HR Management & Compliance

Cutting Workers’ Compensation Expenses: Return-To-Work Program Ends Up Costing Employer $10.6 Million; Do’s and Don’ts For Avoiding Trouble

When employees are off work because of a job injury, it can be to everyone’s benefit to get them back to work quickly. Returning employees to work with an adjusted schedule or a light-duty assignment can save employers money by reducing workers’ comp costs. Employees can earn more money and feel more productive and less isolated from workplace developments. But employees who think they’ve been prematurely rushed back to work can cause problems-as San Francisco-based Levi Strauss & Co. discovered when it was recently hit with a $10.6 million verdict.

Not What Employees Expected

The trouble started when a group of Levi Strauss sewing machine operators who worked in El Paso, Texas, were off work and receiving workers’ comp benefits for repetitive stress injuries. The company brought them back to work under a “re-entry” policy that it said was intended to help return employees to the job and provide them with education and retraining. But the employees charged the program’s real purpose was to get injured workers to quit, thus reducing the company’s soaring workers’ comp expenses.

The employees’ attorney, Lark Fogel, told CEA that Levi Strauss aggressively pursued its policy by directly contacting the workers’ doctors and requesting that the employees be released to come back to work with modified duties or with retraining for other jobs. Fogel said the employees were told to return to work or they would lose their jobs.

When they came back, however, the employees found there was little work for them and no special training as promised, according to Fogel. The em- ployees said they also earned far less than what they made before they were injured. What’s more, they claimed they were harassed by co-workers and supervisors, who made derogatory comments and complained they reduced team productivity.

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Return-To-Work Program Has Expensive Consequences

More than 100 workers sued Levi Strauss for discrimination and retaliation for filing workers’ comp claims. Following a trial involving five of the employees, a jury ordered Levi Strauss to pay $600,000 in compensatory damages plus a whopping $10 million in punitive damages.

The total could go far higher because scores of other employees have cases that are still pending. Levi Strauss says it did nothing wrong and is appealing the verdict.

How To Do It Right

Although return-to-work programs are increasingly popular, the jury’s award shows how serious the problems can be if employees claim you’re too aggressive in returning them to work. And besides involving workers’ compensation laws, bringing employees back from disability leave can raise issues under state and federal disability discrimination laws and family leave laws as well.

Here are some tips on structuring an effective-and legal-return-to-work program:

  • Do adhere to work limitations. If you provide a doctor with a job description for a light-duty position, make sure it accurately reflects what the person will be doing. The Levi Strauss employees complained that on returning they were not given the kind of work they had expected. And if a doctor releases an employee to return to work with restrictions, be sure to comply with them.
  • Do maintain consistency. When an employee comes back to work in a light-duty job, you don’t have to pay them the same amount they received before being injured. But you cannot treat employees who are disabled by work-related injuries differently than other workers with short-term disabilities. Have a written policy regarding temporary light-duty or alternative assignments that covers all employees with a short-term disability-regardless of the cause-and then follow your policy consistently.
  • Do allow family leave. If you have 50 or more employees and a worker is eligible for family leave because of their own serious health condition, you may not deny the leave and force the person to come back to work. But workers’ comp time off for a serious work-related injury can be deducted from the 12 weeks of allowable family leave. Once the 12 weeks are exhausted, mandatory return-to-work programs can kick in. So it’s crucial to keep careful records of the amount of family leave taken each year.

    Also, with a few exceptions, you must return the person to their original job after the family leave is up if they can do the work unaided or with an accommodation.

  • Don’t violate the ADA. If the employee’s injury rises to the level of a disability protected by the Americans with Disabilities Act and the person can perform the job unaided or with an accommodation, you may have an obligation to return them to their old position unless doing so would be an undue hardship on you. 
  • Don’t discourage claims. Review your procedures to make sure you don’t discourage employees from filing legitimate workers’ compensation claims. For example, if you have a safety-incentive program, keep the rewards modest to avoid the contention that instead of making employees safety conscious, you are actually trying to deter workers from reporting accidents and injuries.

For More Information

If you have questions about a return-to-work program that your workers’ comp carrier can’t answer, contact an Information and Assistance Officer at your local California Depart- ment of Industrial Relations, Workers’ Compensation Division office. For the office nearest you, call Division headquarters at (415) 975-0700.