By Bob Lund
President and CEO

SFM is more than an insurance company; we’ve become a safety and service company. In part, this means that we’re committed to taking and recommending actions to reduce the risk of workplace accidents and injuries.

That’s one of the reasons why we have a company policy prohibiting employees from using cell phones and other electronic devices while driving. It’s also why we’ve been an active supporter of proposed state laws banning the use of hand-held electronic devices while driving.

According to the National Transportation Safety Board (NTSB) , fatalities in distraction-affected car crashes are increasing and totaled nearly 3,500 in 2015. While the NTSB attempts to collect accurate data, there is no reliable method to determine exactly how many accidents involve portable electronic devices. In reality, the scope of the problem is probably much larger. And this increase in accidents and fatalities is occurring at a time when cars and trucks have more safety features than ever before.

Accidents from distracted driving are increasing even in states like Minnesota, Iowa and Wisconsin that have outlawed texting while driving. In contrast, many of the 16 states that have banned the use of hand-held phones and other electronic devices have experienced a 10 – 20 percent reduction in fatal crashes related to the use of these devices.

The Minnesota Department of Public Safety claims that distracted driving accounts for one out of every four fatal accidents — between 75 and 100 deaths — each year. According to a recent Minnesota Poll conducted by the Minneapolis Star Tribune, about 80 percent of those surveyed said using a cell phone while driving should be outlawed, and about the same percentage said the law should treat texting or checking Facebook while driving as severely as drunken driving. Even an informal poll conducted by Minnesota Senate Majority Leader Paul Gazelka (R-Nisswa) reflected about 80 percent support for banning hand-held cellphones.

Legislation that would have made Minnesota the 17th state to prohibit drivers from using hand-held phones and electronic devices did not pass in 2018 for the fourth straight year, notwithstanding the following:

• Overwhelming citizen support;
• Support from Gov. Mark Dayton and the vast majority of legislators from both parties;
• Multiple well-attended rallies at the Capitol and around the state;
• Lobbying support from a diverse group of respected organizations like the Minnesota Safety Council, Association of General Contractors, Minnesota Trucking Association, Insurance Federation of Minnesota, and Minnesota Police Chiefs Association;
• Outspoken backing from large corporations like Cargill and Federated Mutual Insurance Company; and
• Heart-rending letters and testimony at the Capitol and elsewhere from family members who have lost a loved one in an accident caused by a distracted driver.

In fact, the hands-free bill (H.F. 1180) never even got a vote on the House floor thanks to the shameful failure of legislative leaders who acceded to the demands of a handful of legislators who are too gutless to voice the reason(s) for their opposition to the bill in a public forum.

The Duluth News Tribune’s editorial board was incensed by the Legislature’s inaction on the hands-free bill, describing it as “heartless” and titling their 5/17/2018 editorial : “Lawmakers sentence Minnesotans to death.”

While I can appreciate that some Minnesotans don’t want to relinquish the “freedom” to use hand-held smartphones while driving, sometimes we have to place limits on our freedom and establish reasonable rules of the road for the greater good — like saving lives. Mandatory seatbelt use, limits on speed and alcohol consumption, and required insurance coverages are examples of such rules. I have no doubt that a ban on using hand-held devices while driving will become the law in Minnesota when our legislative leaders are convinced that political expediency aligns with doing the right thing.

During the hiring process, there are many tools you can use to ensure you get the best possible candidate. In some cases, one of these tools is a criminal background check. But before you can ask applicants about their criminal history, there are a few stipulations to keep in mind.

“Ban the box” is a national movement , with over 30 states as well as many cities and counties enacting laws governing the issue. Minnesota is one of nine states with a law that makes it unlawful for both public and private employers to ask on application forms whether job candidates have criminal histories. Nebraska and Wisconsin have similar laws for public employers only. Iowa and South Dakota have no ban the box law for either public or private employers.

The law doesn’t prevent employers from asking whether applicants have a criminal history, but it requires that they wait until a job interview to do so. In cases where the company doesn’t conduct interviews, they can’t ask about criminal histories until they extend a conditional offer of employment.

