A recent report analyzing job statistics in June registered a small drop in overall wages and salaries, which came about partly through employees working fewer hours. This new round of wage rollbacks has raised concern that the economy has further destabilized, and could even be headed toward deflation.

The most frequent occurrence of pay cuts can be found within state and local governments; these institutions are struggling under enormous budget pressures and have often already attempted to relieve their financial woes through furloughs (cutting worker pay in exchange for days off). Faculty at many public Universities have agreed to pay cuts up to 8 percent, and states like New York are pursuing a wage rollback of 4 percent for the majority of state employees. Similar pay cuts can be seen among state troopers, teachers and public health workers.

Greenhouse cites a 2010 survey conducted by the National League of Cities, which reports that “51 percent of [cities] said they had either cut or frozen salaries of city employees, 22 percent said they had revised union contracts to reduce some pay and benefits, and 19 percent said they had instituted furloughs.

Some businesses are also cutting workers’ pay, often to help stay afloat or to eliminate their losses, although a few have seized on the slack labor market and workers’ weak bargaining power to cut pay and thereby increase their profits and competitiveness.”  Also troubling is the recent report by the Bureau of Labor Statistics showing that wages in the US have remained flat for 18 months now.

One significant factor behind this trend is that rapidly rising pension and health costs have been causing benefit costs to grow more quickly than wages.  Many employers report that reducing wages is simpler than other methods of trimming labor costs. However, some employees claim that these cuts are not fair within a context where corporate profits and worker productivity have risen significantly.

Not uncommonly, unions and their members agree to pay cuts in hopes of recouping some wage growth when conditions eventually improve. In one company profiled in Green’s report, “460 unionized workers accepted an 8.5 percent wage cut in May to help keep their paper mill in business. As an analyst explained, ‘Workers, of course, do not like to have their pay cut, but I think that workers’ major concern now is, Do I have a job? … If the unemployment rate were lower, we’d see a lot more resentment toward pay cuts.”

Yet workers often resist these measures as well, especially in cases where their employers don’t seem to be in much economic distress.

This is exactly what lies behind the ongoing strike at Mott’s Apple Juice facility in Williamson, New York.  The strikers, involving 300 unionized workers, walked off the job back on May 23; they are protesting management’s demands for a wage reduction of $1.50-an-hour, a cut in company 401(k) contributions, and higher levels of employee contribution to health insurance costs.  These demands are particularly offensive to workers because the plant has remained profitable throughout the recession, and because Mott’s parent company, Dr Pepper/Snapple Group, reported record profits last year. As company worker Michele Morgan explained, “They keep piling more and more work on us, but they want to pay us less and less… It’s a slap in the face.” Mott’s company spokesman Chris Barnes countered this charge by claiming that workers were overpaid, and made significantly more than the average wage of $14 an hour for area food-manufacturing employees.  The union has directly challenged those figures.

“Our only objective,” Mr. Barnes said, “was to continue to enhance the competitiveness and flexibility of our operations.”

The default rate among self-insured group trusts has produced an alarming level of assessments on small businesses throughout the country. Workers’ compensation boards in states like New York are increasingly deliberating “safety programs” that would lower workers’ compensation costs.

Certain critics—notably the insurance industry itself—have long argued that the injury benefits awarded by state workers’ compensation boards are overinflated, and do not accurately reflect the true costs of a given injury.

While cases of fraud and “presumptions” are significant factors, many claim that the inability of workers’ compensation boards to objectively assess and quantify disability is a much greater problem. For years, many WCBs have not had a working definition of levels of disability or percentage-based schedules of loss. These boards have used arbitrary and every-changing criteria to calculate hundreds of millions of dollars’ worth of permanent damages benefits. On top of this there have been the massive cost of trials and testimonies to calculate what WCBs claimed had no definition in the first place.

