The Affect of Drug and Alcohol User’s

Small- and mid-sized companies are far less likely to test potential hires for drug use. And, perhaps as a result, nearly 9 in 10 illicit drug users and heavy drinkers work for smaller firms, according to recent research.

Illegal drug users pose a double threat to the workplace – in addition to the added safety hazard of having someone who is potentially under the influence on the job, these workers are also a major drain on productivity.

Every year, U.S. firms lose an estimated $100 billion from drug abusers in the workplace, often stemming from safety incidents.

That lost revenue comes from:
-Workers’ comp cases: 38% of all cases involve illegal drug users.
-Healthcare costs: Illegal drug users’ medical costs are 300% higher than non-users.
-Lost productivity: Drug abusers are 1/3 less productive than non-drug users. They’re also 2.5 times more likely to be absent eight or more times a year from work.
-Turnover: It costs firms about $7,000 to replace a salaried worker.

Compensation Insurance

Typical costs:
Regulations and premium costs for workers compensation insurance vary from state to state, but the rates are always calculated at a cost per $100 of an employee's salary based on the risks involved in that type of work. A roofer will be covered at a much higher rate than a retail store clerk or a copy machine operator. In California, an office clerk is covered for roughly $1.25 per $100 of salary. If the clerk earns $575 a week ($29,900 a year), the employer pays workers compensation premiums of $7.19 weekly or $373.75 annually, according to AllBusiness.com. The number of claims a company has in recent years directly affects its premium rates, either increasing them for a poor record or reducing them for effective safety procedures.

What should be included:
This isn't optional: almost without exception if you have one or more employees you must have workers compensation insurance, even for a home-based business. The penalties for not having this required insurance can be stiff.

Workers compensation covers employees with work-related illnesses and those who are injured on the job, whether on the company's premises or elsewhere, including auto accidents while on business. The insurance pays for the employee's medical services, recovery and rehabilitation plus compensation for lost pay due to a work-related illness or injury. It's not a substitute for health insurance, since employees are only covered while on the job. The Insurance Information Institute gives an overview.

Discounts:
To cut costs, be sure your employees are properly classified for the type of work performed; if you have a poor safety record (and therefore higher premiums) create an awareness program and be sure everyone's using proper safety equipment; if your state doesn't require premiums on overtime, be sure it's not included in the payroll figures submitted to calculate your insurance costs; and consider having a deductible amount on the policy, which is possible in about half the states.

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