Typically, employers are still allowed to conduct a criminal background check and exclude applicants if a crime is relevant to the job duties, or if otherwise required by law.

The U.S. Equal Employment Opportunity Commission lays out three factors  to help analyze whether criminal conduct is relevant to a job:

• The nature and gravity of the offense

The harm caused by the crime and the elements that went into perpetrating the crime such as deception or intimidation.

• The time that has passed since the offense and/or completion of the sentence

The EEOC doesn’t lay out a specific timeframe, but notes that the risk of recidivism can decline over time.

• The nature of the job held or sought

The job duties, performance circumstances (level of supervision, interaction with vulnerable individuals, etc.) and environment (outside, in a school, etc.).

Pre-employment criminal background checks can be an important tool in certain industries and types of jobs. Use them as part of your hiring process when appropriate, but consult with your employment attorney first.

Other hiring considerations

There are many other tools to consider including in your hiring process:

• Drug and alcohol testing

Especially in trades where drug and alcohol use correlates with increased work injuries, consider making job offers contingent on drug testing. Consult with your employment attorney before starting a testing program.

• Pre-employment physicals

You can conduct a pre-employment physical after making a conditional job offer as long as you require it of all applicants in the same category and only tests for essential job-related capabilities. Consult with an attorney if you decide to withdraw an offer.

• College degree verification

Consider calling schools to verify educational credentials.

• Driving record check

Checking an applicant’s driving record when driving is a job requirement can reveal red flags such as DUI convictions or driving without a license. Motor vehicle records are available through your state’s licensing department.

• Reference checks

In Minnesota, you might find that reference checks are more fruitful now. Statutory changes in Minn. Stat. Sec. 181.967 relieved employers of liability when giving certain reference information in good faith.

• Social Security numbers

Make employment contingent on verification of eligibility to work in the United States. E-Verify is a voluntary system (except for certain employers with federal contracts, where it is mandatory) operated by the U.S. Department of Homeland Security that enables you to check free of charge. If undocumented workers are injured, their employer could potentially pay benefits for years because they will not be allowed to return to work.

A thorough hiring process can prevent costly workers’ compensation claims, and resulting increases in premiums. It’s worth doing your due diligence early so that a new hire doesn’t become a problem employee.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

By Brian Bent
SFM Vice President, Director of Underwriting

You may know you can use your smartphone to hail a ride to the airport. But did you know you can also use an app to find someone to come fix your car, clean your house or even cook you dinner?

These roving drivers, mechanics, housecleaners and cooks are part of what’s referred to as the “gig economy.” Technology allows them to connect with customers directly, which means they can work independently on a job-by-job basis, rather than through an employer.

This fast-growing work arrangement creates new questions about state laws regarding employer/employee relationships, and who will bear the burden of the cost if a gig worker is hurt on the job.

‘Gig economy’ growing fast

A survey conducted by the Federal Reserve Board showed that 36 percent of American adults engaged in some kind of “informal paid work activity” either as a primary or supplemental income source.

From 2005 to 2015, the percentage of American workers engaged in alternative work arrangements, including temporary, independent, contract or freelance work, rose from 10.7 percent to 15.8 percent according to the National Bureau of Economic Research .

Some workers choose this kind of arrangement for the freedom and flexibility. Others just need the extra money, or do it reluctantly because it’s the only type of work they can find.

Digital platforms account for some of the growth, but a larger portion is due to companies increasingly opting to hire workers as contractors rather than permanent employees, according to a 2016 study by Lawrence Katz and Alan Krueger .

Arrangement creates a gap in worker protection

Many of the laws and benefits established to protect workers, including workers’ compensation, are contingent on an employer/employee relationship.

This means gig economy workers might not have those protections unless they choose to purchase them at their own expense. For example, a driver considered an employee of a commercial delivery company is entitled to employer-paid workers’ compensation coverage by law, but a ride-hailing app driver is not in most states. So, if the delivery driver gets in an accident on the job, the medical costs and lost wages would be covered. Ride-hailing drivers would have no such protection, unless they had previously purchased their own coverage.

