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Safety Incident Cost Awareness

Workers Compensation Law Discussion

Safety Incident Cost Awareness

Postby Cedrych » Mon Nov 28, 2016 11:22 am

How do I make employees aware of the financial cost of the safety incidents that occur at our company.
Posts: 37
Joined: Fri Feb 14, 2014 1:22 pm

Safety Incident Cost Awareness

Postby Bleidd » Mon Nov 28, 2016 9:50 pm

:  There are several methods to do this.  I prefer a simple, basic approach.  I assume that someone furnishes you with your workers’ compensation claims costs.  How much per incident.  This is a good source of the basic costs since it can be identified to the dollar, for both paid and reserved costs.  Several notes; if this data(direct costs) is to be shared all traces of employees names, numbers, etc. must be removed.  This must be done in such a matter as to protect employee identity or the great gods of human resources shall visit you and you won’t like that.  Another issue to avoid is the fact that claims costs change as claims mature and close.  Some have a final cost more than that originally calculated and some have less.  Unless you like recalculating the figures on a monthly basis – a real drag – it is recommended you pick a date and use the cost as of that date.  (For example, the claims cost as of 30 days or 60 days from the date of the incident.  It might be necessary to adjust for an extraordinary situation(such as a delayed fatality) but keep it as simple as you can.)  Next you need to develop a ratio of claims costs to total accident costs.  There are a number of places you can find this figure – trade associations, government agencies or the National Safety Council.  We generally used a factor of ten(this covers all the “hidden” costs such as time to investigate, damage to facilities and product, supervisors time, etc.)  From that it was possible to calculate total accident costs and with the number of hours worked gave an accident cost per hour.  I found this was very effective with both management and the employees.

Example:  Plant A incurs $62,550.00 in compensation costs for 2007.  A review of similar facilities indicates that the total(indirect) cost of accidents is 6.25 times the compensation(direct) costs.  The plant had 135 employees(each who works 2,000 hours each per year) during the time.  Thus the accident costs are calculated as –

(62,550.00 x 6.25) divided by(135 x 2000) =  approximately $ 1.45 per hour

I am attaching links to two publications from the State of Oregon OSHA web site – they should serve to give you a good overview of accident costs and may contain other material of interest.http://www.cbs.state.or.us/external/osha/pdf/workshops/107oh.pdfhttp://www.cbs.state.or.us/external/osha/pdf/workshops/100oh.pdf

This can be a very complicated topic- please keep it simple or you can become so bogged down in the calculations that the possible good will be lost.  I hope this help you headed in the right direction.

Michael Brown, CSP Retired
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Joined: Fri Jan 03, 2014 12:18 pm

Safety Incident Cost Awareness

Postby Mervin » Tue Nov 29, 2016 6:01 pm

How do I make employees aware of the financial cost of the safety incidents that occur at our company.
Posts: 38
Joined: Mon Jan 06, 2014 2:08 pm

Safety Incident Cost Awareness

Postby Charlton » Wed Nov 30, 2016 4:25 am

Subject: Safety Incident Cost Awareness

:  How do I make employees aware of the financial cost of the safety incidents that occur at our company.
Posts: 31
Joined: Sun Feb 02, 2014 10:05 am

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