Can cutting benefits for part-time employees add to workers’ compensation costs? This was the question posed in an October 2014 Business Insurance information piece. Due in part to rising healthcare costs and the demands of the Affordable Care Act, major retailers including Wal-Mart, Target Corporation, The Home Depot, Walgreens and Trader Joe’s had all announced cuts to part-time workers’ employee benefits. Now, nearly three years later, workers are still struggling to find full-time work and access to that elusive benefit package. Instead, they’re taking on part-time roles that often offer less safety training and create fraud-inducing resentment, which can lead to an unforeseen stretch on workers’ comp claims.
In December of 2016, the Economic Policy Institute released a report that found 6.4 million part-time workers were still on the hunt for a full-time gig - a number that remains 44.6 percent higher than the pre-recession 2007 statistic. And with UCLA economics professor Chris Tilly telling CNN that “the practice of offering part-timers a much-reduced benefit package is close to universal,” the possibility of hidden costs and risks for businesses adopting the practice remains high.
Safety experts say part-time employees may receive less safety and job training than full-time workers and often are less experienced and skilled at staying safe. Using a higher number of part-time workers to cover a company’s labor needs also means more employees who could potentially be injured and file a claim. A higher number of claims could generate higher workers’ compensation insurance prices for employers, cutting into any cost savings from group health plans.
As George Boué, Vice President of Human Resources at real estate development firm Stiles Corp, explained in the Business Insurance article, most part-time workers are motivated to make a good impression and become full-time employees at their companies. But when they are held back from full-time employment due to health care costs, “That does not create a high level of trust… I think that there can be a greater propensity for either safety issues or workers’ comp claims,” Boué said.
And there is cause for concern in regards to questionable claims on the rise: According to a National Insurance Crime Bureau report, questionable claims numbers were on the rise since from 2010 to 2013.
Any employer considering a strategy of moving toward a more part-time-based workforce needs to consider the longer-term ramifications that could include a number of cost drivers:
Increase in human resources expense to find and hire the additional workers
Additional cost and frequency of training new employees and acclimating them to the workforce
More management time spent to oversee a potentially less skilled or motivated workforce
From a safety perspective, there are a number of factors to also consider when dealing with a potential part-time workforce, including:
An under-motivated workforce that may be less accepting of a safety culture within an organization that has just cut their hours to save money
Making sure all employees - part-time or full-time - are equally trained in safe work practices
The additional workload placed on supervision to oversee additional employees, provide the training and guidance to accomplish the daily work tasks
The potential impact on worker moral, the overall cost of loss, and the long-term costs associated with workers’ compensation insurance
The process of accident investigation may have to be greatly enhanced as many part-time workers have other jobs where they may be subject to an accident or injury as well. There are many more aspects to consider and assess before an employer should make the decision to turn to a part-time workforce, just to cut some medical costs and avoid red tape.
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