Insurance Commissioner Wayne Goodwin said Oct. 27 that North Carolina workers’ compensation insurance policy loss costs will increase an average of 0.6 percent, effective April 1, 2011.
The North Carolina Rate Bureau had requested an average increase of 1.2 percent in loss costs. But a settlement between his office and the rate bureau will result in $7 million in savings for North Carolina business, the commissioner said.
The settlement also resulted in a 4.1 percent increase for assigned risk market accounts. In 2009, the commissioner ordered a 9.6 percent decrease in voluntary market loss costs and no change in assigned risk loss costs.
Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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Court Fired Workers Get More Than Six Months to File Comp Claim
A law requiring fired employees to file workers’ compensation claims within six months of their termination is unconstitutional, Oklahoma’s Supreme Court has ruled in a case involving cumulative trauma.
A trial court in Ponca Iron & Metal Inc. vs. Jackie Wilkinson originally found that Wilkinson was entitled to medical care and up to 52 weeks of temporary total disability benefits beginning in August 2006, court records show.
She was terminated in December 2005 from a job that included keyboard use and filing work.
A Workers’ Compensation Court upheld the trial court’s finding, but a Court of Civil Appeals reversed and remanded the case. On remand, the trial court denied the employer’s argument that a six-month statute of limitations applied to the case.
The trial court held that the statute of limitations in the law cited by the employer “unreasonably singles out employees who have been terminated and have sustained cumulative trauma injuries.”
The trial court also said the law is in direct conflict with a general, two-year statute of limitations for filing cumulative trauma injuries.
Oklahoma’s Legislature enacted the law cited by the employer to curtail fired workers from filing retaliatory workers’ comp claims, court records state.
In ruling on the case Oct. 19, the Oklahoma Supreme Court agreed that the state law is unconstitutional. It ruled that “the classification of injured employees on the basis of continued vs. terminated employment is a false and deficient classification of the larger class of injured employees because it creates preference for members in the continued employment group and results in unequal treatment for certain members of the terminated group.”
The temporary total disability benefits award was sustained.
Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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FedEx to Pay $2.3 Million Over Independent Contractors
FedEx Corp. will pay the state of Montana a $2.3 million settlement over misclassification of FedEx Ground drivers as independent contractors, Montana Attorney General Steve Bullock announced Oct. 21.
The settlement follows a yearlong investigation by Montana that found FedEx Ground drivers are employees, not independent contractors, and that FedEx owed unemployment taxes, penalties and interest, according to the attorney general’s office.
Montana will reimburse drivers $1.1 million for unemployment insurance coverage that was paid by them. The remaining $1.2 million will go to the state’s general fund.
FedEx did not admit wrongdoing in the settlement.
“As a result of the investigation, FedEx will change its business practices in Montana,” according to the attorney general’s office. FedEx Ground will “implement a new pickup and delivery model in Montana,” the office reported.
Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.
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Dear Workforce How Do We Make the Move to a Unified Pay Structure Across Various Companies
Dear Big Task:
Your organization would appear to value a variety of developmental assignments in “training up” its future leaders. Differing pay structures make this a complicated but not insurmountable task. Nonetheless, even though you have already decided to make this change, it would be productive to review the specific reasons that your separate pay structures were created in the first place. It also gives you a chance to explore ways in which this system could be made to work. At the very least, this will uncover specific business conditions or needs that should be considered in any conversion process—especially since the challenge of integrating four pay structures within your organization likely will be highly visible to managers and employees.
In implementing this change, ensure that whichever integrated system you develop effectively meets the business needs of each of the companies. Enhancing leadership development opportunities, as well as performance, are of course your organization’s ultimate goals. There are other considerations, however. The pay structures were probably put in place to address specific competitive labor-market considerations. As a result, your organization will need to “market price” benchmark jobs across each of the companies to make a thorough appraisal of the competitive pay situation. Once this process is complete, a cross-functional team can be created to “level” both benchmark and managerial positions across the companies, independent of the market data, to determine internal job worth. This second step is crucial since internal equity is a major consideration in talent development—and could become a serious issue if similar types of positions are placed in different levels.
The two sets of information then can be combined to create a salary structure that works for the integrated organization. This structure can assume a variety of shapes. Your organization may find that broad grades or broad bands are most appropriate. Or a traditional structure may best suit the organization’s needs. It is important that positions be placed in salary ranges that enable the organization to attract and retain top-notch employees, as well as to reward high-performing employees (particularly potential leaders). Your organization should carefully evaluate, again in light of business needs and strategy, the advantages and disadvantages of each type of salary grade/band structure.
Two often-overlooked elements of this type of conversion are costs and communications. You do not want to set the new salary ranges too high, as cost becomes an issue (especially if the original range was set at a lower point). The goal is to balance your desire to pay people a competitive wage while at the same time ensuring that costs do not spike needlessly. A full business/cost analysis of various alternative structures allows the top management team to make an informed decision. Nor should you overlook the issue of communication. You may need to advise employees and managers of the process and the desired outcomes, as well as the rationale for the change, before starting the process.
