State Wage Subsidy Brings Injured Workers Back to Work – Center for Retirement Research

Oregon is one of the few states that encourages employers to find ways to help injured workers return to work sooner.

The government pays large subsidies to employers to accommodate their injuries or to provide them with other jobs until they recover. The allowances, funded through payroll tax, are equal to half of the injured workers’ wages for up to 66 working days.

The system works very well, new research has found. Workers in factories that regularly participated in the program were significantly more likely to be employed a year after their injury, and earned more each quarter than injured workers in factories that did not participate regularly or did not use the program. .

Oregon’s subsidies lead to “significant increases in employment and wages year after year,” the researchers said.

He said the workers are able to go back because the policy maintains their employment. The risk for people who miss work for long periods of time due to injury is that they may have difficulty returning to their jobs. The purpose of the Oregon program is to cover some of the employer’s costs of physical or other replacements so that injured workers can resume work effectively. If they are no longer able to do the job that caused the injury, the grant covers the cost of training the workers to find a new position they can do.

Researchers demonstrated the effectiveness of the subsidy by looking at injured workers’ employment and wages after the state reduced the subsidy in January 2013 from 50 percent of workers’ wages to 45 percent. Although the 50 percent subsidy was reinstated a few years ago, the temporary cuts gave them a window to gauge the subsidy’s impact on whether employers are accepting their injured workers and returning them to work.

The program does more than cover the employer’s costs in the short term, the researchers concluded. “It can also serve as an investment for people in the long run.”

Reading this learn by Naoki Aizawa, Corina Mommaerts, and Stephanie Rennane, see “Residentiality After Disability: Labor Market Implications of Social Insurance.”

The research reported here is derived in whole or in part from research activities conducted pursuant to a grant from the US Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium. The opinions and conclusions expressed are solely those of the authors and do not necessarily represent the views or policy of SSA, any federal government agency, or Boston College. Neither the United States government nor any of its agencies, nor any of its employees, makes any warranty, express or implied, or assumes any legal responsibility or liability for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any particular commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not imply endorsement, recommendation or favor by the United States Government or any agency thereof.