OSHA Updates Program That Helps Show Employers How Injuries, Illnesses Affect Profitability

Published March 8, 2017

​OSHA has added the most recent workers’ compensation data to its $afety Pays Program, which is intended to raise awareness of and help employers understand how occupational injuries and illnesses can affect companies’ profitability. Using a company’s profit margin, the average cost of an injury or illness, and an indirect cost multiplier, OSHA’s program projects the amount of sales needed to cover the cost of a particular injury. $afety Pays prompts users to pick an injury type from a drop-down list or enter their workers’ compensation costs, then enter information such as profit margin and number of injuries to perform the analysis.

The program estimates direct costs of an accident as well as indirect costs, including items like overtime costs necessitated by the injury; training costs for a replacement worker; administrative time spent by supervisors, safety personnel, and others after an injury; wage costs associated with time lost due to work stoppage; and more. Possible indirect costs not included in estimates by $afety Pays are third-party liability and legal costs, worker pain and suffering, the costs of OSHA fines, and loss of good will from bad publicity.

The most recent average claim cost estimates were provided by the National Council on Compensation Insurance (NCCI), which manages the largest database of U.S. workers’ compensation insurance information. The new data reflects the average cost of lost time workers’ compensation insurance claims from policy years 2011–2013.