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Is lump-sum workers’ compensation good for Maryland employees?

| Jul 20, 2012 | Workers' Compensation

Workers in the state of Maryland may want to ask themselves a question: If you were injured and received workers’ compensation, would you be encouraged to return to work if you received your payment in one lump sum, or would it deter you?

According to a report by the Workers Compensation Research Institute, lump sums for workers’ compensation claims are encouraging to employees and help them get in the mindset of wanting to return to work after an injury occurs.

A public policy analyst for WCRI said he believes the findings will give a heads-up to state lawmakers about what could be beneficial to their workforce. Understanding employee response to the lump sum compensation is an important step in the process, he added.

The WCRI performed a study following cases with more than 2,100 employees from Michigan who received lump sums after suffering injuries at work during the year 2004. The report looked into the workers’ status of employment for four years and found interesting results.

About 19 percent of those 2,100 who received the lump sum while not working found employment. About 30 percent of workers who received the lump sum while employed chose to leave their job. The largest percentage, approximately 78 percent, had no change in employment status, however. The report also said it was the older employees who were more often unemployed after receiving the compensation.

It appears the debate still stands, with compensation being handed out in lump sums. Though the workers in the study were from Michigan, the same issue relates to employees in Maryland and throughout the United States and could spark change nationwide. What form of compensation would work best for you?

Source: Business Insurance, “Lump-sum settlements encourage employees to return to work: WCRI,” Roberto Ceniceras, July 11, 2012

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