Employers sometimes ask whether they can screen job applicants for prior workers’ compensation claims.

Often, employers simply want information about previous claims in an effort to prevent reinjury. Even if this is the case, asking job candidates about past work injuries, disabilities or medical histories is illegal under the federal Americans with Disabilities Act (ADA).

At the same time, most states have anti-discrimination laws prohibiting such screenings. This includes human rights and fair employment laws in Minnesota, Iowa, Nebraska, South Dakota, Kansas and Wisconsin.

Employer can ask applicants about ability to perform required tasks

While employers are barred from asking applicants about prior workers’ compensation claims, they are permitted to request other types of information.

To begin, a prospective employer can ask in an interview or on a job application whether the applicant can perform the essential functions of the position with or without reasonable accommodation.

The employer can also ask the applicant to undergo a pre-employment physical examination after a conditional job offer has been made, as long as an examination is required of all applicants in the same category and it only tests for essential job-related capabilities.

If you require pre-employment exams in your organization, a written job description can be a valuable tool to the examiner.

Be sure to consult your employment law attorney to ensure your hiring practices comply with the laws in your area.

One final tip: Any records developed as part of the pre-employment process are required to be kept in a separate file from other personnel file information.

For more information, see SFM’s “Screening job applicants for prior workers’ compensation claims” Legal Advisory.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

Originally posted May 2019

Following a thorough hiring process is one important way you can prevent problem workers’ compensation claims, along with other challenges.

“I always talk to employers about the importance of hiring and retaining the right people,” said Loss Prevention Specialist Dana Mickelson. “Usually if you have problem employees and they stick around long enough, they then are typically the ones with work comp claims that become more expensive.”

Choosing the right employee for a role is rarely easy, but there are steps you can include in your process to help you more confidently make hiring decisions.

Consider safety in your application and job description

Use the application to start the process off on the right foot.

We recommend employers have an official application process that includes a form applicants must complete that follows local, state and federal laws. Each job posting should include a current job description noting the physical requirements of the position.

Consider having an ergonomist or physical therapist review the position and job description. This ensures you’re documenting, in detail, the correct physical requirements for the job.

Being competitive in the market can also help you attract the best applicants for the role.

“Some companies have recently improved their pay and benefits to be competitive in the market, which in turn helps them to hire and retain their best employees,” Mickelson said. “That includes not only medical and retirement fund benefits, but also flexible schedules, among other perks for employees.”

Ask the right interview questions

Once you’ve narrowed down the pool of applicants, it’s best to hold several rounds of interviews, and have multiple people interview each candidate, to gather a more complete view of the candidate.

When preparing interview questions, we recommend including open-ended questions related to workplace safety. Let that person give their thoughts on the role and safety, rather than feeding them the answer you want, or making it easy for them to give you the answer you expect.

How you ask questions is important, but so are the questions themselves.

State and federal laws are strict about what an employer can ask regarding a person’s physical limitations or workers’ compensation claim history, but don’t avoid these topics altogether. Employers can glean helpful information by asking other, related questions.

For example, asking an applicant about their past workers’ compensation claims is prohibited, however, employers can ask them about their previous workplace safety training and if they feel ongoing safety checks are important.

Similarly, an employer may not be able to ask a candidate about any disabilities, but they can use the job description to demonstrate the requirements of the role, and to ask whether the candidate can perform the tasks listed.

“I suggest employers use a detailed job description as part of the hiring process,” Mickelson said. “During the hiring process, you can review the essential functions of the job and have the applicant or new employee sign a statement confirming they can perform those functions.”

Mickelson said that having a confirmation of the employee’s capabilities documented may be helpful in the event of a work injury.

Follow a thorough vetting protocol

Once you’ve picked a candidate to move forward with, it’s in your best interest to do a background check and call references.

Below, we offer a list of recommended steps to take for every applicant you want to hire. Keep in mind that some of these steps may not be permissible until a conditional offer of employment has been made. Be sure to consult your employment law attorney.

