Drug-Free Workplace Policies Don’t Necessarily Equate to Fewer Injuries, NCCI Reports

Nancy Grover

Boca Raton, FL (WorkersCompensation.com) – A new NCCI study seems to fly in the face of what many workers’ compensation stakeholders have believed for years: that efforts to stem illegal drug use are associated with fewer workplace injuries. Past research touted by anti-drug advocates has indicated that to be the case. But findings from NCCI suggest that is not necessarily true.

“Overall, in the states reviewed, claim frequencies by state and year for WC policies receiving [drug free workplace] credits are not lower than for non-DFWP policies. There are classes that have lower DFWP claim frequencies in some states, but there is no apparent consistent pattern from year to year,” the study concludes.

The increased legalization of marijuana for medical and/or recreational use has raised questions about the implications for the workers’ compensation system. There are also continuing concerns about whether other illegal drugs impair workers to the point that they are susceptible to accidents and injuries.

To look at the issue closely, researchers Chun Shyong, Barry Lipton, and John Robertson reviewed results for six states that provide premium credits to employers with DRWP programs for policy years 2009-2016 –Florida, Georgia, Arizona, Tennessee, South Carolina and Virginia. They compared the lost-time claim frequency for workers’ compensation policies with and without DFWP premium credits. They found:

  • In the NCCI states reviewed, policies with DFWP credits did not have lower claim frequency than comparable policies without DFWP credits
  • There is no clear pattern at the class code level for the relative frequency of claims for policies with and without drugfree credits

“From year to year, DFWP claim frequencies in any of the states reviewed are not persistently higher than non-DFWP claim frequencies. There are lower DFWP claim frequencies in one or more years in each state,” the report says. “For example, Florida’s DFWP claim frequencies are lower than non-DFWP claim frequencies in Policy Years 2013, 2014, and 2016… For five of the eight years shown, DFWP claim frequency is higher than non-DFWP claim frequency.”

The authors point to several reasons that employers would want a DFWP credit to see if that may “shed some light on the issue.” Among them are

1) The policyholder is safety-minded and is doing it to promote safety in the workplace. This is the scenario that leads to expectations of lower frequency—an employer focused on safety instituting loss prevention.

2) The policyholder is price-sensitive and is aware that they could get a premium credit for having a program. In this case, once the credit is received, the immediate goal is achieved.

3) The policyholder is having poor loss experience, and the insurer is the one requesting that the employer qualify for a DFWP credit. If this happens often, the group with the DFWP credits is a biased sample of insureds, with worse experience than average before the consideration of the DFWP program. A program could still be effective, but not so effective as to overcome the original frequency disadvantage.

4) Similarly, insureds with good loss experience may already be as drug-free as those with the credit. The original assumption is that those with a program have workers on the job that are less impaired than those without a program, but that may not be the case.

“Given this wide range of possible underlying motivations, it is hard to generalize about the efficacy of these programs. And there are differences in the administration of DFWP statutes across states,” the study says. “For example, drug testing prior to employment may not be as effective as a DFWP that uses ongoing regular/intermittent testing. A likely explanation could be somewhere in the middle—effective in some cases, not effective in others.”

The recent legalization of marijuana in some states may have led some employers to relax testing requirements or enforcement “especially when, for example, they may have employees across multiple states with differing laws on permissible marijuana use, or where an employer may not be permitted to terminate or take adverse action against an employee who is an authorized medical marijuana user,” the report states.

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