wage continuation

Does anyone utilize a wage continuation program for employees on WC? How has this worked for you? Do you encounter any abuse? Who administers it for your company? We would like to know the pros and cons of wage continuation versus letting the employee get paid by the State. Thanks for any input you can provide.


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  • I don't know anything about an employee being 'paid by the state' while out on a WC injury. In this state, if they draw payment at all, it's from the insurance that the company pays for.
  • "Paid by the state" means payments through the Ohio Bureau of Workers' Compensation to whom the company pays annual premiums. Some companies choose to pay the employee wage continuation through the company's payroll rather than have the state make the payments which then raises the employer's premium that is paid to the state.
  • We pay wage continuation for a period of up to twelve weeks. After that we review the claim to determine if we will continue paying or start letting the BWC pay. We work very closely with the MCO to try to get the associate back to work as soon as safely possible. We also have a transitional work program. This practice has been very cost effective for us.
  • In WA state, "paid by the state" is called "Time Loss" and is paid through the Department of Labor and Industries. "Wage continuation" is called "Kept on Salary" & is paid by the employer. We KOS all of our employees.

    The merits to this program are two-fold: 1) the ee gets 100% of their wages, as opposed to about 65% (Time Loss) and 2) the company benefits as it is the usage of Time Loss that drives up our experience factor, which directly drives up the costs of our premiums (and ee payroll deductions - as they pay a portion as well), so no Time Loss equals less in premium payments. The downside to this program is the length of time an ee is out injured. Anything that lasts less than a couple of weeks - is good (for both x:-)), but anything that lasts more, can become a cash flow issue as well as a round of cost/benefit analysis. I'm not happy with myself right now, because I really need to re-evaluate our practice & come up with a better solution for the long-term worker injuries (we currently pay the entire time). I know 12-weeks was probably picked as it would run congruently with FMLA - but in my case & in our state, I'm probably going to move towards 6-months. Good luck!
  • Sorry I'm late in posting to this question, but I'd caution you to be careful how you set up your wage continuation program if you can under your state rules. Payments for work comp are generally not taxable income, so if you pay wage continuation at 100%, the employee is better off on WC than working, and it will be difficult to get employees back to work!
  • This does not work. Are you kidding. Were is the incentive for someone who is out on work comp to come back to work.
  • You make a very good point. That is where your transitional work program comes into play. Associates don't have to participate in the program, however if the physician has released them for transitional work and they don't do it, the BWC can stop their benefits. The premium savings can be significant by paying wage continuation. On a claim I have right now, our premium savings under MIRA is $2,000, and under TABULAR it's $30,000 for one year. This amount is after deducting the wages we are paying the associate.
  • I too am late on this thread, but our City government has had what we call Workers' Comp Leave Pay for over 25 years. Basically, we provide leave pay for employees injured on the job for up to 3 months, less any benefits received under WC, provided that the injury or disability is determined to be compensable under the provisions of the WC Act. This pay includes the time lost plus going to doctors for follow-up appointments, physical therapy, further tests, etc.

    While this is a rare benefit, it has been a good one, in my opinion. Our employees feel taken care of and in general have less of an adversarial relationship that I have seen in private industry. It has cost us about $18,000 per year in leave pay, most of which usually comes from a few longer lost time cases. The nice thing is that an employee injured through no fault of their own and gets told to stay off for a few days still doesn't lose any income. Most state laws require a 7 day waiting period for benefits to be paid, so without this benefit there would be employees who get no pay.

    Our Payroll has to do some figuring once we get the WC check to insure the employee gets their portion tax-free, but it generally works well, especially since the other third of their income will usually cover the employee's obligation for medical insurance premiums, child support, etc. It just reduces their personal issues and stress.

    As for the logical question of "Where's the incentive to return when getting full pay?", the answer lies in the fact that that shouldn't be within the employee's control. If your panel of doctors have been educated on your light duty policy and understand future referrals to them depends upon their integrity and capability to determine "fakers", and both your WC Carrier and your own organization monitor the claims and stays in touch with the employee, and you take strong action against anyone who is proven to be exaggerating their condition, then there is no issue of incentive.

    I also think our overly fair policy has not put our employees in situations where they truly needed to fight for every dollar by coming up with ways to extend their time off. I've seen lots of questionable situations regarding returning to work in my previous career in private industry.

    I would also like to know who else has such a policy, but based on the response to this post apparently not many do, which is understandable in today's high WC cost market. I just feel ours works fine.
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