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Ways to avoid failure to maintain a safe working environment

California business owners and management have a wide range of responsibilities and concerns when it comes to running their ventures and remaining profitable in an ever-changing economic landscape. One aspect of profitability involves reducing the cost of workers' compensation issues. The owner of grocery chain Safeway was recently interviewed by CFO magazine on his ideas for minimizing these costs. These ideas can also reduce the risk of being accused of failure to maintain a safe working environment.

One aspect of workers' comp expenses that should be examined by business owners involves the implementation and use of an alternative dispute resolution process. This is a route by which unionized employers can opt out of litigating workers' comp matters, and choose to handle disputes through mediation or other avenues. That approach has long been embraced by companies in the construction industry.

One of the biggest costs within workers' comp matters involves litigation. The process of taking these matters to court is incredibly expensive. Attorney's fees can quickly grow, and can eventually outpace any savings achieved by a successful outcome in court.

Safeway has worked to implement an incentive program for workers within its stores. Under the program, employees are encouraged to look for actions taken by other workers that promote and sustain a safe working environment. Positive feedback between peer groups and between workers and management is the central component of the change, and it appears to be effective in reducing dangerous behaviors within the workplace.

This is just one way that California business owners and management can work to reduce the cost of workers' compensation issues. Different strategies may make a better fit for other companies. The key to reducing these expenses is in a concerted effort to find and implement programs that are effective in a specific work environment. By doing so, Safeway has been able to attain an average workers' comp claim cost that is 40 percent lower than the industry standard. They also have a lower risk of failure to maintain a safe working environment.

Source:, Safeway Risk Manager Tells CFOs How to Cut Workers' Comp Costs, David M. Katz, Nov. 1, 2013

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