At the present moment, workers’ compensation boards across the nation are once again involved in debates over the creation and use of more standardized, objective guidelines to evaluate disability. Yet for generations, the workers compensation system has carried on profitably by not having such standards. In short, disputes have been resolved by an arrangement in which worker’s compensation attorneys and insurers must engage in expensive and inefficient disputes until both sides are worn down and settle for a number around 50%, giving the misleading impression of a fair and reasonable outcome.

According to Seattle Workers’ Compensation Attorney Theodore Ronca, this state of affairs has come about through the unique history of workers comp boards.  In New York State, for example, the board has employed a medical advisor since its very first days. The initial advisors established guidelines that were widely accepted and implemented, until they eventually came to be considered obsolete in the 1950s.  After that point, the New York State workers’ compensation board had no working guidelines, and attempts to create new criteria came to a state of deadlock through stubborn opposition on all sides.

The New York Workers’ Compensation Board continued to operate (unofficially) with the older guidelines, and then later with no criteria at all for the next forty years. Responding to pressure in the 1990s, it produced new written guideline for workers’ compensation benefits, but failed to make these binding.  In practice, they were generally ignored when negotiating workers’ compensation claims.

This, of course, raises the question as to whether guidelines would automatically solve anything. As Ronca points out, “unless the guideline can be tested to determine if it can measure what it purports to measure it remains a blank yardstick masquerading as a set of calipers.”  Calculations of workers’ compensation disability, ultimately, result in the final settlements of injury claims, some that currently stand above $200,000 (and rising).  Whether these numbers are too high or too low is a question for which many workers’ compensation boards still have no satisfactory answer.

KobeWieland, LLC produces copper tubing and employs over 500 employees in its two plants in Pine Hall, North Carolina and Wheeling, Illinois.  The manufacturing company hired Cardwell as a caster on September 24, 2008; yet when the new employee arrived for his first day of work, one of its Human Resource Specialists noticed that Cardwell did not have all ten fingers, and the company immediately rescinded its offer of employment.  The HR Specialist claimed that he felt the missing fingers would prevent Cardwell from effectively performing the job.

According to the EEOC complaint, Cardwell clarified that he could still do the job for which he was hired, and asked for the opportunity to demonstrate his ability.  However, the supervisors did not allow him to do so.

The EEOC maintains that Cardwell is fully qualified to perform the duties required by this position, but was denied employment because KobeWieland believes him to be disabled on account of the missing fingers.  Such an assumption of disability would constitute a violation of the Americans with Disabilities Act (ADA).

Initially, the EEOC attempted to reach a voluntary settlement with KobeWieland; after these attempts failed, the EEOC decided to file a suit with the U.S. District Court for the Middle District of North Carolina, seeking back-pay, punitive damages, compensatory damages and rightful-place hiring for Cardwell.  The suit also seeks injunctive and other non-monetary relief.

An EEOC press release included the following remarks from Lynette Barnes, one of the regional attorneys representing Cardwell:

“It’s unfortunate that twenty years after the enactment of the American with Disabilities Act, some employers still react to applicants and employees based on myths, fears and stereotypes about a certain impairment that the individual may have … In this lawsuit, the EEOC alleges that rather than allowing the worker the opportunity to show that he could do the job, the company simply revoked the job offer because of his missing fingers.”

See further details, updates, and press releases on this case at the EEOC press release center.

The case arose out of a medical fee dispute between the employee and his workers’ compensation insurance carrier.  Immediately following the incident, the worker notified his employer of the accident and received medical attention; at this point, the post-exposure protocol required by OSHA was performed.  The process called for five office visits, including laboratory tests for blood-borne pathogens.  The total cost of medical services amounted to $700.  The employee’s workers’ compensation insurance carrier agreed to pay for the first two visits and a portion of the third, but then refused further compensation.  According to the insurance company, while an exposure to bodily fluids “may have potentially harmful effects,” it does not officially constitute an injury unless and until objective medical findings prove that the exposure has caused a harmful change in the human organism.  The insurer wrote that the insurance policy had paid for one initial test and a follow-up primarily “as a matter of custom and practice and a courtesy to its members.”

