Most observers expect newly-confirmed Labor Secretary Marty Walsh, a former leader in the Laborers’ International Union, to focus on workplace safety. But one of the most immediate impacts of a federal executive branch on workplace safety is coming from an unexpected source – the Trump administration Securities and Exchange Commission (or SEC)
This potential boon to workplace safety is known as the Human Capital Disclosure Rule which as enacted in November 2020. A recent call from a client tells me it could already be having an impact.
The human capital disclosure rule
I got a call from a client who works at Tyson. Tyson stock is publicly traded. The client informed me the plant was offering to pay the unpaid medical bills of their employees who were hurt at work.
My first reaction was along the lines of “isn’t that what workers comp. is for, what are they trying to pull?” (I took out the profanity) But then I remembered this human capital disclosure rule.
The human capital disclosure rule was implemented because 85 percent of corporate costs are “human capital” and if investors want to be able to value companies they need to do know the cost of “human capital.”
If you run a meatpacking company, one major component of human capital costs is the price of work injuries. In theory, you should be able to measure those costs through workers compensation. But things are different in practice.
Cost-shifting
In practice those costs of work injuries get shifted on to health insurance, Medicare, Medicaid, Social Security and private disability. This is largely a function of aggressive claims handling practices that make it difficult for injured workers to get workers compensation benefits.
But if investors want to know the costs of work injuries, even a major food processor wouldn’t be able to measure the cost of work injuries. So, companies are improvising with programs like the one described by my client. These special programs could give employers and investors a better idea about the true cost of medical care from work injuries.
Impact of voluntary payments on workers compensation in Nebraska
Payments for work injuries made to comply with the human capital disclosure rule could impact eligibility for benefits under the Nebraska workers’ compensation act. I would argue that such payments would extend the statute of limitations on a claim if they were paid within two years of the last payment of benefits. A voluntary payment of benefits once the statute of limitations two year statute of limitations had run would not extend a claim.
A different take on the human capital disclosure rule in the Biden administration?
The commentary on the human capital disclosure rule states that employers have a lot of discretion about how to implement the rule. Maybe, the more worker-friendly Biden administration may implement tougher standards to force some employers to more accurately measure the cost of work injuries.