Wage inflation’s impact on workers’ comp

November 4, 2022

Workers comp affected by an influx of new workers

  • As businesses emerged from the COVID-19 pandemic, a labor shortage occurred, according to a new report by the NCCI called “Why Wage Inflation Matters in Workers Compensation.”
  • To lure workers back into the workforce, wages were increased and this impacted the workers’ compensation system because of more employees.
  • The report found that high-wage earners have a relatively lower share of injuries than low-wage earners
  • Wages grew fastest in recent years for low-paying jobs, and the growth was particularly strong in 2021

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A second conviction for lack of workers’ comp
  • Leroy Nelson, the owner of J.R.N. Construction in New York, was recently sentenced by a judge to a three-year conditional discharge.
  • He was ordered to repay New York State $9,000 in restitution following his plea of guilty to the charge of Attempted Failure to Secure Compensation, a Class E felony.
  • This is Nelson’s second conviction for failing to secure lawfully required workers’ compensation insurance for his employees.
  • J.R.N. had a workers’ compensation policy with the NYS Insurance Fund, but it was canceled for non-payment of the premiums.

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Philadelphia contractor faces penalties

  • A Philadelphia framing contractor faces $269,594 in proposed penalties after the company was found exposing employees to deadly fall hazards at a residential worksite in the city’s Roxborough section.
  • OSHA inspected Max Contractors Inc. in response to a report that the company was exposing workers to fall hazards while conducting framing work in a residential structure on Carson Street.
  • Inspectors observed workers on the building’s second and third levels working near floor holes and the edge of the building without fall protection, exposing them to falls up to 22 feet.
  • OSHA cited the company for three serious and six repeat violations for not providing fall protection and protective eyewear.
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High costs for COVID workers’ comp
  • The average long COVID workers’ compensation claim was $216,000, research finds, according to the NCCI.
  • The costs for non-hospitalized long COVID patients can be nearly as high as hospitalized patients with traditional COVID.
  • The NCCI’s new analysis pulled data from a total of 7,651 claims through the NCCI’s indemnity data call and medical data call.
  • Of hospitalized patients in the study, 47% of them were affected by long COVID, versus just 20 percent of non-hospitalized patients.