Employers pay the largest share of the economic costs associated with
disability. Studies
show employers pay 35% of the total with
workers and families incurring 27% of the
financial cost. Some
details of this economic burden include:
-
The average Canadian missed 7.2 days of work in 2001 (Statistics
Canada 2002
Labour Force Historical Review).
-
Direct and indirect costs of disabled workers displaced from the
workplace in BC
total $3.6 billion a year and are projected to
climb. About 5% of all disabling
conditions in BC result in
long-term disability and an extended or permanent period
of work
disruption. Assuming similar rates of disability across Canada, the
total cost
of disability in Canada would equal $36 billion (NIDMAR,
1997).
-
The indirect costs of disability include: decreased productivity while
at work
(presenteeism), loss of productivity related to employee
absences, salaries of
replacement workers plus the cost related to
training and workflow disruption,
overtime, decrease in customer
satisfaction, medical, legal and investigation expenses
(Watson
Wyatt, Staying at Work, 2002/2003).
-
A study of three Canadian pulp and paper mills undertaken by
PricewaterhouseCoopers found that the direct and indirect costs
associated with
disability-related absences contributed $4.50 to
$7.25 to the total cost of producing
each tonne of paper (NIDMAR,
2000).
-
Watson Wyatt, in its survey of Canadian employers in 2000, found that
direct
disability and absence costs are 7.1 percent of payroll.
While costs of workers'
compensation declined slightly, short-term
absence costs had doubled in the period
between 1997 and 2000. The
authors attributed part of this increase as a side effect of better
management of workers' compensation claims.
-
The indirect cost of work absence was approximately 10.2% of payroll
(Watson
Wyatt, 2000). Of that amount, 6.2% related to the cost of
overtime and replacement
workers; 4% was attributable to loss of
productivity.
-
Small employers (employing fewer than 200 employees) report higher
direct
disability and absence costs as a percentage of payroll than
medium (201 to 999
employees) or large organizations (more than
1000 employees.) For these small
organizations, the direct cost of
disability was 7.8 % of payroll (Watson Wyatt,
2000).
-
Decreased productivity while still at work is especially associated
with mental health
and substance abuse-related issues. In addition,
these conditions may be associated
with higher accident and injury
rates.
-
Physical and mental disabilities are now the leading source of
complaints to the New
Brunswick Human Rights Commission (2002). In
2000/2001, 34% of the grievances
to the HRC came from people who
contended they were discriminated against on the
basis of their
physical or mental disability. Even those grievances that are
dismissed
are costly to employers due to the cost of legal
assistance and gathering information
to present to the commission.