• Call references
• Conduct a nationwide criminal background check; be sure to check state and local laws for any “Ban the Box” type regulations and compliance with the Fair Credit Reporting Act
• Consider a pre-employment physical examination for physically demanding jobs in accordance with state and federal laws
• Verify their educational credentials and professional licenses
• Verify legal eligibility to work in the U.S.
• Use E-Verify as a tool
• For jobs that require driving, check motor vehicle records
• For safety-sensitive jobs, conduct drug and alcohol testing in accordance with state laws

“The applicant may interview well, and you can’t always pick up on red flags during the interview process, but the background check and references may prevent onboarding the wrong candidate,” Mickelson said. “Many employers don’t check references because they feel that they don’t learn anything, but it’s important to at least verify employment history.”

Keep safety top of mind while training a new hire

Once you’ve hired your new employee, include safety training as part of their onboarding and then follow up afterward to reinforce the training.

SFM loss prevention experts recommend checking in three, six and nine weeks after a new hire is onboarded to answer any questions they may have and to emphasize the safety training they heard early on in their new role. It’s also important to maintain safety training records and have the employee sign acknowledgement forms regarding safety policies and practices.

The three-, six-, and nine-week check-ins are critical to identify any additional safety training needs.

Also ensure a robust safety orientation is provided to everyone, regardless of language. If a new hire does not speak English and that is your company’s primary language, make sure to assign a bilingual supervisor to stay in contact with them and to provide them the same standard of safety training.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for employment practices.

By Aaron Schmidt, Managing Counsel at SFM’s in-house law firm

On May 30, 2023, Gov. Tim Walz signed the state’s recreational marijuana bill, making Minnesota the 23rd state in the U.S. to legalize recreational marijuana for adult use.

The new law contains several provisions that affect employers doing business in Minnesota, addressing changes to medical marijuana, use of off-duty lawful consumable products, drug testing in the workplace, as well as implementation of workplace policies. We recommend employers consult with an employment law or business law attorney, as the recreational marijuana law will significantly impact how employers address marijuana-related workplace issues.

Impact on workers’ compensation

From a workers’ compensation perspective, the new law does not substantively change the analysis for determining whether an injured employee’s intoxication allows for a defense to a claim.

Now that recreational marijuana is legal in Minnesota, it is effectively no different at the state level than any other legal intoxicating substance, such as alcohol, and therefore is subject to the Minnesota Workers’ Compensation Act’s intoxication defense statute. The statute states that if the injury was intentionally self-inflicted or the intoxication of the employee is the proximate cause of the injury, then the employer is not liable for compensation, however the burden of proof of these facts is upon the employer.

However, it’s important to note that because recreational marijuana remains illegal at the federal level, employers can still prohibit use, possession, and impairment from marijuana products if failing to do so would violate federal or state laws or regulations or cause the employer to lose federal funding or licensing-related benefits.

Effect on workplace policies

Despite the enactment of laws around the country permitting the recreational use of marijuana for adults, employers in the U.S. are not required to permit or accommodate marijuana use, possession, sale, transfer, or impairment while at work, on work property, or operating an employer’s vehicle, machinery, or equipment.

An employer may create written policies addressing such prohibitions, so long as the employer has enacted work rules regarding marijuana use and marijuana testing consistent with Minn. Stat. Section 181.951, Minnesota’s Drug and Alcohol Testing in the Workplace Act (DATWA).

This statute is specific to Minnesota, and drug testing laws will vary by state, so employers should refer to their local jurisdiction for the applicable laws. Employers with questions about the application of this new statute, and the appropriate immediate actions to address it, should consult an employment law or business law attorney in their jurisdiction.

Determining marijuana intoxication levels

While the new law addresses polices prohibiting marijuana use while at work, existing Minnesota law prohibits an employer from discriminating against an employee’s use of lawful consumable products while not at work, and the new law adds marijuana to the definition of “consumable products.”

The one difference from other intoxicating substances, however, may be how marijuana metabolizes and how that impacts testing results, potentially making it more difficult to measure intoxication and/or impairment compared to other legal substances.

