MAN » Topics » U.S. Workers Compensation

These excerpts taken from the MAN 10-K filed Feb 25, 2008.

U.S. Workers’ Compensation

In the U.S., we are self-insured in most states for workers’ compensation claims for our contingent workers. We determine the proper reserve balance using an actuarial valuation, which considers our historical payment experience and current employee demographics. Our reserve for such claims as of December 31, 2007 and 2006 was $81.2 million and $99.3 million, respectively. Workers’ compensation expense is recorded as a component of Cost of Services.

There are two main factors that impact workers’ compensation expense: the number of claims and the cost per claim. The number of claims is driven by the volume of hours worked, the business mix which reflects the type of work performed (for example, office and professional work have fewer claims than industrial work), and the safety of the environment where the work is performed. The cost per claim is driven primarily by the severity of the injury, related medical costs and lost-time wage costs. A 10% change in the number of claims or cost per claim would impact workers’ compensation expense in the U.S. by approximately $3.5 million.

Historically, we have not had significant changes in our assumptions used in calculating our reserve balance or significant adjustments to our reserve level. During 2007, we saw a decline in workers’ compensation expense, primarily as a result of the decline in the business, changes in business mix and our continued focus on safety, which includes training of contingent workers and client site reviews. In addition, we saw favorable development in relation to regulatory changes, improved claim handling and claim disclosure. Given current claims experience and cost per claim, we do not expect a significant change in our workers’ compensation reserve in the near term.

U.S. Workers’ Compensation

In the U.S., we are self-insured in most states for workers’ compensation claims for our contingent workers. We determine the proper reserve
balance using an actuarial valuation, which considers our historical payment experience and current employee demographics. Our reserve for such claims as of December 31, 2007 and 2006 was $81.2 million and $99.3 million, respectively.
Workers’ compensation expense is recorded as a component of Cost of Services.

There are two main factors that impact workers’ compensation
expense: the number of claims and the cost per claim. The number of claims is driven by the volume of hours worked, the business mix which reflects the type of work performed (for example, office and professional work have fewer claims than
industrial work), and the safety of the environment where the work is performed. The cost per claim is driven primarily by the severity of the injury, related medical costs and lost-time wage costs. A 10% change in the number of claims or cost per
claim would impact workers’ compensation expense in the U.S. by approximately $3.5 million.

Historically, we have not had significant changes in our
assumptions used in calculating our reserve balance or significant adjustments to our reserve level. During 2007, we saw a decline in workers’ compensation expense, primarily as a result of the decline in the business, changes in business mix
and our continued focus on safety, which includes training of contingent workers and client site reviews. In addition, we saw favorable development in relation to regulatory changes, improved claim handling and claim disclosure. Given current claims
experience and cost per claim, we do not expect a significant change in our workers’ compensation reserve in the near term.

This excerpt taken from the MAN 10-K filed Feb 28, 2007.

U.S. Workers’ Compensation

In the U.S., we are self-insured in most states for workers’ compensation claims for our temporary employees. We determine the proper reserve balance using an actuarial valuation, which considers our historical payment experience and current employee demographics. Our reserve for such claims as of December 31, 2006 and 2005 was $99.3 million and $106.5 million, respectively. Workers’ compensation expense is recorded as a component of Cost of Services.

There are two main factors that impact workers’ compensation expense: the number of claims and the cost per claim. The number of claims is driven by the volume of hours worked, the business mix which reflects the type of work performed (for example, office and professional work have fewer claims than industrial work), and the safety of the environment where the work is performed. The cost per claim is driven primarily by the severity of the injury, related medical costs and lost-time wage costs. A 10% change in the number of claims or cost per claim would impact workers’ compensation expense in the U.S. by approximately $4.0 million.

Historically, we have not had significant changes in our assumptions used in calculating our reserve balance or significant adjustments to our reserve level. During 2006, we saw a decline in workers’ compensation expense, primarily as a result of changes in business mix and an increased focus on safety, which included increased training of temporary workers and customer site reviews. Given current claims experience and cost per claim, we do not expect a significant change in our workers’ compensation reserve in the near term.

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