Safety and OSHA News

Workers’ comp insurer opposes OSHA position on safety incentive programs

A provider of workers’ compensation insurance is challenging OSHA’s assertion that safety incentive programs that reward low injury rates discourage employees from reporting when they’re hurt on the job. 

Great American Insurance Co., the parent of Strategic Comp insurance, questioned the conventional wisdom on safety incentive programs in its comments on OSHA’s draft Safety and Health Management Guidelines.

The company says a core element of Strategic Comp’s insurance programs for developing and maintaining effective safety cultures is the use of incentive programs with cash prizes for not having a lost workday injury during a set period of time.

Strategic Comp says this is a “critical tool” and a “catalyst” in jump-starting safety culture change.

OSHA’s draft document reiterates a position it included in a 2012 memo that these types of safety incentive programs should be discouraged, something that hasn’t previously appeared in the Safety and Health Management Guidelines.

OSHA has pointed to programs where all workers get a bonus, a pizza lunch or a steak dinner when there are no reported injuries as the type of program that needs to be avoided.

Strategic Comp’s program doesn’t award a bonus or prize to all employees. As summarized in its comments on the OSHA proposal:

“Under the Incentive Programs commonly implemented by Strategic Comp’s insureds, employees are assigned to groups of approximately 75 to 100 for purposes of program participation. If no employee in the group has experienced a lost workday case during the relevant period (typically a month), all members of that group qualify to participate in a random drawing for the cash reward, which is generally split among multiple winners. If a member of the group experiences a lost workday case during the relevant period, no member of the group qualifies for the random drawing.”

The company says the relatively low dollar value of the award and relatively low probability of winning via the drawing reduce the incentive’s significance to a level where disqualification from the drawing it trivial.

Strategic Comp questions whether OSHA has ever successfully proven its assertion that these types of safety incentive programs create peer pressure on employees to hide their workplace injuries so everyone can benefit from the award or bonus.

The company goes even further to question the conventional wisdom that workplace injuries are, in general, significantly under-reported.

A study recently published in the American Journal of Industrial Medicine says only 70% of workers’ comp claims in Washington state are properly reported to the U.S. Bureau of Labor Statistics for its annual Survey of Occupational Injuries and Illnesses.

Has your company changed the way it handles safety incentive programs since OSHA has stated in recent years that it’s against them? Let us know in the comments.

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  1. […] Safety News Alert recently published an article looking at the disagreement regarding whether safety incentive programs offering bonuses to all workers are a good thing or a bad thing. In the article, a workers’ compensation insurer disputed past claims about problems with these programs and argued they could make a good centerpiece of a safety campaign. The workers’ comp insurer claimed the incentives were typically too low to cause employees not to make reports of injuries when injuries occurred, but instead that the incentives just worked the way they should to encourage employees to be more careful on-the-job. […]

  2. […] to Safety News Alert, up to 70 percent of workplace injuries go unreported. When a worker doesn’t report an injury […]

  3. […] compensation claim. Unfortunately, despite the importance of reporting workplace injuries, Safety News Alert reports one study showed only around 70 percent of workplace injuries are properly reported. […]

  4. […] requires no days off from any workers due to injury? The answer to this question is in dispute. Safety News Alert reports one workers’ compensation insurer says the programs are a key part of successful […]

  5. […] compensation claim. Unfortunately, despite the importance of reporting workplace injuries, Safety News Alert reports one study showed only around 70 percent of workplace injuries are properly […]

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