Once you begin implementing the new system, be sure to communicate the changes to both managers and employees—again, so they are aware of the business reasons. This will help managers more easily administer salaries for their work groups. If salary adjustments are required to adjust pay levels between companies, these can be done in two or three steps. Compensation is one of the most visible and fundamental business management systems. Care and planning should inform any changes to that system.
SOURCE: Robert Fulton, Pathfinder’s Group Inc., Glenview, Illinois, June 17, 2010
LEARN MORE: Please read why transparency is pivotal when changing pay structure.
Workforce Management Online, August 2010 — Register Now! The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.
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Wages for New York Women Outpace National Average
Women in New York state earned a median weekly income last year of $720, or about 84 percent of the $858 earned by men in the state, the U.S. Bureau of Labor Statistics reported Tuesday, August 10.
Women in the Empire State fared better than other women across the country, who earned a median income of $657, or 80 percent of the $819 nationwide median income brought in by men. But the gap between male and female salaries in New York did not narrow from 2008, when it reached a record high. The numbers reflect workers in full-time wage and salary positions.
“In terms of women making strides, the ratios haven’t changed a lot in the last few years,” said Martin Kohli, a BLS regional economist. “Women have not been making additional gains in terms of closing the wage gap.”
Kohli attributed the relative strength of New York women’s wages in part to the mix of industries in which local workers are employed. Men in New York are more likely than men in other states to be employed in service jobs, such as security guards and food workers, which pay a median weekly wage of $470. In New York, 17.2 percent of men are employed in the service sector, versus just 12.9 percent nationwide.
Meanwhile, factory jobs, which pay a median of $610 a week nationally, are much less common among New York men. Just 4.9 percent of men here work in factories, compared with 8.8 percent nationwide.
“The surprising thing is men who live and work in New York just don’t make a lot,” Kohli said. “A lot of the service jobs, like janitors, are just not particularly high-paying jobs.”
One area in which women in New York were less likely than women in the rest of the country to be employed was in high-paying management, business and financial jobs, which pay $1,138 a week. Nationwide, 16.2 percent of those jobs are held by women, versus just 12.7 percent in New York.
Nationally, the median weekly earnings of women ranged from $518 in Louisiana to $938 in the District of Columbia. In the Northeast, women in Pennsylvania and Maine were the only ones to fall below the national average.
Connecticut’s women had the highest median wage in the northeast, at $824. The state also had the highest wage for men, who earned $1,099.
Filed by Daniel Massey of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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30 Percent Workers Comp Rate Increase Proposed for California
Actuaries for the San Francisco-based Workers’ Compensation Insurance Rating Bureau of California have recommended a roughly 30 percent rate increase for policies incepting January 1.
The recommendation made Wednesday, August 4, by the WCIRB’s actuarial committee must be approved by the governing committee before it goes to the California Department of Insurance for approval or disapproval.
The state bureau’s governing committee is scheduled to meet August 11 to vote on the matter, a spokesman said.
Rising medical costs and the Department of Insurance’s past rejections of rate increases resulted in the need for an approximately 30 percent increase, the spokesman added.
Last year the Department of Insurance rejected the bureau’s call for a workers’ comp insurance rate increase of nearly 24 percent.
Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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Performance Pay a Challenge in Academia
Pay-for-performance programs in academia appear to be gaining ground as cash-strapped state legislatures demand accountability for every dollar.
Yet the success or failure of such programs depends on the thought and care put into them. “[Institutions] need to define what they mean by performance, and they need to align performance expectations with the institution’s vision or mission,” says David Insler, senior vice president and regional leader for Sibson Consulting. Sibson, a division of Segal Co., has worked with more than 100 four-year institutions to help establish performance and pay programs.
Program success also depends on who’s doing the thinking.
Insler adds that most pay-for-performance programs in higher education apply mainly to administration, not faculty.
“The level of participation is critical in addressing the challenges,” he says. “If the chancellor or president of the university and the chief financial officer get together in a room and decide how things are going to work, it doesn’t work. You must involve department heads and midlevel managers for it to work.”
In some cases, a top-down process, complete with review forms, has already been put in place before Sibson or another consulting firm is called in, and, just as Insler observed, it doesn’t work. “More times than not, it’s about fixing the forms,” Insler says.
While the model is gaining acceptance among four-year institutions, applying pay for performance has proved to be a bit dicey in K-12 classrooms. When teachers’ paychecks were tied to students’ performance on standardized tests, some educators cheated to improve children’s test scores and their own salaries.
“In higher education, the challenges are very different from K-12,” Insler says.
Some pay-for-performance programs have targeted faculty at the college level, according to John Curtis, director of research and policy for the American Association of University Professors, an advocacy group for higher education.
“Normally, these programs are imposed top-down from the state legislature to the top university management without involvement of the faculty,” Curtis says. “The impetus … is to show that something’s being done and people are being held accountable.”
When faculty aren’t involved in defining performance criteria, Curtis says metrics often focus on such things as annual graduation rates, which are expected to continuously climb and which don’t necessarily measure educational achievement.
“This is problematic,” Curtis says. “Not all students come to college to get a degree. There is also the idea that anything should increase continuously. At some level, things should be good enough.”
