Budget Savings Initiative #1
Employee Safety and Worker’s Compensation Benefits

The Goal:

Emphasize a safe work place to reduce preventable accidents
Reduce Workers Compensation and accident costs as a part of the Town’s budget

Develop and implement a safety program designed to reduce preventable accidents through training, appropriate provision of and use of protective equipment, defined work procedures, enhanced light duty opportunities, and established safety expectations of supervisors.
Effective July 1, 2009, return the Town’s current worker’s compensation (accident leave) policy to conform to state statutes.

Declared safety violations a serious incident to be reported immediately to the Town Manager for determination of how to address those violations
Employed an experienced Safety Officer in the Human Resource Development Department to supervise a Town-wide safety program for all employees and empowered that officer to order Town operations to cease if safety violations are discovered
Included safety performance of departments as a component of senior manager performance evaluations

Continue to monitor and improve our employee safety program to reduce preventable accidents. Establish standards by which we evaluate our safety efforts
Hold employees, supervisors and managers accountable for unsafe actions
Recommend that Council amend the Code of Ordinances to delete Section 14-64, which provides for a “town-paid workers’ compensation salary supplement.” If enacted, amend all related policies and procedures to reflect the change

The waiting period before receipt of workers’ compensation benefits will be 7 days instead of 3 days. Employees will be able to use accrued leave during this period to maintain their pay.
Benefits payments will be 66.7% of regular salary with no state and federal deductions up to the maximum payment of $816 per week, instead of 100% of regular pay with state and federal deductions as provided under the current ordinance. The 66.7% is not subject to state or federal taxation which, in most cases, significantly reduces the gap between the current benefit and the statutory benefit. Employees will also have the option of using accumulated leave to make up the difference between the statutory benefit and their regular pay. In the examples below, the use of leave to make up the difference is less than one day of leave per biweekly period

Annual Salary	Biweekly Gross	State & Fed Deductions	Current Sal Cont Net	Statutory* Sal Cont Net	Difference from sick leave
$23,000	$884.62	$286.93	$652.41	$589.75	$62.66
$35,000	$1,346.15	$445.39	$955.48	$897.43	$58.05
$50,000	$1,923.08	$643.44	$1,334.36	$1,282.05	$52.31

Changing the Town’s worker’s compensation benefits to conform to statutory requirements will save an estimated $30,000 per year in direct costs. Reduction in lost work days through an enhanced safety program that helps prevent accidents and return employees to work sooner with a revised return to work program and improved rehabilitation efforts will provide indirect benefits that could far exceed the monetary value of the direct savings.
Reduction of preventable accidents will also reduce the amount we spend to repair damaged vehicles and equipment, making these finds available for other uses.
Workers’ compensation claims account for approximately two-thirds of the insurance premiums paid each year by the Town (approximately. $1.1 million for FY09). According to a risk management audit conducted by McNeary Consulting in FY2007, the Town pays between 60 and 100% more for worker’s compensation coverage than comparable North Carolina towns. We can reduce this premium with an aggressive safety program and change in workers compensations benefits as proposed. Funds we do not use for premium payments can be used to benefit employees.