Workers Compensation Risk Shift as Jobs Return

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A modest rebound in post-recession hiring has experts keeping an eye on work-related injuries associated with new employees as well as those returning from extended unemployment.

Though workers who change employers typically are at higher risk for injury, sources say rehired employees also can pose safety concerns when returning to their former employers after months or even years off the job.

“Those employees who are coming back are at just as high a risk for injury as those people who are brand new and trying to learn,” said Mark Noonan, managing principal at Integro Insurance Brokers Ltd. in Boston.

The national unemployment rate was 8.3% in January, according to the U.S. Bureau of Labor Statistics, the lowest jobless rate since February 2009. The number of job openings increased somewhat in 2011 after two years of declines (see chart).

That modest job growth appears to be contributing to a recent uptick in work-related injuries. The frequency of workers compensation claims increased 3% in 2010, according Boca Raton, Fla.-based NCCI Holdings Inc.

The ratings and research organization said the increase—the first since 1997—likely was due in part to the “firming job market and (a) modest increase in employment since the start of the recovery in the middle of 2009.”

Texas Mutual Insurance Co. has seen employer payrolls increase and workers comp claims rise during the past six months, a spokesman said.

Much of the growth for the Austin, Texas-based insurer of last resort is coming from the oil and gas industry, which is “booming” right now and hiring new and laid-off workers, he said.

“Here in Texas, there's no doubt in our mind that the economy is rebounding,” he said.

NCCI Chief Economist Harry Shuford said workers are at greatest risk of injury during their first year with a company, regardless of whether they change positions within that firm. The risk level drops once an employee has been with a company for five years.

Employees who are learning to perform new jobs correctly pose much of the injury risk, Mr. Shuford said.

So far, it's difficult to determine whether the injury clock resets for workers who leave and then return to a company. However, Mr. Shuford said, he believes that rehired workers could pose more safety concerns than those who continued on the job.

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