Layoffs, Post Terminations, Unemployment and Cumulative Trauma and Repetitive Injury Claims

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Workers’ Compensation Insurance Rating Bureau released a report last week detailing the historic impacts of recent economic downturns on California’s workers’ compensation system. Workers’ Compensation Insurance companies are using this pandemic as an opportunity to attack cumulative trauma and repetitive injury claims.

Fontana post-termination cumulative trauma and repetitive injury claims fired laid off unemploymentThe report notes that while overall claim frequency has decreased more in years of economic recession than in years of economic expansion, the rate of cumulative trauma and repetitive injury claims has increased during economic downturns. In an analysis of the number of claims dating back to 2012, the WCIRB found that about 25 post-termination CT claims were filed for every 1,000 jobs lost. The report then uses these numbers to estimate the number of CT claims that may be filed over the next year in correlation with the job losses incurred as a result of the COVID-19 pandemic.

“If only 50 percent of the rate of post-termination claims is applied to the 4.3 million Californians who have lost jobs since the start of the COVID-19 pandemic, about 54,000 post-termination claims could be filed over the next year, increasing statewide indemnity claim frequency by approximately 25 percent,” the report states in its executive summary. However, when examining the correlation of unemployment rates to cumulative trauma claims, there is no basis for this new WCIRB doomsday scenario.

In 2018, California had an unemployment rate of 4.4 percent and 54,000 cumulative trauma injury claims. In 2011, California had an unemployment rate of 12.1 percent and 54,000 cumulative trauma injury claims. Three times as much unemployment and the same number of cumulative trauma claims. So, assuming California will see an average unemployment rate of 20 percent this year, if an 8 percent difference in unemployment from 2011 to 2018 didn’t change the number of cumulative trauma injuries, why is the WCIRB speculating that an 8 percent difference between 2011 and 2020 will cause a dramatic jump? Looks like they’re at it again with the alarmist numbers, much like they did with their recent COVID-19 presumption estimates, trying to weaken the workers’ compensation system just when workers need it most