Curtis acknowledges that educational performance can be meaningfully measured. “The best kinds of measures in education are formative,” he says. Instead of tests, students and teachers discuss what’s happening in the classroom. “Use the information to help improve the teaching process, but do it interactively. Don’t focus solely on some kind of measurable outcome,” he says.
Insler agrees that performance measures must be relevant. “You must be careful that what you’re measuring is an actual indicator of the desired outcome,” he says.
Intelligently defining performance is tough, whether in business or academia. “Boiling the idea of academic accomplishment down to one page loses track of what you’re really trying to accomplish,” Curtis says.
Workforce Management, June 2010, p. 4 — Subscribe Now!
Survey Shows Injured Workers Pharmacy Costs Up 6.5 Percent in 2009
Average pharmacy spending per injured worker increased by 6.5 percent in 2009, according to a report on “in-network” transactions released Wednesday, July 14, by a workers’ compensation pharmacy benefits manager.
The increase was driven by a 4.7 percent rise in prescription prices and a 1.7 percent uptick in utilization, according to Tampa, Florida-based PMSI.
PMSI said its findings are based on a review of 5 million customer retail and mail-order transactions conducted from 2007 to 2009. The report excluded data for out-of-network pharmacy transactions.
PMSI’s 2010 Annual Drug Trends Report is available online at www.pmsionline.com/annual-drug-trends-report.
Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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Workers Comp Claimant Cannot Sue Third Party and Administrator
The workers’ compensation exclusive remedy doctrine bars an injured correctional officer from suing an “independent third party” and the party’s third-party administrator, a Connecticut appellate court has ruled.
The ruling in Daniel D’Amico v. ACE Financial Solutions Inc. et al., to be published Tuesday, June 29, stems from injuries D’Amico suffered while restraining an inmate in a youth correctional facility in 1992, court records state.
He suffered neck, back, shoulder, arm and hand injuries and later was diagnosed as suffering from post-traumatic stress disorder, depression, fibromyalgia, hypertension and other problems.
The state provided D’Amico benefits for many of the claimed injuries, but in 2001 it transferred its responsibility for claims to ACE, which the Connecticut Appellate Court opinion described as a “corporation involved in the business of financial derivatives.”
ACE engaged Berkley Administrators of Connecticut Inc. to administer state claims including the one filed by D’Amico, court records state. Then in 2003, Berkley said it no longer would pay for D’Amico’s psychiatric medication and treatment “because it was considered palliative and no longer necessary.”
In 2005, D’Amico sued ACE and Berkley, alleging breach of contract and breach of the implied covenant of good faith and fair dealing. A trial court in 2008 granted the defendants summary judgment based on the workers’ comp exclusive remedy doctrine.
The correctional officer appealed, arguing that ACE is an “independent third party” and not an insurer, so the exclusive remedy doctrine does not apply. But the state appellate court disagreed.
It upheld the lower court’s dismissal of the suit and said the exclusive remedy provision bars D’Amico’s action, even if ACE is an independent third party as D’Amico asserted.
Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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Study Wall Street Compensation Took a Nose Dive in 2009
New York City job losses in the recession were far fewer than economists’ dire predictions, and Wall Street profits last year soared to record levels on the back of near-zero interest rates and federal bailouts.
But by one measure—securities industry wages and salaries—2009 was the darkest year in modern history, including the Great Depression, according to an analysis of new federal data by the city’s Independent Budget Office.
Real average annual wages in the city’s securities industry plummeted 21.5 percent from 2008 to $311,279 in 2009, a blog posting Tuesday, June 8, by IBO Senior Economist David Belkin shows. Over a span of two years, the wages fell 24.6 percent.
The steep decline was primarily caused by the security industry’s “crack-up in 2008,” Belkin wrote. Firms posted record losses, revenues were down by half and the year-end bonus pool—which gets recorded in the first quarter of 2009—shrunk by nearly 40 percent.
Also, Wall Street revenues did not keep up with surging profits, Belkin wrote, leading to continued shedding of jobs throughout 2009. The city’s securities industry lost 18,400 jobs in 2009, dragging salaries down for those who remained, with non-bonus baseline wages declining by 7.4 percent in 2009.
By comparison, securities industry wages dropped by 10.1 percent in the post-September 11 recession. And before that, there were only three occasions since 1929 when they fell by at least 10 percent in a year. The highest previous decline was in 1947, when trading controls may have contributed to an 18 percent drop in securities industry wages, Belkin writes.
Aggregate Wall Street wages—which reflect the combined effect of layoffs and wage declines—also declined in an unprecedented fashion, by 29.4 percent, or an estimated $21.4 billion.
Despite the record decline and Wall Street’s general volatility, wages grew in the securities industry between 1990 and 2009 by 5.4 percent. By contrast, wage growth outside the city’s finance industry was only 1.6 percent over the same period. Belkin writes that this difference shows “the challenge New York City could face adjusting to a securities industry that is unable to return to the kind of breakneck earnings growth it exhibited during the last 20 years—spectacular crashes and all.”
Filed by Daniel Massey of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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