Workers' compensation has important legal ramifications for your small business, including compliance, safety and employee relations. Federal and individual states all have laws regarding workers’ compensation that are meant to protect both the employee and employer. As such, matters relating to workers' comp are typically housed in the HR department as a human resources responsibility. The HR department serves the interests of both the employee and employer in a complex balancing act of analyzing compensation, advising managers on policy and developing training for safety programs to avoid claims.

Compensation Awareness

Your HR department keeps you in compliance. Workers’ compensation can vary by region, and your business needs to be aware of local, state and federal requirements regarding what you are legally bound to provide and report. Your HR department can advise you on what needs to be updated, communicated to employees and how to handle any situation arising from an on-the-job accident or sickness. Being aware of the laws protects you in such situations, as one of the benefits of workers’ compensation is that it protects your business from court action by accepting limited liability.

Policy Communication

Based on compliance and best practices, the HR department advises managers on policies that best protect the company in the event of a claim. This means creating consistent procedures such as accident reporting. For example, if your business has a kitchen and an employee nicks her finger with a knife, clearly communicated policies stress that she report to her supervisor the nick no matter how small. The HR department clearly communicates these policies in the employee handbook and provides templates for reporting accidents. The accident report for a nick doesn’t equate to a claim, but should it become infected and require medical attention, the proper documentation is in place for a later claim.

Comp Claims

When it comes to that moment of handling a workers’ compensation claim, your HR department keeps you informed based on the department’s preparedness. The HR manager advises managers of the situation, is the point of contact, completes required forms and even attends potential hearings. If that employee with a nick never reported the accident according to your policy, leaves your employment and later tries to file a claim, your HR department knows how to manage compensation-based procedures and is your best line of defense for bogus or unexpected claims.

Safety Training

Although most businesses say, “Safety first,” it is the training that your HR department implements and the cultural standards set that uphold such a statement. The laws protecting employees expect this, and your best defense will always be prevention of work-related accidents. Your HR department will analyze past claims and make recommendations for future safety training. Ultimately this can lower your company’s risk and lead to lower rates for workers’ compensation.