Workers compensation claims adjusters who have retailers as insureds, must prepare for the affect of the upward bound economy. With markedly increased growth for retailers, claims have the ability to rise in three distinct areas.
- HARD KNOCKS OF OPPORTUNITY
It will be easier for an employee out on a comp claim to find another retail position to work while collecting.
Retail worker’s compensation claims are more transient than an artisan or professionally licensed occupation where the opportunities for relocation are less prolific. The multitude of positions available and the transference of skills in most of the retail sectors create an environment where employees have the leverage in a strengthening economy. Median turnover rates for part-time retail workers jumped back up to 74.9 percent in 2013, according to Hay Group, a management consulting firm cited in a September 23 2014 CNBC article . The availability of positions is on the rise again, and so with it will be the ease for an employee to find work. As there is a churn of labor, retailers often compete for the same talent, and are willing to be less stringent in their screening processes, more apt to lower some of their standards and for smaller independent retailers, may even hire help off the books.
To retain workers, larger companies have raised their pay, but this also has the effect of creating an enticement for an employee to change companies to get a better paycheck. Allegiance to a retailer is often lacking as employees in retail have felt the whiplash effect of economy as they were cut, replaced, merged and placed in reduced positions of earnings and advancement.
This is a fertile forest of opportunities growing for retail workers compensation claims to increase in volume and in level of deceit.
- DECEIT OF GOOD INTENTIONS
Not every employer/ employee relationship is adversarial. A spike in bad claims can occur when everyone involved is just trying to help each other out.
As it becomes harder to locate and finance new hires in the strengthening market, some Mom and Pop stores will struggle to keep the people they have. It has happened that an employee with a workers’ compensation claim is asked to come in and help out some. This happens at first when the employee’s injury is legitimate. The employer, grateful for the assistance allows the employee to collect for the worker’s compensation claim albeit while continuing to work. It is a way for the store to supplement the wages and keep the store operational while temporarily reducing payroll. The employee can be paid off the books, or through deferred or non wage compensation. If the person on a workers’ compensation claim happens to be a principle of the company, then the ability to extract non payroll disbursement is even easier.
An employer can also be complicit in allowing an employee to work for them while collecting workers compensation from another employer. The turnover rate of a retail work force creates lots of opportunities for public and proprietary records to be camouflaged so no red flags appear on first perusal. When an employee that works for three employers in the year, records don’t necessarily show that there was a 6 month overlap of being on workers compensation from store 2 while working for store 3.
- NO TROUBLE, NO WORRIES
Fraud and abuse is not limited to the small companies. Larger companies allow the claims to rise, unchecked as a cost of doing business. To let a trouble-employee collect workers compensation without reporting apparent abuse to the claims administrators is often seen as a way to maintain morale, without “sicking” the insurance adjuster on the employee, and without bringing back a troublemaker. To Return To Work is not a desire for the manager of a trouble-employee anymore than it is for the employee. Enough work is coming and profit numbers are high enough that it doesn’t matter how much is paid in workers compensation claims; profits are coming in fast enough to make up for the loss and then some. It would be disruptive to the core business of selling, if time were devoted to the claims process of bringing a problem-employee back to work.
GOOD TIMES, BAD TIMES -In a recession a claimant who is well enough to return to work, might not have a job to return to, or at least not the hours needed. There are fewer opportunities for fraud and more potential for simply malingering. However, with a lower unemployment rate, if a claimant has an opportunity to collect and if there is no desire to return to the insured company, then there is a way to try out a new employment position before ending their claim. Of course there is also the realized benefit for those who are so tempted to collect the workers compensation check and a pay check from a new employer.
Backgrounds, Social Media Searches, and Surveillance of activities are often the most cost effective answer to quickly determine the validity of the claim. Working with professional field investigators and being diligent is the only way to keep control of the claims and reduce non deserved claims as the flurry of economic activity heats up in the retail sector.