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Risk in Context

With Students Ruled Employees, Workers’ Compensation Costs Could Increase

Posted by Jean Demchak September 01, 2016

Private colleges and universities must now consider some graduate students to be employees, according to a recent ruling by the National Labor Relations Board (NLRB). That could mean higher workers’ compensation and other costs, and warrants a review of risk management strategies.

The Ruling

On August 23, the NLRB ruled that graduate students — such as research and teaching assistants — who are compensated for work they perform at the direction of their schools  are employees under the National Labor Relations Act of 1935. The decision stemmed from a group of graduate students that petitioned to join a union related to their work at Columbia University and The New School in New York City.

The NLRB’s ruling applies to all private colleges and universities across the US. Public colleges and universities are exempt as they do not fall under the jurisdiction of the NLRB, but are subject to state labor laws. In some states, working graduate students at public universities and colleges are already considered employees.

The ruling specifically addresses the right to unionize, but it also confers other rights. Notably, it means that working graduate students can collect workers’ compensation benefits for on-the-job injuries and illnesses. They are also subject to state and federal laws requiring employers to provide safe workplaces.

Payroll Information

Colleges and universities will need to update the information they provide to insurers about payroll, which is the basis for workers’ compensation premium calculations. It includes the number of working students and their pay rates. Remuneration to students could include salaries, stipends, and/or housing subsidies.

With the payroll expansion, schools should be prepared for an increase in workers’ compensation premiums. The increased payroll will impact affected schools’ next insurance renewals — and may also be picked up at audit of the payroll for your current term.

Safety Training

Schools should also ensure that working students receive the same safety training as other employees. Many schools already provide such training to students; for them, the ruling will not require a major change in their approach to workplace safety.

Colleges and universities that do not already provide this training should focus on:

  • Reporting of occupational injuries, including the right of employees to do so without retaliation.
  • General campus safety rules.
  • Emergency preparedness.
  • Workplace violence preparedness.
  • Office ergonomics.

For students involved in research, additional training should reflect their unique workplace hazards — for example, tools and equipment, chemical hygiene and material hazards, and biosafety.

Next Steps

Working with their risk and insurance advisors, affected schools should conduct a thorough review of the ruling’s potential impact, including commercial insurance coverage and employee benefits. And they should ensure that they are providing accurate payroll information to their insurers and effective safety training to working graduate students.

Jean Demchak