According to Mayo Clinic Laboratories , “depending on the frequency of cannabis usage, its potency, or THC content, the detection limit of the laboratory assay and other factors, you can still get positive results or detect the carboxy-THC in the urine 30 days or longer once a person stops using marijuana.” This can make it difficult to tell when and where the marijuana use took place, complicating whether it can be discerned if the use was at work or not.

Work injury and marijuana use

If an employee is believed to have been intoxicated at the time of a work injury, there may be available defenses to pursue in denying the claim. In Minnesota, under Statute Section 176.021, Subdivision 1, an employer can raise an employee’s intoxication as a bar to a claim for workers’ compensation benefits if it can be shown that:

1) The employee was intoxicated at the time of his or her injury, and

2) That the intoxication was the proximate cause of the employee’s injuries.

The employer has the burden of proving these elements, and satisfying this burden starts with a proper understanding of the laws regarding substance use, testing, and defenses in the employer’s jurisdiction.

If an employer suspects that an employee is impaired at the time of the work injury, they should inform their workers’ compensation insurer immediately so a proper investigation can take place.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

Do temporary employees need safety training? Are subcontractors covered for workers’ compensation?

If your workforce includes temporary employees or independent subcontractors, you may have questions like these.

Even these workers need safety training and workers’ compensation coverage. Here are a few things you should know about hiring subcontractors and temporary employees, and their workers’ compensation coverage and safety.

Hiring temporary workers

When you hire a temporary employee, you need to be sure that the outside temp agency will be liable for payment of workers’ compensation benefits in the event of a work injury.

Beware of scanty contracts, either deliberately or unwittingly silent on important legal considerations including workers’ compensation coverage. Consider having contracts from temp agencies reviewed by an employment attorney before you sign them.

Keeping temporary workers safe

Give temporary employees the same safety training you give regular employees. Don’t skimp on safety training just because someone will only be working with you for a short time.

“The most common causes of injuries we see among temporary employees include workers not being properly trained for the jobs they’re performing, or the physical abilities of the individual do not match the task,” said Lee Wendel, SFM Director of Loss Prevention.

Here are a few suggested questions employers should ask their temp agencies to keep workers safe:

• Will the agency provide personal protective equipment for the temporary employees?
• What safety training will be provided by the agency?
• Does the temporary employee require any additional help to perform the job?
• Is worker safety a company priority?
• Will you visit the worksite and conduct a safety assessment?

For more resources on temporary worker safety, visit OSHA’s Protecting Temporary Workers page .

Hiring subcontractors: Are they covered for workers’ compensation?

Hiring subcontractors that are uninsured can pose a significant liability to your organization.

Anyone working independently for your organization needs to be covered for work injuries. An independent contractor working alone may or may not carry workers’ compensation insurance.

If contractors say they have coverage, you’ll need to get certificates of insurance at the time they are engaged. Your SFM premium auditor will look for these certificates at the time of your premium audit. If a subcontractor does not provide a certificate of insurance for work comp, we will typically include their
payroll in the calculation of your premium.

Some entity types with no employees may not be required to carry workers’ compensation insurance. If this is the case then you’ll need to get insurance certificates for general liability with adequate minimum limits of coverage.

Are subcontractors truly ‘independent’?

You’ll need to verify that the individual meets the state’s legal criteria to be considered an independent contractor. The specific requirements vary by state, and an employment attorney is your best resource to make sure your contractors meet them.

In addition to verifying coverage and determining “independent” status, SFM attorneys recommend having a subcontractor agreement drawn up by an employment attorney for all subcontractors to sign before they go to work for you.

For more information on Minnesota’s guidelines, see SFM’s General contractor’s liability Legal Advisory and Hiring subcontractors CompTalk.

Determining whether a subcontractor could be considered an employee

The first thing you need to know is that your state and the IRS may have different criteria for establishing whether a subcontractor can be considered an independent contractor (for which you don’t need to provide workers’ compensation coverage) versus an employee (for which you must provide coverage in most states).