According to the official opinion of the Supreme Court of Kentucky, “At issue is whether a healthcare worker who was splattered in the face and eye with blood sustained a compensable injury and, as a consequence, whether the employer or the insurance carrier bears liability for the expense of OSHA-required prophylactic testing.  Affirming a decision by the Workers’ Compensation Board, the Court of Appeals determined that the worker sustained a compensable injury and, thus, that the carrier was liable.”  In other words, the court determined that being spattered in the face and/or eyes with foreign blood, or with any other potentially infectious bodily fluids, does indeed constitute a traumatic event for the purposes of KRS 342.0011(1); meanwhile, the presence of another person’s blood in the worker’s eyes counts as exposure as defined in 29 CFR 1910.1030(b), which defines a “harmful change” in an individual as—among other things—the introduction of foreign blood or potentially infectious substances into the worker’s body.

I-1082 would allow private insurers to offer workers’ compensation coverage in competition with the current public system, giving yet another lucrative handout to the taxpayer-bailed-out insurance industry.  After receiving billions of taxpayer dollars over the past few years, firms like AIG (the world’s largest workers’ compensation insurer) are now attempting to undermine Washington’s non-profit public system — a system that “is statutorily required to keep costs down,” says Nicholas Corning, former President of the Washington State Association for Justice. If the private insurance industry is successful, I-1082 will leave Washington businesses “to deal with out-of-state corporations [who are] only concerned about siphoning profits into their Wall Street war chests.”  And state employers can expect a costly outcome from this transfer; as Corning points out, the existing state-run workers’ compensation program, L&I, operates with only 18% administrative costs; the private industry average, on the other hand, is 68%.

Opposition to I-1082

Small business owners and community leaders feel that privatization would prove highly unfavorable to businesses, employees and taxpayers, and have organized opposition groups to I-1082.  The campaign No on I-1082 maintains that the highest priority of our existing public system is to ensure that injured workers receive the medical care and job retraining they need.  For-profit insurers are not likely to share this priority.  According to the opposition group’s communications director, Adrianne Williams, “Handing our public, non-profit system over to the private insurance industry is mostly [designed] to generate profits for the industry and less about getting injured workers back to work.”  Other prominent groups opposing I-1082 include the Washington State Labor Council AFL-CIO, the Washington State Association for Justice, and Democratic Underground,

Many Washington businesses are also concerned about the higher insurance premiums they can expect if 1082 passes.  Alex Fryer, the spokesman of “No on I-1082,” argues that private insurance companies will end up “cherry-picking businesses that have low claims, forcing the remaining higher-risk businesses to pay higher premiums under the state plan.”  To underscore the consequences of moving away from a non-profit workers’ compensation plan, he cites figures on states that have adopted a private insurance option, some of which experienced a 200 percent premium increase.

In addition, I-1082 proposes to abolish the existing state mandate requiring employees to pay a portion of the state’s premium costs, shifting the entire financial burden to employers.  Analysts predict that this would cause small business owners’ annual costs to go up by 25 percent.

I-1082 would have an unfavorable outcome for workers as well, eliminating any transparency from the claims management process.  Under the present Washington State workers’ compensation system, L&I is required to come to a final decision regarding treatment of a worker’s injury or illness, and must notify all parties of that decision.  If L&I does not comply with these obligations, it can be compelled to do so by a writ of mandamus.  But I-1082 includes a provision stating that insurers do not have to notify anyone if a claim is rejected; in fact, the workers’ compensation insurer would never have to come to a decision on an injury claim at all.  This puts the insurance companies at a tremendous advantage, allowing them to protect their profit margins by denying or delaying claims indefinitely, without ever facing the threat of enforcement.  Not only would this potentially prevent workers from returning to their jobs; it would also make it extremely difficult for employers to verify whether an employee is able to work.

