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How Workplace Injuries Are Financially Crippling Small Business Employees

How Workplace Injuries Are Financially Crippling Small Business Employees

A new report from the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has revealed that workplace illness and injury are almost directly linked to income inequality and poverty for workers in the lower and middle classes — a problem that could have profound impacts on small businesses.

According to a March 5 NPR article, changes to workers’ compensation policies throughout the last decade have led to widespread cutbacks in benefits for injured workers, in addition to making it tougher to get these benefits.

As a result, thousands of American families each year find themselves cast out of the middle class and into poverty; it’s “a trap which leaves them less able to save for the future or to make the investments in skills and education that provide the opportunity for advancement,” the OSHA report states.

On average, there were about 5.5 workplace injuries for every 100 full-time workers in 2011, the most recent year with available data. The OSHA study found that injured workers will earn 15% less in the decade following their injury, and that employers only pay 21% of the cost of the injury through workers’ compensation.

The chances that an injured worker will successfully get workers’ compensation benefits are increasingly slim. In California, for example, one third of people who suffered workplace amputations did not receive these benefits. In Massachusetts, the statistic jumps to 50%.

But how do small businesses factor into these findings?

According to a Feb. 20 Small Business Trends article, an astonishing 70% of small business employees reported being unable to handle the large financial burden of becoming ill or injured by a workplace accident. On average, these employees had less than $1,000 saved up to pay for unplanned medical expenses.

At the same time, few small businesses have the means to offer competitive benefits for their employees who become injured in the workplace. A mere 18% of these businesses offer health coverage for their workers, despite the fact that small businesses employ more Americans combined than larger corporate entities.

It’s clear that the draconian worker’s compensation policies that many states employ aren’t adequately protecting workers from the financial devastation of an unexpected injury. Yet even with income inequality on the rise, there’s no sign of change coming anytime soon.

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