Editor's note: The following article was authored by L.M. Sixel and was originally published in the Houston Chronicle. Reprinted with permission.
Employees and taxpayers foot most of the bill when workers get injured on the job, a new report from the U.S. Occupational Safety and Health Administration finds.
The cost-shifting stems from a combination of factors including an erosion of health and income benefits that no longer cover the cost of recovery, widespread under-reporting of on-the-job injuries and the growing practice of misclassifying employees so they don't qualify for workers compensation insurance, said David Michaels, assistant secretary of labor for occupational safety and health.
"If companies had to pick up the true cost, they'd be making workplaces more safer," said Michaels, an epidemiologist by training who is currently the longest serving assistant secretary in OSHA's history. He is on leave as professor of environmental and occupational health at the George Washington University School of Public Health.
The Labor Department estimates employers pick up only 20 percent of the tab for workplace injuries and illnesses through the workers compensation system, according to a recent report, "Adding Inequality to Injury: The Costs of Failing to Protect Workers on the Job."
More employers are dropping out of the workers compensation system, which was designed as a no-fault system to treat on-the-job injuries. Oklahoma has recently joined Texas to become the only two states in which employers are not required to provide workers compensation coverage, Michaels said.
At the same time, he added, states have scaled back on benefits, making it more difficult for injured workers to cover the cost of their medical care and lost income.
The Labor Department says fewer than 40 percent of eligible workers receive any workers compensation benefits. That's because in some cases the accidents are never officially recorded.
At one poultry plant in Alabama, employees who suffered from repetitive stress injuries had to report to the first-aid office to obtain permission to see the company doctor. Not many were able to get past the gatekeeper, said Michaels, recalling how one worker had to go 94 times before finally getting an appointment.
Some companies believe that if they don't record injuries, they can pretend they're not occurring, he said.
Other times employees keep their injuries quiet, whether they're worried about retaliation or concerned they won't receive the medical treatment they need. Consequently, they end up paying their own deductibles and co-pays through their own health insurance.
Other times insurers reject the claims, contending the accident didn't happen at work or was the result of a pre-existing injury.
Many workers never recover financially from their lost income, with low-wage workers bearing a bigger share of the burden, Michaels said. Workers earn an average of 15 percent less - or $31,000 - in the decade following a workplace injury, data cited by the Labor Department show.
Another problem is the rampant misclassification of employees as independent contractors, which eliminates millions of people from workers compensation insurance coverage.
The practice is especially common in construction, said Michaels, citing research that showed nearly 38 percent of construction workers in Texas are misclassified as independent contractors.
With so many workers misclassified, there's no incentive to provide them with a safe environment. And it's hurting the companies playing by the rules.
"We know high-road employers are furious that low-road employers are getting away with it," Michaels said. OSHA inspectors are now asking about employment status and when they find independent contractors, inspectors make referrals to the department's wage and hour division, he said.
With fewer injured workers receiving workers compensation benefits, more are turning to other sources to subsidize their workplace injuries and illnesses. The spike in the number of workers covering more of their own bills is coming at the same time more workers are collecting Social Security disability insurance.
After extrapolating data from a study in New Mexico, the Labor Department estimates that 7 percent of the new 1 million Social Security disability beneficiaries in 2010 became eligible because of a work-related injury. The addition of those extra work-related recipients boosts the annual cost of the program by $12 billion. If Medicare benefits are also included, the total is nearly twice that.
Vicente Menchaca said he applied for and began receiving the Social Security disability benefits after losing his claim for lifetime income benefits under workers compensation. He said it's cost him in the years since.
Menchaca, who said he developed tendonitis from working as a machinist in Houston, said he receives about $2,000 a month from Social Security disability, which represents about 60 percent of his former monthly wage.
For Texas companies that provide workers compensation, injured employees eligible for lifetime income payments receive 75 percent of their former weekly wage, up to a maximum of $773, according to the Texas Department of Insurance website. Beneficiaries are also entitled to a 3 percent increase each year.
There is no incentive to prevent injuries, Michaels said, when the cost falls upon workers, their families and taxpayers.