Critics of the initiative are also alarmed that I-1082 would leave the insurance industry unregulated and free of L&I oversight.  Private insurers would be allowed to set their own rates with no approval from the Washington State Insurance Commissioner. Equally troubling is the fact that I-1082 would abolish the Insurance Guaranty Act, leaving Washington businesses and employees vulnerable to insurer insolvency.  Currently, all lines of private insurance in the state are protected against fraud or bankruptcy by the Insurance Guaranty Act.  But with that regulation removed, an insurance company could collect workers’ compensation premiums and then fail to pay benefits due to insolvency.  Because of these reasons, Washington Insurance Commissioner Mike Kreidler and State Auditor Brian Sonntag both oppose I-1082.

Ultimately, I-1082 would establish an unregulated and largely independent playing field for private insurers to reap profits by squeezing Washington businesses and undermining worker safety.  Before voters cast their ballots in November, they should be aware that I-1082’s success would be a huge win for special interests, and a loss for the wellbeing of small businesses and injured workers.

Read more about I-1082:

• The Stranger, “Building a Better Cash Cow”
• Teamsters Oppose I-1082
• Vote No On 1082

While analysts continue to debate whether or not the U.S. economy is on the road to recovery, the recession clearly lingers for those involved in the workers’ compensation system (read reports on the recession published by the National Bureau of Economic Research)

Workers’ compensation claims generally tend to drop during tough economic times, and this pattern is holding true in the current recession. This trend generally arises from psychological factors in the workplace rather than an actual drop in worker injuries.  Employees concerned with job security are more reluctant to report legitimate injuries and seek workers’ compensation, fearing that if they file a claim, management could target them for dismissal in an upcoming round of layoffs.  In their efforts to protect their jobs and be seen by management as a “valuable” part of the workforce, many employees silently endure injuries at work and decline to file workers’ compensation claims.

The psychological impact of our recession is also evident among workers who cannot avoid reporting their claims because of the severity or obviousness of their injuries. Facing the same fears about job security, these employees chose to continue coming into work when they would normally stay home to recover. What would otherwise be a workers’ compensation indemnity claim now becomes a workers’ compensation medical only claim.

The recession’s impact also extends to those who are already out on disability benefits.   Many in this situation fear that staying out of work too long will jeopardize their jobs. These workers often try to convince their doctor that they are able to return to work even when injuries persist.

In addition to these impacts, the recession has also caused employers and workers’ compensation insurers to change business practices in ways that adversely affect workers. Since workers’ compensation premiums are based on a company’s payroll, employers looking to cut costs often lay off workers to reduce their insurance premiums.  Employers use this tactic to their advantage on more than one level: not only do fewer employees translate into lower premiums, but employees that are retained also tend to be more experienced and have fewer accidents and injuries than their less experienced counterparts.  Over time, the experience modification factor improves for a company, producing yet lower workers’ compensation premiums.

With increased layoffs in the current economic climate, fewer premiums are being paid to workers’ compensation insurers.  Insurers, in turn, have compensated for falling revenue by raising the workers’ compensation premiums they charge to employers.  However, this has not yet translated into a full recovery of losses: according to reports in the Insurance Journal, the loss ratio for workers’ compensation insurers has been steadily on the rise throughout 2008 and 2009. The National Council on Compensation Insurance (NCCI) reports that the economic downturn caused net workers’ compensation insurance premiums to drop by 23% from 2007 to 2009.  While there are multiple factors accounting for these losses, downturns in construction and manufacturing have had a significant impact on the bottom line for insurers. Both of these sectors have higher than average workers’ compensation premiums, yet they have been among the hardest hit by the recession.

A steadily growing number of economists are beginning to argue that the recession is coming to a close.  Hopefully the next round of assessments by the National Bureau of Economic Research will yield more consensus that we’ve fully entered a recovery stage. Yet even after it officially ends, the impact of the recession may not quickly dissipate among those involved in the workers’ compensation system.

Learn more about workers’ compensation in Washington State:

Washington Workers’ Compensation Legal Library

Washington State Department of Labor & Industries

Emery Reddy is committed to ensuring that workers receive the full compensation and benefits to which they are entitled under state and federal law.  To follow the developments of this and other overtime and wage violation cases, please check back regularly for updates.