The gap goes beyond workers’ compensation — medical benefits, retirement benefits and unemployment insurance are all often contingent upon being legally defined as an employee.

Public and private sectors looking at ways to close the gap

Lawmakers, agencies and the companies that run digital platforms are starting to look at ways gig workers can receive the same protections as traditional employees.

The Equal Employment Opportunity Commission has made it a priority to address fair employment practices in the gig economy, according to national employment law firm Littler .

A U.S. Senate committee held a hearing this year on providing retirement benefits for independent workers.

Some state and federal lawmakers have made proposals to provide portable benefits workers could keep while moving from job to job. The State of New York already has a requirement that ride-sharing platforms Uber and Lyft cover workers’ compensation for their drivers.

Uber is piloting a program in other states to provide some medical and wage-replacement benefits to drivers who are injured on the job. It’s a voluntary program
paid for by the drivers, and the benefits are more limited than those provided by workers’ compensation law.

It doesn’t seem there’s any clear, universal solution in sight yet to these lacking worker protections, but it’s encouraging to see that lawmakers and large companies recognize the problem and are trying to find ways to fix it.

As our economy and approach to work evolves, it’s important that our laws keep up so we maintain established worker protections.

In the meantime, if you use the services of those in the gig economy, it’s important to understand your employment relationship and do what you can to protect yourself from liability.

As an employer, you have different requirements for how you must treat workers considered employees, and those considered independent contractors.

From a workers’ compensation perspective, you are required to provide coverage for lost wages and medical costs due to work injuries for an employee, but not an independent contractor.

It’s important to know whether those who do work for you are considered employees or independent contractors under the law. It’s not always simple to determine.

IRS and workers’ compensation laws can define independent contractors differently

Don’t assume that someone considered an independent contractor for tax purposes is automatically considered one for workers’ compensation purposes.

The Internal Revenue Service may have different criteria than your state for establishing whether a worker can be considered an independent contractor versus an employee.

Every state is different, but in most states, for a worker to be considered an independent contractor for workers’ compensation purposes, the worker must have:

• Control over how the work is performed
• Ability to realize financial loss or gain based on how a project goes
• Ownership of equipment to complete the job
• Compensation on a per-job basis

These are just some basic criteria, and most states have additional requirements beyond these. Get details through your state’s department of labor. For example, the labor departments in Minnesota , Wisconsin and Iowa provide additional information online.

Tips for working with independent contractors

If you hire a subcontractor that lacks the proper workers’ compensation coverage, or doesn’t qualify as an independent contractor, it could put you at risk for liability if a work injury occurs, depending on which state the work is being performed in.

Here are some tips to avoid this situation, where applicable:

• Confirm that the subcontractor is an independent contractor as defined by your state’s laws.
• If the subcontractor uses employees, ask for a certificate of insurance as proof of workers’ compensation coverage.

Subcontractors with no employees can choose whether to purchase workers’ compensation insurance for themselves in most states. If they do have coverage, ask for a certificate of insurance for verification. Note that certificate of insurance verification alone does not qualify a subcontractor as an independent contractor. They still must meet all of the state’s criteria.

If they don’t have coverage: Request a copy of the subcontractor’s independent contractor registration form if applicable in your state. Some states have a registration process for independent contractors, and some don’t. Otherwise, ask for a copy of the subcontractor’s current license.

Note that a contractor registration form alone does not qualify a subcontractor as an independent contractor. You should also:

• Check to see that the subcontractor is registered with the state as a business entity.
• Request a Certificate of Insurance for General Liability covering the dates the work was performed with limits of at least $300,000.

Your agent can help

If you need help determining whether a subcontractor is an independent contractor or employee, don’t hesitate to ask your agent for help. This way, you’ll understand the implications for your workers’ compensation premium right away, rather than finding out you owe more than expected at the time of your premium audit.

Wisconsin Gov. Scott Walker signed a bill into law on February 28 that prevents temporary employees who sustain work injuries from suing their employers, rather than going through workers’ compensation.

