The health and safety of workers are the top priority of every smart employer. On-the-job injuries can pose a serious threat to businesses, forcing them to endure significant impacts, including hefty fines and even lawsuits. However, is there any definitive way to ensure zero workplace incidents? Certainly not. To this end, a robust workers' compensation program serves as a vital tool for employers, reducing their risk of being sued by employees for work-related injuries and safeguarding their business from crippling financial loss. The program also helps employees, enabling them to avail no-fault benefits and coverage for medical assistance, ongoing care, and lost wages.
Unfortunately, understanding the nitty-gritty of workers' compensation programs can be incredibly challenging, especially for businesses in California—a state known for its highly fragmented workers' compensation system. The increasing number of fraudulent claims and exorbitant litigation expenses contribute to the burden. Although a worker injured in California doesn't benefit any more than a worker in Arizona, Nevada, or Oregon, the cost for the employer to buy the insurance in California is 300-500 percent higher. For instance, the manual rate for workers' compensation class code 6504, which applies to food manufacturing businesses, is around 14 percent of payroll in California. In contrast, it is only about 3 percent in Arizona, Nevada, or Oregon. Even if a claim is denied, employers will likely see an upsurge in their monthly premium value. Moreover, there are counties in California where the litigation rates are as high as 40 to 50 percent of lost time claims.
This is where Folsom-based Samuel Hale comes to the rescue. Samuel Hale delivers an exclusive and cost-effective workers' compensation program with alternative dispute resolution (ADR) claims administration, which helps California businesses secure significant savings on monthly workers' compensation premiums, resolve disputes quickly, and more. ADR programs are designed to ensure expeditious and equitable settlements between injured workers and their employers and provide them with tangible benefits that cannot be delivered by traditional methods involving court systems. "Samuel Hale was founded to defy the unfairness of the California Workers' Compensation system," says Michael DiManno, CEO and Founder of Samuel Hale.
The Beginning Chapters
The California Labor Code has a certain provision that allows businesses to settle disputes by using an ADR program instead of litigating them with the Workers' Compensation Appeals Board (WCAB), thereby making it easy to combat fraud. However, to date, only select few companies (mostly municipal and the Fortune 500 companies) are authorized to leverage ADR as it is not only difficult to qualify for the approval but it also requires a company to have a long-term perspective on workers' compensation. Realizing that ADR allows employers to achieve massive cost savings, DiManno and his team decided to pursue this code and build a company around it—the idea that led to the inception of Samuel Hale. "The state has empowered us with a kevlar vest against litigation and we pass it on to our clients with our 'co-employment style' business solution, whereby we can share the benefit of the labor code through our employment and staffing solutions," says DiManno.
The high cost of litigation and the friction that it causes are the primary reasons why California is considered the most expensive state for workers' compensation insurance coverage. Eliminating that "litigation venue" by using ADR was the founding principle of Samuel Hale. "We are more like a bionic company—we took the best options in the marketplace for managing labor costs and engineered the company to optimize what was already available," shares DiManno. The company also provides robust protection against excessive litigation on employment-related liabilities.
A Unique Blend of Workers' Compensation and HR Administration
Samuel Hale primarily serves light industrial businesses and employers with high employee turnover. "Most of our customers come through insurance brokers and other value-added resources when they run out of answers to effectively settle employee-initiated litigation disputes," informs DiManno. To this end, Samuel Hale has developed The Patriot employer solution, approved by the California Department of Workers' Compensation in a carve-out agreement, to deliver workers' compensation insurance with ADR. The company delivers it through a "co-employment style" business solution combined with a proven program that reduces workers' compensation claims cost by over 50 percent. The solution is designed to streamline the claims process, reduce high ex-mod (experience modification) rates, and deliver enormous savings on workers' compensation coverage. "After clients sign up with us, workers' compensation, which was once a strategic challenge to them, becomes as simple as buying copy paper from Staples," quips DiManno.
