Conventional wisdom held that giving injured employees lump-sum payments in workers’ comp cases discouraged them from returning to work. A new study tested that theory.
Turns out conventional wisdom may be wrong in these situations.
A new study from the Workers Compensation Research Institute shows lump-sum payments don’t discourage employees from returning to work.
On average, more injured employees returned to work after receiving lump-sum settlements than exited. Employment increased from 25% of employees at the time of the payment to 32% after one year. The exception was older workers who had a decline in employment after a settlement.
Most of the injured employees (78%) who received lump-sum payments didn’t change their employment status: Those who were employed stayed at work, and those who were not working remained unemployed.
Of those employees who changed their employment status, 30% who were employed left work and 19% of those who were not employed found employment.
“This is an important study because we need to find out whether settlements discourage return to work for injured workers who want to return to work or assist them in closing this chapter of their life and moving on with their career,” said Bogdan Savych, author of the study.
The study followed 2,138 employees who were injured in Michigan in 2004 and received a lump-sum settlement.
What’s your experience been with injured employees who receive lump-sum payments in workers’ comp cases? Let us know in the comments below.