Wage, hour, and benefit violations of this kind are unacceptably common in today’s workplace. Employers violate the law and their workers’ rights when they refuse to pay overtime wages, do not meet a state’s legally established minimum wages, fail to comply with the Equal Pay Act, coerce an employee to work off the clock, refuse to allow workers their mandatory breaks, or withhold commission payments, final wages or any other portion of a worker’s earned wages without that employee’s written consent.  For more information on wage disputes and workers’ rights, visit Emery Reddy’s Employment Law information center or the websites for the Washington State Department of Labor and Industries (L&I) and the US Department of Labor.

A federal district court recently ruled in favor of an employee suing several human resources executives after he was allegedly fired for requesting time off under the Family and Medical Leave Act (FMLA).  The ruling may set a precedent in which individuals can be held personally liable for damages allowed through FMLA, including financial loss from a denial of benefits, compensation for back pay, lost wages and attorney fees.

The suit was brought against Cardone Industries and five of its senior HR executives by Dmitry Narodetsky, a tool designer who worked for the company for nearly twelve years before his termination.  His case includes a three-count complaint for violation of the Family Medical Leave Act, the Consolidated Omnibus Budget Reconciliation Act (COBRA), and the Employee Retirement Income Security Act (ERISA).

Several weeks prior to his termination, Narodetsky was diagnosed with a leg injury requiring surgery.  His wife promptly notified Narodetsky’s managers that her husband would need time off for the upcoming operation, and requested that they provide short-term disability for his medical leave.  Following the conversation, three of the company’s HR executives and another manager conducted a forensic examination of Narodetsky’s work computer, uncovering evidence of a pornographic email he allegedly forwarded to a coworker over a year earlier.  Before scheduling the surgery, Narodetsky was called into a meeting attended by the defendants, shown the email he had allegedly forwarded, and fired.

Narodetsky alleges that his employers conducted the computer search solely to find a pretext for terminating his employment so they could avoid granting him leave. He filed a suit alleging that not only the company, but also the five individual defendants interfered with his rights under FMLA and the Employee Retirement Income Security Act.

Attorneys for the defense argued that none of the individual claims were warranted because Narodetsky’s suit did “little more than simply list each such defendant’s title,” and because it failed to include “any facts showing how each defendant was involved in plaintiff’s alleged request for medical leave or the decision to terminate.”

Yet U.S. District Judge Thomas N. O’Neill of the Eastern District of Pennsylvania refused to dismiss Narodetsky’s claim, noting that it went well beyond the narrow characterization of the defense by alleging that each of the individual defendants “participated in the forensic search of [the plaintiff’s] computer with the goal of finding a reason to justify his termination because he had requested FMLA leave.”  O’Neill also maintained that the executives and manager were properly named as defendants since each possessed the authority to fire and played a role in the decision to terminate Narodetsky. “The allegations support an inference that each of the defendants exercised control over the plaintiff in the decision to terminate him,” O’Neill wrote.  The judge also stated that “Given the timing of his termination–falling right on the heels of his request for medical leave–I find that it is reasonable to infer that the defendants terminated his employment for the purpose of interfering with his plan benefits.”

Both the individual defendants and Cardone Industries, Inc. have declined to comment publicly on the ruling.  The case is now proceeding to adjudication in a new trial. See O’Neill’s full opinion in Narodetsky v. Cardone Industries Inc. (pdf)

Citation: Narodetsky v. Cardone Industries et al., Case #09-4734; February 24, 2010, U.S. District Court, Eastern District of Pennsylvania.

Companies that cut costs by misclassifying regular employees as “independent contractors” will face tighter regulations and stricter penalties in 2010. The Obama administration has already begun to crack down on companies that misrepresent worker status, recently hiring one hundred additional enforcement agents to effect compliance with the law. Meanwhile, auditors at the IRS have launched an intensified campaign to determine if over 6,000 major companies are using misclassification as a way to cheat on taxes.