The workers’ compensation system has traditionally been considered the “exclusive remedy” to cover medical expenses and lost wages due to work injuries; however, a recent court ruling in Wisconsin called that into question.

A January 9 Wisconsin Court of Appeals decision  stated that the estate of a temporary employee who was fatally injured on the job could sue the temporary employer, since the estate had not made a workers’ compensation claim.

The new law, Act 139 , overturns this decision going forward, according to Wisconsin Manufacturers & Commerce.

The approach of the holiday season means it’s time for baking, decorating the house and visits from family. It also means that many workplaces host holiday parties. But what happens when an employee at a work party is injured? In some cases, the injury may be compensable through workers’ compensation.

According to Minnesota law, injuries that occur during voluntary work events are typically not compensable. Statute 176.021.subd.9 states:

Injuries incurred while participating in voluntary recreational programs sponsored by the employer, including health promotion programs, athletic events, parties, and picnics, do not arise out of and in the course of employment even though the employer pays some or all of the cost of the program. This exclusion does not apply in the event that the injured employee was ordered or assigned by the employer to participate in the program.

Exceptions to the rule

Although in most cases the injury would not be compensable, there are some exceptions. The statute applies only if the event is completely voluntary, there is no punishment for not attending and the event does not benefit the employer.

An injury could potentially be compensable under one of these circumstances:

• The event was optional, but those who didn’t attend had to remain at work
• There was coercion to attend the event
• The event was promotional or marketable in a way that benefited the employer
• Employees at the event were working, even if it was optional
• Clients are present and employees are furthering the employer’s business
• Although there is no requirement, there are expectations that everyone attends, with potential consequences for those who do not
• Employees who attended the event were paid or rewarded for doing so

If a work party is taking place on work premises, injuries are more likely to be compensable than those that happen at other locations.

Even for a fun event like a holiday party, don’t let down your guard about safety hazards to your employees. It would be unfortunate if something intended to be enjoyable ended in someone getting hurt.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

Generally, to qualify for workers’ compensation benefits, a person must be established as an employee by receiving some form of payment from the employer for his or her services.

So, when someone is injured while volunteering, they’re usually not eligible for workers’ compensation benefits, but there are exceptions. For example, volunteers who are paid in kind or who fall into particular classes specifically mentioned in state law can be considered employees.

Non-monetary compensation

Someone who is being paid in kind for their services — through free meals from a restaurant or reduced rent from a landlord, for example — could be considered an employee if the parties had entered into an agreement about compensation. There must be some intent to enter into this relationship — receipt of a mere tip or gift doesn’t make someone an employee.

Protected classes of volunteers

In some cases, state law defines certain classes of volunteers as employees for the purposes of workers’ compensation.

Minnesota law  defines the following types of volunteers as employees:

• Volunteers working in state institutions, such as correctional facilities, under the supervision of the commissioner of Human Services or the commissioner of Corrections.
• Volunteers participating in programs established by local social service agencies , such as a county health and human services department. In this case, “local social services agency” means any agency established under Minn. Statutes section 393.01 , with each county in the state typically having a social services agency that includes the board of county commissioners.
• Volunteers in the building and construction industry who are working for joint labor-management nonprofit community service projects.
• Volunteers serving at a Minnesota veterans home.
• Volunteer ambulance drivers and attendants.
• Volunteer first responders (such as firefighters).

Wisconsin law also includes certain volunteers in its definition of employees, including:

• Members of volunteer fire squads, rescue squads or diving teams.
• Students in a technical college who, as part of their training, perform services or produce products for which the school collects a fee or who produce a product that is sold by the school.
• Public or private school students performing services as part of school work training, work experience or work study program, if certain conditions are met.
• Employees, volunteers or members of emergency management units and certain regional emergency response teams.

Good Samaritans

So-called Good Samaritans are almost always ineligible for workers’ compensation benefits because there’s typically no intent to establish an employment relationship and they’re not usually compensated for their services. For example, in a 1969 Minnesota case (Huebner v. Farmers Co-op)  where a tractor driver was seriously injured while helping a grain elevator operator who had asked for assistance, the Minnesota Supreme Court ruled that the driver wasn’t eligible for workers’ compensation.

