work-related injury or illness and (2) provided the personal doctor’s name and business address.

If the MPN enrollment process is not handled this way, Applicant Attorneys will try to gain control of medical treatment outside of the MPN which can significantly increase the cost of the claim.  If the enrollment process is handled correctly, any treatment outside of the MPN is considered “unauthorized” and the employer/carrier is not responsible for payment.

Now that’s what I call an answer! Thanks again, Bill!

David Shields of Partee Insurance had this to add to the above:

“We thought it wise to advise on a couple of things in this article:

• Resigning all employees into a new MPN IF you change carriers is not always the ‘right thing to do’… especially if you have an on-going claim and treatment with the expiring carrier with a different MPN.
• Resigning a “designated physician” when one changes carriers is not necessary… once is enough and that’s normally at ‘new hire’ time OR when you decide to get all employees to complete the paperwork for their personnel file when the employer understands the ‘designated physician’ notification requirement.”

P.S. More info on the MPN and employer rights can be found at http://www.dir.ca.gov/dwc/Employer.htm.