COVID-19 and Workers' Compensation in 2022: The Great Resignation and Closing the Talent Gap

We continue our look at how the COVID-19 pandemic continues to impact workers’ compensation. Our first entry in this series provided an update on the legislative landscape of workers’ compensation across the country. 

Later this year, we will cover: 

• Shifting care utilization trends and how they impact workers’ compensation claims 
• The impact on claims resolution timelines due to fraud claims and the backlog stemming from court closures 

Now, we shift our focus to the Great Resignation’s effect on workers’ compensation claims and how the talent gap is affecting insurers’ ability to resolve claims quickly and completely. 

The Great Resignation’s Effects on Workers’ Compensation 

In the first five months of 2022, about 20 million Americans have quit their jobs, reports Bloomberg. Organizational psychologists predict that the Great Resignation will come to an end in the coming months, but workers’ compensation claims will be affected by three key factors that result in an increased incidence of injury: 

• Larger numbers of untrained and lesser tenured employees 

• Frontline workers engaging in overtime to cover labor shortages 
• Pressure to return injured employees to work at an accelerated pace 

It takes time for new employees to be trained to conduct their jobs safely, and the influx of fresh labor can increase the risk of workplace injuries as new employees are trained. Managing the risk associated with so many new employees can be challenging, but ensuring employers have appropriate training processes and programs available can reduce injuries and workers’ compensation claims. 

The jobs most affected by the Great Resignation have been hourly employees and frontline workers, leading to businesses asking their remaining employees to work overtime. Excessive overtime can lead to increased incidence of injury alongside other negatives like burnout, poor health, and turnover. Employers need to ensure they have strategies in place to prevent overexertion during these periods, providing ample rest periods for affected workers before injury occurs. 

Finally, pressures of the labor shortage can lead some employers to ask workers to return to their jobsite before they are ready, potentially leading to reinjury or additional incidents. Business leaders need to look at their return-to-work plans and create opportunities for transitional duty that can aid employee recovery. 

New Challenges in Working from Home 

The Great Resignation has led to many employers offering greater flexibility to their workers, including additional opportunities to work from home. This increase in remote work has presented new challenges to workers’ compensation through claims due to incidents in home offices. 

These cases do not usually offer a straightforward resolution through established case law and may require resolution through legal channels. Court rulings will help the industry better define when an injury is compensable for a work-from-home employee, as in the case of a woman who tripped over her dog while working from home.  

In that case, the Florida court found that the issue comes down to whether “the employment necessarily expose[d] claimant to conditions that would substantially contribute to the risk of injury and to which the claimant would not normally be exposed during [the claimant’s] non-employment life.” That is, the risk of tripping over the claimant’s dog would exist whether the claimant was at home working or at home not working. 

Whether an injury that occurs while working remotely is compensable is still relatively new ground, and it will be important to continue following as new case law is established in these cases to build a framework to assess outstanding claims. 

Bridging the Talent Gap for Insurers 

Insurers and payers have not been immune to the effects of the Great Resignation, and that has led to another set of complications. New claims adjusters are less proficient than the employees who departed the company, leading to delays in claims resolution. To account for these delays, more time will be required alongside additional guidance from senior staff. Many workers’ compensation payers will turn to technology and automation to boost staff efficiency. 

By Adam Wesson

Courtesy of Verisk

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