Things to consider when using volunteers

Since volunteers typically aren’t entitled to workers’ compensation benefits, organizations should think about the likelihood of an injury, and the potential legal and financial consequences if one occurs. If an injured volunteer files a lawsuit, who will pay the damages?  Will a general liability or some other insurance policy defend against the claim and pay resulting damages?  An employer’s potential liability may well exceed the value of the volunteer’s services.

For more information, see our Volunteers in the Workplace Legal Advisory – Minnesota and Volunteers in the Workplace Legal Advisory – Wisconsin .

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

Iowa’s workers’ compensation system will see some significant changes on July 1, under a bill signed into law by Gov. Terry Branstad in March.

Following are the changes employers are most likely to notice:

• Pre-existing conditions
  Employers will now only be liable for the portion of an employee disability related directly to an injury that occurred at their organization. This is referred to as “apportionment,” and it prevents the employer from being held liable for portions of a disability caused by work injuries at previous employers or other pre-existing injuries.
• Shoulder injuries
  The law provides for retraining at community colleges for certain employees who cannot return to employment due to shoulder injuries. It also adds the shoulder as a scheduled body member, meaning the amount of compensation due an employee who sustains a work-related shoulder injury is spelled out by law.
• Intoxication
  If an employee tests positive for drugs or alcohol at the time of a work injury or immediately after, the burden of proof will be on the employee to show that he or she was not intoxicated at the time of the injury.
• Notice of injury
  In order to receive workers’ compensation benefits, the law will require injured employees to notify their employers within 90 days from the date they are injured, which the law defines as the date they “knew or should have known that the injury was work-related.”
• Interest rates
  Interest rates on workers’ compensation awards will change from a fixed 10 percent to the Federal Reserve’s one-year treasury constant plus 2 percent.
• Permanent partial disability
  Under the new law, permanent partial disability payments won’t be made until the injured employee reaches maximum medical improvement, and doctors’ permanency ratings will be based on American Medical Association guidelines. Currently, payments are made prior to maximum medical improvements, and so the ratings are estimates.

One of the more controversial provisions of the bill was ultimately dropped — a provision that would have cut off permanent total disability payments at age 67.

Photo of Iowa Gov. Terry Branstad by Rich Koele / Shutterstock.com

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

The Wisconsin Medical Examining Board adopted new guidelines for prescribing opioid painkillers aimed at combating heroin use, according to the Milwaukee Journal Sentinel.

According to the article, the guidelines include:

• Treating pain through other methods before prescribing opioids
• Prescribing the drugs in the lowest dose possible
• Issuing multiple prescriptions with specific refill dates rather than one larger prescription
• Documenting a treatment plan to avoid addiction and overdose

For more details, see the Milwaukee Journal Sentinel article .

Each day, 91 people die from an opioid overdose in the U.S., according to the Centers for Disease Control and Prevention .

To prevent injured workers from ending up with painkiller addictions, the state of Minnesota has adopted stronger requirements for prescribing physicians.

The new rules for long-term opioid prescriptions  took effect in Minnesota on July 13, 2015.

Now, before prescribing long-term opioids, doctors are required to:

• Affirm that the patient cannot maintain functions of daily life without the medication, doesn’t have somatic symptoms disorder, doesn’t have a history of failure to comply with treatment, and doesn’t have substance abuse disorder.
• Ensure that all other pain management options have been exhausted.
• Determine whether the following circumstances are present, and whether they constitute contraindications for long-term opioid use: history of respiratory depression, pregnancy or planned pregnancy, history of substance abuse, suicide risk, poor impulse control, and regular engagement in an activity that could be unsafe for a patient on opioids.
• Complete a scientific assessment to determine the patient’s risk for abuse.
• Explain the potential consequences and complications of using opioids long-term to the patient.
• Enter into a written contract with the patient that includes a provision for drug testing at the doctor’s discretion.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.