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Ask the Experts: What are ‘incident rates’ and how are they calculated?

You may not be familiar with the concept of an incident rate because, unlike most employers, special districts are not required to report workplace injuries and fatalities to OSHA. The incident rate is a benchmark created by OSHA to illustrate the number of injuries reported by a given employer.

Since we have workers’ compensation claims data, we are able to adapt the OSHA methodology to calculate the incident rate for members of our workers’ compensation program.

Why does it matter to us?

Some employers have trouble doing business because their incident rate is greater than the industry average. A high incident rate often reveals a poor safety management record. Consider this: every day, more than 12 workers die on the job, and more than 4.1 million workers are injured on the job each year.1

As an employer, maintaining a safe workplace for your employees is always critical. While special districts are not subject to OSHA regulations, the incident rate serves as one indicator of a district’s workplace safety.

How is the incident rate calculated?

It is calculated by multiplying the number of recordable claims by 200,000, and then dividing that number by the number of employee hours worked.

A recordable claim is any that requires medical treatment above first aid. This could be prescription medication or days away from work. A claim that does not incur any expenses are not included in the calculation. The number of employee hours worked is the total working hours from all employees in a given year. For Pool members, this includes covered volunteers.

Let’s say your district had one recordable claim in 2017, and the total number of hours worked from all employees is 50,000 in the same year. Based on the formula, your incident rate is 4.0 (1 X 200,000 / 50,000 = 4.0).

How do we interpret a given incident rate? Is it good or bad?

Because the formula is engineered to use 200,000 working hours—equivalent to 100 employees—as the basis for comparison, a 4.0 incident rate means that for every 100 employees, four employees were injured. In general, a lower rate implies a safer workplace.

According to OSHA, the average incident rate for all private industries in 2016 was 2.9.2 This means that for every 100 employees 2.9 employees had a recordable incident. The average incident rate for the entire CSD Pool in 2017 is 8.86. This means that the average for the entire CSD Pool is roughly three times the national average.

Will the incident rate have an impact on our workers’ compensation rates?

Like with any sort of coverage or insurance, your history of workplace injuries will have an impact on the cost. Your incident rate is an indicator of that.

There are a large number of factors that go into creating workers’ compensation rates. All those factors aside, a higher incident rate would push rates up.

What can we do to improve our incident rate?

It is alarming that even though the most dangerous OSHA categories don’t exist in the Pool, our incident rate is so much higher than average. That should give every member pause.

Is there something missing in your safety program? Develop a plan to reduce your incidents while building your safety culture. Recent studies indicate that for every $1 a company spends on workplace safety, they saved at least $2.3 This is why we started the Safety Grant program. The grant program was designed to double the power of your safety spending. But think beyond that, about how those expenditures offer rewards later as well.

You have numerous resources to help promote safety at no cost to you. This includes a booklet which reduces workers’ compensation costs. If you would like a free copy, reach out to us at csdpool@mcgriff.com for more information.

Sources:

  1. https://www.osha.gov/dsg/InjuryIllnessPreventionProgramsWhitePaper.html
  2. https://www.bls.gov/news.release/pdf/osh.pdf
  3. http://www.asse.org/assets/1/7/F2_Huangetal_0409.pdf
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