When an employee is off work due to an on-the-job injury or illness, employers have a few strategies they can use to manage the claim. Each option has advantages and disadvantages for the worker and the employer.
If the medical provider has released the worker to modified duty, the best option is to help your employee return to light-duty work.
- The employer-employee relationship is maintained while the worker recovers from the injury.
- The employer retains the skills of an experienced employee.
- The worker stays active and recovers more quickly.
- The employer may avoid an increase in future premiums.
- The employer may retain their Claim-Free Discount.
- The employer can be reimbursed for light-duty wages and expenses through the Stay at Work Program.
- The claim may close sooner.
- Light-duty work is not always available as an option. The worker must be released to modified duty by the attending provider.
- The employer may believe they don’t have any light-duty jobs to offer, and miss out on the benefits of helping their employee return to work.
Contact the claim manager if you need help creating a light-duty job within your employee’s medical restrictions.
Washington employers have the option to continue paying an injured worker the full amount of wages and benefits while they are off work. This is referred to as Kept on Salary (KOS). When an employer chooses KOS, L&I doesn’t pay the worker time-loss wages (RCW 51.32.090).
- KOS can help employers avoid an increase in their future workers’ compensation premiums.
- The worker receives their full wages and stays connected to the employer.
- The employer can maintain or work towards a Claim-Free Discount.
- KOS can have a positive impact on refunds to employers in a Retrospective Rating program.
- KOS will not always benefit the employer (see below).
- If continued for an extended period, the cost of paying KOS may exceed the employer’s future premium savings.
- KOS may be a disincentive for the employee to return to work.
- KOS may be a financial strain on the employer.
Request a free consultation with an L&I risk management specialist to help you determine if KOS is a strategy that will benefit your business.
In order for payments to qualify as KOS, the employer must continue to pay the worker’s wages and benefits from all employment on the date of injury including:
- Wages or salary
- Compensation for patterns of overtime, shift differentials, etc.
- Contributions to health care benefits
- Board, housing, fuel (if provided as a part of their employment)
- Tips and bonuses
Important: Anything less than 100% of wages and benefits from all employment at the time of injury doesn’t qualify as KOS, and L&I must pay the worker time-loss.
The employer must pay the worker on regularly established paydays, at least monthly. Holiday pay, vacation pay, sick leave, etc. can’t be considered as KOS payments.
When is KOS an option?
Employers can choose to pay KOS when an injured employee is eligible for time-loss compensation or loss of earning power (LEP). If time-loss was already paid, they may be able to retroactively pay KOS if the loss payment orders are not yet final. Contact your claim manager to protest or appeal a claim decision before it becomes final.
Is KOS right for me?
For any of the following situations, you will need to assess whether KOS will benefit your business. If you are in a Retrospective Rating Group, contact your representative for clarification on their KOS guidelines.
- Long-term: KOS can be effective in avoiding time-loss for short periods. For extended periods, the amount paid for the worker’s wages may end up being more than your future premium savings depending on the size of the business and your industry.
- Likelihood of PPD: If the worker receives a permanent partial disability (PPD) payment when the claim is closed, the employer’s experience factor and Claim-Free Discount will be impacted regardless of KOS.
- Additional employers: If the worker had more than one paying job at the time of injury or illness, they may be entitled to loss of earning power (LEP) compensation, even if you pay KOS for the job-of-injury.
- Other time-loss claims: Paying KOS on a single claim won’t avoid an increase in future premiums if time-loss benefits were paid on other claims (current or future) during the same experience rating period.
L&I pays time-loss compensation to partially and temporarily replace the injured worker’s wages when they are unable to return to the job after a work-related injury or illness.
- The worker receives partial wage replacement.
- No action is required from the employer.
- The injured employee is not working.
- The worker receives only a portion (60-75%) of their regular wages.
- A time-loss claim will increase the employer’s future experience factor and workers’ compensation premiums.
- The longer an injured employee is away from work, the harder it is to return.
Contact your Retro group for clarification on their KOS and light duty guidelines.
A single time-loss claim can cause your business to lose its Claim-Free Discount. Contact your account manager to determine if KOS could help you maintain the discount.
If so, the best option is to help your employee return to light-duty work. Contact the claim manager if you need assistance creating a light-duty job within the worker’s restrictions. Contact the Stay at Work Program to learn more about light-duty reimbursements.
Find your claim manager by calling 1-800-LISTENS (800-547-8367).
KOS may not be cost effective to your business if the worker will receive a permanent partial disability (PPD) award when the claim is closed. Contact the claim manager for help estimating the likelihood of a PPD for the claim.
Paying KOS on a single claim won’t avoid an increase in future premiums if time-loss benefits were paid on other claims (current or future) during the same experience rating period. Request a free consultation with an L&I risk management specialist to review your claim history and discuss strategies for controlling costs.
If the worker had more than one paying job at the time of injury, they may be entitled to loss of earning power (LEP) compensation, even if you pay KOS for the job-of-injury. Contact the claim manager to determine if KOS will benefit your business.
Light-duty reimbursements: StayAtWork@Lni.wa.gov.
Claims: 1-800-LISTENS (800-547-8367)
Employer Helpline: 360-902-4817