This means even subcontractors that qualify as independent contractors for tax purposes, might still be considered employees by state standards.

Every state is a little different, but most require that the subcontractor have control over the method and manner in which the work is completed, among other criteria to be considered independent contractors.

Here’s information on classification of workers in some of SFM’s core states:

• Minnesota
• Wisconsin
• Iowa
• South Dakota
• Kansas
• Indiana
• Tennessee

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

By Aaron Schmidt, Managing Counsel at SFM’s in-house law firm

The Minnesota Supreme Court issued the long-awaited opinion of Chrz v. Mower County and Minn. Counties Intergovernmental Trust on March 8, 2023.

Ryan Chrz was a Deputy Sheriff in Mower County, Minnesota, who had been diagnosed in 2019 with work-related PTSD, major depression and moderate to severe alcohol disorder, after witnessing several traumatic events at work. In May of 2020, he filed a claim petition requesting workers’ compensation benefits.

An independent medical exam of Chrz was requested in December 2020 by his employer and insurer, and that doctor opined that Chrz did not meet the criteria for PTSD under Minn. Stat. Section 176.66, subd. 1.

The following March, he was examined again by his treating doctor, who concluded that his condition had improved. As a result, Chrz’s treating doctor changed his diagnosis from PTSD to “other specified trauma and stress related disorder” caused by work.
The matter went to hearing in June 2021, and the compensation judge found that Chrz had sustained work-related PTSD and awarded him ongoing payment of wage loss. She further held that his treating doctor had diagnosed PTSD from April 2019 through March 2021, but that from March 2021 forward, Chrz no longer had PTSD. However, Chrz had argued that despite a diagnosis change, he remained disabled from a mental illness.

The employer and insurer appealed, and the Workers’ Compensation Court of Appeals (WCCA) reversed the compensation judge’s decision, stating that Chrz was no longer entitled to ongoing benefits because he no longer met the criteria for having a personal injury under Minnesota workers’ compensation law.

Chrz appealed to the Minnesota Supreme Court, which affirmed the WCCA, holding that an employee is not entitled to workers’ compensation benefits under Minn. Stat. Section 176.66, subd. 1, when the employee no longer has a diagnosis of PTSD by a licensed professional using the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders as required by Statute.

This opinion provides clarity in defining the nature and extent of PTSD claims in Minnesota, and a definitive interpretation in limiting the narrow application of Minn. Stat. Section 176.011.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

By John Hollick, Chief Defense Counsel with SFM’s in-house law firm

The Minnesota Supreme Court addressed the statutory presumption of posttraumatic stress disorder (PTSD) in Juntunen v. Carlton County in December 2022, significantly impacting the criteria for compensability of certain workers’ compensation claims.

Generally, an injured employee has the burden to prove the elements of a workers’ compensation claim, including that the employee has an occupational disease. However, the state’s PTSD presumption under Minnesota Statute Section 176.011, Subdivision 15(d)(e) and effective January 1, 2019, relieves certain employees of at least part of the burden of proving that they suffer from a compensable occupational disease. Law enforcement employees are among the professions specifically included in the presumption.

In this case the employee, Doug Juntunen, worked as a deputy sheriff for Carlton County, during which time he claims he experienced several traumatic events, both professionally and personally. He was diagnosed with PTSD by a licensed psychologist in September 2019. The day after he received his diagnosis, the deputy informed his supervisors and was placed on leave. The employer and insurer later denied liability of Juntunen’s workers’ compensation claim, and the case went to litigation.

At a subsequent hearing, both sides presented differing medical opinions concerning Juntunen’s diagnosis. The treating provider felt that he did qualify for PTSD benefits, while the psychologist brought in by the insurer for an Independent Medical Evaluation (IME) felt that he did not meet all the requirements of PTSD, but rather suffered from severe depression.

The facts revealed that Juntunen had experienced several potentially traumatic experiences during his career, including events both at work and in his personal life. The IME doctor admitted that he was only relying on the employee’s symptoms for 30 days prior to the IME examination, however the compensation judge accepted the IME’s medical opinion and denied the claim for benefits based on a PTSD diagnosis.