Business experts have shown that a growing number of companies wrongfully classify regular workers as “independent contractors” to avoid paying unemployment insurance premiums and Social Security and Medicare taxes on the wages of their employees. Since taxes are not generally paid on the compensation of independent contractors, employers reduce business costs by improperly applying this designation to individuals who should be regarded as regular employees (some of these “contractors” even have company office space and work the same hours as employees).

In a recent New York Times article, Steven Greenhouse indicated that companies wrongfully classify about 3.4 million workers as contractors; the Department of Labor largely corroborates these figures, and estimates that up to 30% of U.S. companies participate in worker misclassification at some level.

The practice has enormous economic repercussions. In Ohio, for example, close to 100,000 misclassified workers have cost the state an estimated $35 million a year in unemployment insurance taxes, and over $100 million in worker’s compensation premiums. With federal and state governments currently struggling under record deficits, businesses can expect a significant increase in penalties for misclassification in the near future. Steven Greenhouse reports that the attorney general of California is currently seeking $4.3 million from a single construction company accused of misclassifying its workers. When implemented on a comprehensive, nation-wide scale, these measures could yield significant results. According to the Obama administration’s 2010 budget estimates, tightened enforcement could translate into $7 billion in revenue over 10 years.

Yet wrongful classification of workers is not merely a matter of concern for government officials; the practice has implications on a more personal level as well, denying basic employment rights to workers. Employers often misrepresent regular W-2 employees as contractors to circumvent minimum wage, overtime and antidiscrimination laws. If workers are designated as contractors and then laid off, they are ineligible for unemployment insurance. Those who are injured on the job cannot receive workers’ compensation benefits.

Prominent members of the business community have responded to the impending crackdown with alarm. When the IRS or state tax authorities identify instances of wrongfully misclassifying workers, companies often face fines and penalties, and can be liable for back-taxes on the reclassified employee. Most employers maintain that worker misclassification is unintentional, resulting from confusion and ambiguity in the legal distinctions between independent contractors and regular employees.

While current developments demonstrate a growing political will to enforce compliance with the law, cases of misclassifying workers have repeatedly emerged in the national spotlight in recent years. Last year the attorneys general of several states threatened to sue FedEx Ground for wrongfully classifying its drivers.  According to allegations by the Teamsters, FedEx has used misclassification to prevent drivers from unionizing (since independent contractors, unlike traditional employees, cannot form unions).

Yet perhaps the most prominent case of misclassification surfaced in 2007, when the private security firm Blackwater USA came under investigation for evading payment of millions of dollars in taxes by classifying workers in Iraq as “independent contractors.” Henry Waxman, chairman of the House Committee on Oversight and Government Reform, accused Blackwater of engaging in an “illegal tax scheme” that allowed it to avoid an estimated $31 million in employment-related taxes in the last year of its contract alone. The company also attempted to prevent one of its guards from contacting members of Congress after the worker discovered this illegal practice. In a letter to Blackwater’s CEO, Waxman wrote that “it is deplorable that a company that depends on federal tax dollars for over 90 percent of its business would even contemplate forbidding an employee to report corporate wrongdoing to Congress and federal law enforcement officials.” Despite the fact that it routinely misclassifies workers as contractors, Blackwater has been awarded more than $1 billion in government contracts since 2001.

According to guidelines established by the IRS, an employee is defined as anyone who works for an employer when that employer controls what will be done on the job and how those services will be performed. Independent contractors, on the other hand, are defined in a such as way that the payer or employer can only control the result of the work performed, but not the means of accomplishing that result. This distinction is codified in revenue ruling 87-41 (generally referred to as “the twenty factor test”). For a more extensive discussion on properly classifying employees and contractors, see the official guidelines as detailed on the IRS website.

Of the many concerns that today’s workers face, one of the most troubling is the prospect of losing income during an injury or prolonged illness. Sick or injured workers may suddenly find themselves unable to pay bills, maintain their current standard of living, protect their families from debt, or even keep their homes.

While most Americans carry insurance for possessions like cars and homes, the majority do not carry private disability insurance. At first glance, this makes it easy to see why someone would insure his or her ability to work and earn income—perhaps an individual’s most valuable asset of all.