Through a trade association agreement—The PACT—Samuel Hale binds employees to the ADR process and delivers incredible benefits, including complimentary minimum essential coverage (MEC) Plan, and access to major medical healthcare options, voluntary benefits, and accidental death and dismemberment (AD&D) insurance plan. As such, The PACT Pension Plan allows employers to deliver a better financial future for their employees, who become fully vested in the pension after two years of employment. The pension plan also acts as an excellent recruitment and retention tool for employers. In fact, if a company terminates The PACT agreement, their employees can always join another company that has collaborated with Samuel Hale and continue enjoying the same benefits. "One of the things that is unique about us is we have developed a collective bargain agreement, which doesn't include the typical union provisions. As a result, we are not restricted to only workers' compensation ADR program. We have similar provisions for labor violations such as harassment, discrimination, and more," notes DiManno.
ADR streamlines claims resolution and delivers better claim outcomes as opposed to traditional dispute resolution means. "Typically when an insurance carrier gets a letter from the attorney, it goes to the WCAB, which is known for slow, inconsistent rulings. WCAB has its own court system and does not answer to another court. Here, Samuel Hale offers a strategic advantage—our insurance carrier sends a letter to the WCAB informing that Samuel Hale is a part of the carve-out," explains DiManno. As the WCAB has no jurisdiction over Samuel Hale's disputes, the case is transferred to the company's own court system headed by an ombudsman—a retired worker's compensation judge with over 20 years of experience on the bench. The ombudsman calls every injured employee and explains the program. At any point, any of the parties (the employee or the employer) can proceed to the stage of mediation or even binding arbitration. In its five-year exemplary performance history, Samuel Hale has had no case subject to binding arbitration, and only a couple of them escalated to mediation. DiManno attributes this accomplishment to their meticulous and quick dispute resolution, which allows everybody to voice their opinions openly. With the company's unique way of resolving disputes, every customer has achieved phenomenal results—a steep increase in employee satisfaction rates, enormous cost savings, and faster claims settlement. "Employers spend over 50 percent of the claims dollars as frictional costs while resolving disputes in the court. We make way for massive cost savings—our single greatest differentiator," remarks DiManno.
The success of a landscaping and property maintenance business perfectly demonstrates the robust capabilities of Samuel Hale. The client had incurred substantial losses and was on the verge of going out of business. Samuel Hale stepped in and turned things around for the client by cutting costs significantly. Within two years, the client was able to stabilize his business and double its size, which was not possible in 40 years of his experience. That's not all; the client is now expanding his business and growing aggressively through multiple acquisitions.
Steadfast Commitment to Excellence
Backed by a team of experts in technology, insurance, and employment, Samuel Hale manages a total of about 10,000 employees today. The company has developed a sound culture adhering to the principles of working hard, pursuing the truth, and doing the right thing. In fact, Samuel Hale was one of the fastest-growing companies in last year's Inc. 5000 list, with a whopping growth rate of 391 percent.
Steering ahead, Samuel Hale is pivoting to an innovative, unconventional business model to expand the reach of its solution. To put things in perspective, DiManno explains, "Let's say we make a portfolio sale to just one private equity company that owns a chain of bakeries." It would allow the client to have massive savings on workers' compensation and related issues. Besides, Samuel Hale aims to support temporary employees, variable and gig workers with better pay flexibility by working out a plan where once they sign The PACT, they are entitled to the same benefits no matter where they work. The company is also building recruiting centers to help onboard employees, ensure they understand the benefits, and provide free training in different fields. Additionally, the company is planning to include a medical facility in the recruiting center so that employees who are members of The PACT can not only get treated for work-related injuries but also use it for primary care at no copay.
About Samuel Hale
As a California workers' compensation Employer Carve-out Organization (ECO), SAMUEL HALE, LLC enables frictionless employment by shielding California employers from high and unpredictable employment costs due to fraud and litigation in workers' compensation claims. Created in 2016, the company is dedicated to eliminating fraud and unnecessary litigation in work comp claims and reducing clients' insurance premiums. Thanks to the effectiveness of its program, Samuel Hale revenues grew by 593% between 2018 and 2021. Visit https://www.samuelhale.com/ for more information.
California League Of Food Producers