The case was appealed, and the Workers’ Compensation Court of Appeals (WCCA) reversed the opinion. In December 2022, the Minnesota Supreme Court affirmed the reversal by the WCCA and awarded benefits for the PTSD diagnosis.

The PTSD presumption in Minnesota Statute 176.011, Subdivision 15(d)(e) states that an employee (1) must be employed in one of the enumerated occupations, (2) be diagnosed with PTSD by a licensed psychiatrist or psychologist, and (3) must not have been diagnosed with PTSD previously.

Once Juntunen offered a diagnosis of PTSD from a licensed psychologist, the PTSD presumption applied. This fact, along with the unchallenged findings of the compensation judge that Juntunen was a deputy sheriff and had no previous PTSD diagnosis, triggers the presumption that Juntunen had a compensable occupational disease.

Interestingly, in the opinion, the Minnesota Supreme Court stated that “ultimately, the PTSD presumption represents a balancing between two competing policies: prompt payment of employee’s medical expenses for PTSD treatment and stewardship of public monies. The legislature determined that employees suffering from PTSD need timely access to medical care, and the PTSD presumption puts the onus on employers to quickly resolve such claims.” As the IME did not evaluate Juntunen until 10 months after he notified Carlton County of his diagnosis, the Minnesota Supreme Court stated, “that is too long to leave employees’ benefits claims unresolved.”

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.

When you purchase a workers’ compensation insurance policy, a coverage called employer liability insurance is also included.

Sometimes called Part 2 or Coverage B, this insurance is rarely used in most states, and makes up a very small part of the workers’ compensation insurance premium.

Because of this, you might just pass over this coverage if not for the need to choose employer liability limits.

The basic employer liability limit is usually $100,000/$500,000/$100,000. That’s $100,000 per accident, $500,000 per policy, and $100,000 per employee.

Since an employer liability claim is unlikely, other considerations usually factor into decisions to increase the limits above the basic $100,000/$500,000/$100,000 level.

What employer liability insurance covers

There are only a few rare cases where employer liability insurance coverage might be used by a policyholder.

Some states permit spouses and dependents of injured employees to sue an employer. Employer liability insurance would provide coverage in those cases.

A more common (but still rare) example of when employer liability limits might be used is when an injured employee sues a negligent third party, and that third party sues the employer for contributory negligence.

For example, say a factory worker was injured while using machinery that his employer purchased from another company, and the employee claims the manufacturer was to blame for the injury. The employee might try to sue the manufacturer for damages. The manufacturer might then sue the employer saying the machine had not been properly maintained or the employee wasn’t properly trained to use the equipment. This is called a third party over action. At that point, the employer liability insurance would cover the employer’s possible settlement and damages costs up to the stated policy limits. The employer liability insurance would also cover defense costs until the policy limits have been met by settlement or damages payments. Defense costs are paid outside the policy limits.

Just as with the workers’ compensation insurance portion of the policy, a claim can only be eligible for coverage under the employer liability portion if it stems from an injury determined to be work-related, as defined by state statute.

Choosing employer liability limits

The basic employer liability limit is usually $100,000/$500,000/$100,000.

Oftentimes policyholders who choose to increase their limits do so because of contractual requirements or requests from their umbrella carrier.

For example, a general contractor might require all subcontractors to set their employer liability limits at a particular level. Or, a policyholder’s general liability or umbrella carrier might have similar requirements and ask for increased limits.

For those reasons, it is common to see employer liability limits increased to $500,000/$500,000/$500,000 or $1 million/$1 million/$1 million.

Because the coverage is rarely used, increasing coverage limits is typically inexpensive.

For example, the cost to raise the limits to $500,000/$500,000/$500,000 is 0.8 percent of premium in most states. The cost to increase the limits to $1 million/$1 million/$1 million is 1.1 percent of premium in most states.

Employer liability limits can be confusing, and every policyholder is different, so consult with your agent if you have questions about your specific situation.

This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.