Yet the issue becomes more difficult when workers try to determine the actual risk of experiencing disability in the course of a working lifetime. Much of the existing data and information is confusing, contradictory, or downright misleading. For example, the National Safety Council estimates that 31 million American workers suffer from a disabling injury each year; but when you look closely at the details, that figure is anything but straightforward. The NSC defines “disability” quite loosely: in a recent interview, NSC spokesperson Amy Williams noted that a disability could be anything that “interferes with normal daily activity one day beyond the day of injury.” She clarified that the condition doesn’t have to be serious enough to prevent an individual from going to work: in fact, it could just mean that someone “twisted their ankle and couldn’t go to Pilates that night.”

Such concessions, however, do not stop insurance companies from playing fast and loose with the statistics, as Ron Lieber argues in his recent article, “The Odds of a Disability are Themselves Odd.” For example, Lieber points out that the Council for Disability Awareness, a consortium of disability insurance companies, draws on the above NSC figures to claim that Americans have an 80% chance of experiencing disability. Framing the discussion in this way invests the prospect of disability with a sense of inevitability—and, consequently, sells insurance policies.

Of course many workers have legitimate reasons for insuring their ability to work and earn an income, even if insurance industry figures are overblown. Yet given the gaps and inconsistencies in available data on an average worker’s odds of experiencing disability, policy-shoppers should be wary. Reputable disability insurance agents may cite more conservative odds—perhaps as low as 50%. But some assessors in major insurance firms like Guardian will admit that those figures themselves are still inflated. During a recent interview, the spokesperson for Guardian’s Berkshire Life unit revealed that her organization’s current information was outdated, and estimated that the odds of disability were probably closer to 30%. Estimates on websites for insurers like Metlife as well as the U.S. Social Security Administration concur with that lower figure.

Yet workers who want to make informed decisions about the actual value and necessity of purchasing disability insurance will need to consider other factors in order to accurately assess their risk. The website for the Council for Disability Awareness provides a “Personal Disability Quotient” tool to estimate the odds for different occupations and lifestyles, but there can be substantial discrepancies in the results when additional outside factors are calculated. White-collar workers have lower rates of injury and illness than their blue-collar counterparts; exaggerated or fraudulent claims skew actuarial data across the board; and in recent years, many professionals facing reduced income and benefits have increasingly turned to using their disability policies as a kind of retirement plan—a trend recently verified by Jack Luff, a researcher with the Society of Actuaries.

Given this ever-shifting constellation of factors, the lifetime disability odds for a given worker could turn out to be in the single-digits—a figure that is hardly suggested by the Council for Disability Awareness, which warns that “Every :01 second another disabling injury occurs. That’s 60 per minute, 85,000+ each day.”

Workers can expect to find more accurate information on the website of the U.S. Bureau of Labor Statistics, which regularly updates its figures on disability rates and coverage. And of course a number of employees already have some disability coverage through their workplace—although the Bureau of Labor Statistics shows that this is only true for about 30% of American workers, and those policies generally cover only a portion of a worker’s income and tend to run out quickly. One should also bear in mind that workers’ compensation and L&I benefits can only be received for injuries that occur on-the-job. Meanwhile, disability benefits through Social Security amount to only a few thousand dollars a month, and the Social Security Administration defines disability very narrowly in evaluating eligibility.

Whatever a worker’s concern, it is clear that one should not solely rely on generalized insurance industry figures and across-the-board warnings. Those who are considering disability coverage face considerable research challenges, but Ron Lieber’s New York Times article has already generated a lively online discussion, and offers a number of additional resources for help. The guidelines in his blog post Questions to Ask Before Buying Disability Insurance may provide workers with an excellent place to start.

For more information, please visit Emery Reddy, PLLC online, or contact us via telephone at (206) 442-9106.

Emery Reddy represents plaintiffs in L&I, employment law and personal injury matters. The firm and its attorneys are trusted advocates for Washington workers who experience job related injuries.