August 2014

Stress at Work #1

Stress In The Work Place - 1
Stress Costs and Costs Plenty


Stress Claims Up 700%

Industrial stress claims are the fastest growing type of Workers' Compensation claim today. While the incidence of disabling injuries dropped 8% since 1980, the frequency of stress claims increased almost 540% for the same period. Between 1979 and 1988 (the last year that statistics are available in California) job-related mental stress claims reported to employers increased by nearly 700%. It was estimated in 1988 that the overall cost to employers and insurance companies (and ultimately the general public) would be greater than $460 million for these claims.

In 1985 the cost against insurance companies for closed stress cases averaged about $11,400, with permanent disability indemnity accounting for three-quarters of all claim made. It is estimated that when all cases are resolved, the average cost was expected to reach $13,200. These were the figures for 1985. Today it is likely that costs per stress claim are going to be found to be considerably higher.


Claims: The Tip Of The Iceberg

While these statistics already sound exorbitant, they may only be the tip of an iceberg. California Workers' Compensation allows workers to file two types of claims. The first of these are claims for acute injuries. This is a claim for an injury that happens on a given day at a specific time. The worker has one year to file this claim with his employer and five years with the Workers' Compensation Appeals Board. The other type of claim is for a cumulative injury. This type of claim can be filed for injuries the employee alleges took place either over years of employment or within a year after he has been advised by his doctor that some part of his injury was related to his job.






For example, an employee can allege that the stress he was subjected to occurred over many years of employment. There need be no specific event to claim as an acute injury. Under this law an employee who has a heart attack two years after he retires can allege that the stress of his job for the past ten or twenty years was a substantial factor.

Under California law a "substantial factor" can be 1% or greater. If the stress component is found to be 70% or greater the employee can be entitled to a full permanent disability pension for the rest of his life. This pension is of course paid by the employer.

The California Workers' Compensation Institute maintains that the actual number of reported claims for mental stress may only represent 10% of those yet to be reported. Virtually all mental stress claims are litigated, and in the vast majority of cases, the Application for Adjudication filed by the workers' attorney is the first notice of injury.

There are numerous factors suggested as the cause of the great rise in stress claims. One might be the proliferation of referral agencies which advertise for "stress cases." Another factor is the present state of the economy. Some sources state that still another factor might be the reduced character of today's workers.

I believe that there are three important reasons which are more common and yet rarely discussed about.

  • Employers are not adequately trained to recognize stress problems or situations early.
  • They do not know what stress is and hence are not solving problems before they reach the level of
       legal action. They are generally not capable of either solving the problems that create stress or are
       they able to get their employees to the right people to help them solve problems before a claim
       needs to be filed.
  • Too often employers want these problems to just go away. The employer may see the stressed
       employee as an inconvenience or a nuisance. They may believe that they have more important things
       to do in running their business, solving marketing and other business problems and
       pleasing stockholders. They may not see themselves being the solution to their employees "personal"
       problems. They may expect the medical profession to solve these stress problems.
  • The problem with this is that the buck stops at the top. Only management can take the
     responsibility. When management does not act the employee may feel that the employer does
       not care or is uninterested. This alienates the employee from the employer and makes it much easier

       to file suite.


  • The claimant is more likely to be female, at least 55% of the time. This is double the percentage of
        all disabling injuries.
  • Stress claimants average age at the time of stress injury is 40 years of age. This can be compared to
       average age for all other disabled workers which is 34 years of age. Although workers under the age
       of 25 account for nearly a quarter of all disabling work injuries, they account for only 5% of stress
  • At the time of injury stress claimants earned an average of $410 per week, about the same as the
       statewide average weekly wage, this is 12% more than the average found in all other disabled workers.
  • White collar occupations dominate the mental stress claim population. Workers in white-collar jobs
       (professionals, managerial, sales or clerical positions) account for scarcely 20% of all disabling injury
       and nearly 70% of stress claims. Forty percent of stress claims are filed by sales and
  • Most mental stress claims result from cumulative exposure, that is, stress occurring over an extended
       period of time. Nearly 25% are asserted during the first year of employment, and more than half of
       these are within six months of being hired.
  • Only one in ten mental stress claims occur subsequent to a specific work related incident, e.g., an
       armed robbery on the job or a proven episode of mental abuse by a superior.
  • Of blue collar workers filing claims, one in three is a laborer and only one in ten is a machine operator.
       Uncertainty over future job prospects and not boredom appear to be the main reason for these stress
  • * Taken from California Workers' Compensation Institute, Research Notes, April 1988 and June 1990.



    Causes Of Stress

  • Of all of the reasons for stress the most frequent reason given is job pressure, next is harassment. By
       their very nature both job pressure and harassment are extremely difficult to assess and quantify. In
       fact, they are often nebulous in nature. In spite of this four out of ten claimants allege this combination.
       What makes these two categories most disturbing are that they are so often contributed to and even
       directly caused by the owners or management of the company. Frequently workers who allege
       harassment state that supervisors were either directly involved or did nothing to stop the harassment
       after it was reported.
  • Job pressures can arise from many causes. Poor staff selection, poor training, unclear job description,
       too much work for skill level and personal inability to cope are some. Often these individuals may
       have other "outside" problems that they bring with them to work and most frequently these problems
       go unnoticed or are considered to be unimportant by management. Hence, no help is offered or
       provided. Too often lack of sympathy and caring is the trigger for feeling "job pressure" or
  • Job termination for all reasons often causes stress because it is either handled poorly or no attempt is
       made on the part of the employer to assist the employee in transferring to a new job without great
       distress. Often when employees are discharged they feel some combination of embarrassment, angry,
       guilt, hostility and lack of unappreciation. The termination may cause or accentuate financial distress
    nd they may suffer a sense of hopelessness. While employers often say this is not their problem
       (and they may be right) often it becomes their problem when a stress claim is filed.
  • Thirty percent of stress claims allege multiple causes. Once a worker is injured, he will look for
        reasons to justify his position.
  • All too often employers and their managers give employees sufficient reasons to file stress claims.

    The Hard Cost of Stress

  • It is likely that the cost of stress claims will continue to rise. An average claim of $25,000 or more will
       be very likely within the next few years. Some claims may rise into the $40 or $50,000 range in the near
       future. It must be remembered that Workers' Compensation law is directed to protect the worker and
       not the employer. The more doctors, lawyers, psychiatrists, psychologists and other professions get
       involved, and as claims for rehab are not only requested but even required in judgments, costs will
       definitely rise.

    What Can Be Done?

  • The most important thing that the owner-manager can do is see the handwriting on the wall. He or she
       must then create programs and in-service training in recognizing and preventing stress. They must
       learn to refer employees who bring stress from their home to the job to competent help, they must
       learn to recognize stress hazards (not unlike accident prevention) and working on their own stresses
       and creating positive goals for themselves and their employees can be extremely helpful.
  • Stress prevention not only saves money, but it can create a higher level of esprit de corp. It can
       increase productivity, job satisfaction and profits.
  • Stress prevention programs are not unlike accident prevention programs. Not only will the cost of
       your Workers' Compensation Insurance go down but you may even sleep better at night.