The Ins and Outs of Workers Compensation Background Searches

I was just reading an article in the Los Angeles Times where the California State Workers Compensation Insurance Fund is planning to lay off 1,800 employees or thirty percent of its workforce. Tom Rowe, Chief of Staff of the State Compensation Insurance Fund says they are severely overstaffed.  This is the fund that is the insurer of the last resort for California Employers.

According to the article, Rowe was quoted as….

“The positions being eliminated are in areas where business processes have changed significantly enough that work has been substantially reduced,” Rowe said in a companywide email. “We spend more operating the company than we do on benefits to injured employees.”

The layoffs are expected to save State Fund about $350 million a year.”

For sometime the California Workers Comp issue has been a work in progress.  At one time Workers Comp insurance was prohibitively expensive in California.  If it wasn’t killing businesses then it was certainly causing some to consider moving to other states where the insurance premiums were costing a lot less, annually.   But eight years ago, the State of California revised its Workers Comp policies.  Among other things, the State instituted what amount to an HMO where state supported medical care facilities determined the veracity of a workers comp claim and the extent of damage.

Until then, there were many questionable  or outright bogus workers comp claims.  The allegedly injured employees would go to attorneys of questionable discrimination and file claims for extensive injuries that required much compensation and lengthy periods for recuperation.   As the former head of marketing for an investigative group at the time who specialized in workers comp claims, we saw enough sub rosa video where the poor, injured worker who could not lift their arms above their heads were discreetly photographed lifting and moving sofas, playing tennis, uprooting trees from their yards.  Or  secretly working other jobs while they collected money on their workers comp claims.

The California reform reduced workers comp insurance by at least twenty-five percent or more and made it tougher on the suspect employees to prove their cases.  Of course, some attorneys and action groups protested that seriously and honestly injured workers were not collecting the fair share of what they should be compensated for injuries on the job.  In some cases, there was a degree of validity.  In other cases, well…I’m sure you know the story.

When you are conducting background searches as part of your employment screening program, you should be aware that workers comp background searches are not to be used as a pre-employment screening instrument.  You, as  a recruiter or as an employer, may want to determine if your job applicant is prone to filing workers comp claims, if they are prone to actual injury, or as in many cases prone to claiming injury.   But, again, you cannot use workers comp background checks for employment screening purposes.  You must first offer your candidate the position and only then can you conduct a workers compensation search.

But be aware.  With some states it is relatively easy to gain access to an employee’s workers compensation history.   But in other states they can put you through hoops where it may not be worth your while.  In some states, your applicant’s release form is enough to get the ball rolling and the workers comp records will return anywhere from a couple of days to a week.  But…the big but…in other states, you have have to file a special notarized form, or you might have to snail mail your request.  The results are then snail mailed back.  Eventually.  Or, in some states you may not have access at all to your employee’s workers compensation records.

As I more than hinted before…is there much cheating regarding candidate’s and possibly bogus workers compensation claims.  As head of marketing for an investigative group, I once did a brief statistical review of when most claims were filed.  It was skewed so that a great many more workers comp claims were filed in the spring and summer months when the weather was nicer.   I guess you can take it from there.