Canadian HR Reporter

CANADIAN HR REPORTER April 17, 2017 22 FEATURES DISABILITY MANAGEMENT A case study in HR innovation A look at a revenue-generating solution to long-term workers' compensation claims By Jason Fleming M anaging a long-term worker's compensa- tion claim, where an employee is restricted from completing her pre-injury du- ties, is often a challenging and costly endeavour. Employers are often faced with two undesirable options: 1) offer the injured employee modified work that is non-revenue-gen- erating and increases unproduc- tive wage costs or 2) place the employee on an open claim, with no modified duties, and wait for the experience rating to be im- pacted — likely driving up future premiums. Although this may be a broad and simplistic summary, it repre- sents the reality for many employ- ers dealing with long-term claims. Human resources and business leaders are often forced to choose between the lesser of these two evils when it comes to managing long-term claims. In fact, there is a third option that can lead to reduced claim costs, reduced employer premi- ums, a faster return to work for the injured employee and even an additional revenue stream to the corporate HR department. By choosing to view a long-term worker's compensation claims as opportunities to exhibit an inno- vative problem-solving strategy, organizations can turn these chal- lenging situations into significant organization successes. In certain situations, employers can place an injured employee in a position with another organiza- tion and generate revenue from his work. is does not require the employee to begin working for a different employer. Rather, his employer enters into a business-to-business relation- ship with another organization where it charges for the injured employee's output as a service. As such, the employer gener- ates revenue to offset (or fund) the unproductive wages associated with the employee's modified du- ties. As a result, the employer can provide the injured worker with long-term modified duties with- out having to incur unproductive wage costs or, at least, reducing the total amount of unproductive wage costs. is creates a financially sus- tainable, long-term worker's compensation claim management solution. Furthermore, provided the modified work meets the appli- cable test for reasonableness, if the injured employee refuses the modified duties, she would be ineligible for wage-loss benefits because she is refusing reason- able modified work. is would disqualify the injured employee from receiving wage-loss benefits, which would help reduce total claim costs. Although this situation may sound too good to be true, it can work (and has worked) for em- ployers that have been willing to pursue this strategy. Case study: Professional truck driver A truck driver was on a long-term worker's compensation claim for post-traumatic stress disorder (PTSD) following a workplace accident. He was restricted from working in a truck indefinitely. ere were no other revenue-gen- erating positions or duties for the employee. He was relatively co-op- erative and engaged in the modi- fied duties process. e employer was highly cost-conscious as it operated in a low-margin industry. The employer paid for the employee to become licensed as a security guard; the employer paid for the courses, exam and licensing fee. Working as a se- curity guard was in line with the employee's medical restrictions. e employer contacted organi- zations that were recruiting for security guards on Internet job boards to propose the injured employee perform security work in a business-to-business capacity. Eventually, the employer con- nected with an organization that was open to this arrangement: Company A. The employer's HR generalist attended the in- jured employee's interview with Company A. With Company A interested in having the injured employee perform security work there, the HR generalist negoti- ated the employee's bill rate. e employee was presented with a formal offer for modified duties as a security guard for Company A, which he accepted. e placement lasted about four months. Eventually, the employee was cleared to return to his regular duties as a truck driver and he returned to his pre-injury duties. And the employer suspects the placement at Company A acted as an added motivator for the em- ployee to return to his pre-injury duties. Key outcomes is kind of approach provides three key outcomes: Reduction in unproductive wage costs: Throughout this placement, the employer paid the employee his regular wage of $21 per hour and generated $15 per hour in revenue for his services as a security guard. erefore, the employer's unproductive wage costs dropped from $21 per hour to $6 per hour. Workload reduction for HR team: During the four-month placement, the HR generalist who managed the claim in ques- tion saw a significant reduction in the hours required to manage the claim. Rather than scramble every afternoon to plan the following day's modified duties, the employ- ee was placed on a set schedule at Company A, with defined hours and a clear expectation of work. Company A took on the majority of the work involved in managing the modified duties for this claim. Employer obligations met: By implementing this strategy, the employer met its obligations under the provincial workers' compensation legislation to par- ticipate in the return-to-work process. e employer also met its obligation to accommodate the employee's medical restric- tions under the applicable human rights legislation. It should be noted that a di- rector at the provincial workers' compensation board confirmed the following three points regard- ing this use of this strategy — pro- vided the new work is deemed reasonable, meaningful and safe within the context of the indi- vidual claim: • Is it an acceptable practice for an employer to assign work to an employee on a worker's compen- sation claim that is significantly different from her normal job functions. • It is an acceptable practice for an employer to assign work to an employee on a worker's com- pensation claim that generates revenue for the employer, even if the revenue being generated is not from the employee's normal job functions. • It is an acceptable practice for an employer to assign work to an employee on a worker's com- pensation claim that involves the employee working at a job site of the employer's customer or at the employee's home. e solution will not be applica- ble to all workers' compensation claims. Furthermore, there are a number of challenges involved in the execution this strategy, in- cluding: finding an organization that is open to this arrangement; obtaining the case manager's ap- proval for the revenue-generating modified work; and getting the injured employee to co-operate in the process. However, when this strategy is successfully used, it is a remark- able example of human resources operating as a strategic business partner by implementing an innovative solution to a busi- ness problem that directly impacts the bottom line. By thinking outside the box and pushing the traditionally accept- ed boundaries of the workers' compensation framework, HR can demonstrate its value to the organization. HR departments do not need to be cost centres exclusively — this is a faulty assumption. It requires innovation and creativity, but generating revenue through the HR department is possible and, as identified in the case study, can solve some major business chal- lenges at the same time. Jason Fleming is director of human resources at MedReleaf in Markham, Ont., a licensed producer and distrib- utor of medical cannabis. He can be reached at jfleming@medreleaf.com. During the four-month placement, the HR generalist involved saw a significant reduction in the hours required to manage the claim.

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