Workplace Safety

Create a safety culture within your organization. Let every employee know safety is the number one employee benefit. The top executive takes the lead and mentions some safety news in every company meeting. Simply talking and promoting safety is time, it does not cost a great deal of money.

Some specifics:

Drivers must use seat belts, must be sober and drug free, not use cell phones or text while driving, and not pick up unauthorized passengers. At least semi-annually, drug test every driver and check their driving records. Randomly test one quarter of the drivers every three months. Establish a threshold for tickets and accidents, and stick to that standard. These minimum safety standards cost about as much as a tank of gas in a pick-up.

Supply personal safety protective equipment for employees. Although this requirement comes from OSHA regulations, it’s a great investment too. One eye wash at the local doc in the box costs about as much as a hundred pairs of safety glasses.

Harnesses to tie off workers at heights cost little next to broken bones and death from a fall.

Hard hats are about fifteen to twenty dollars each. Closing a head wound runs about five thousand.

Reflective vests or coveralls, again, cost much less than a man versus loader collision.

Now, suppose you could save five percent of your workers’ compensation premium for the next three years from reduced experience mod or lower premium rates. You can afford to make the investment in safety equipment.

Consider an incentive program like this: quarterly bonus for no injuries and perfect prompt attendance. Perhaps pay everyone who meets those criteria an extra fifty cents per hour for the quarter. This extra pay amounts to about one hundred dollars per month. Wouldn’t it be worth everyone earning it? Or, maybe one quarter the earners get a pair of Red Wing boots, a gift card to their favorite tool store, a gift card oriented towards their spouses, a flat screen television or use your imagination.

Small investments in safety awareness and loss prevention do pay large dividends in reduced losses.

Insurance companies offer loss sensitive pricing plans for risk tolerant clients. In the most fundamental case, the client pays a standard premium, and receives a dividend or return premium based on losses.

More sophisticated pricing plans are available for clients willing to assume more risk. Retrospective rating plans (retros) provide an incentive for companies with excellent internal loss control processes.

Retros begin with a basic premium. This portion of the overall premium reflects the fixed cost of the program. The insurer charges administrative costs, some premium tax, loss control services, sales commissions, and underwriting costs in this premium. Basic premium is about twenty-five percent of the standard premium.

Added to the basic premium are the reserved losses multiplied by a loss conversion factor – usually about 1.15 – which includes claims and legal expenses. Total retro premium is basic plus converted reserved losses, with two other factors.

Retros generally have a minimum and maximum premium. Higher minimums and maximums allow less long-term risk transfer to the insurance company. The companies will reward this decision with lower basic premium, lower loss conversion factor, or better cash flow options.

Lower minimums and maximums will cost the insured in higher basic premiums, loss conversion factors or cash flow.

So how does a consumer use this information?

Do not consider a retro program unless your premium is at least two hundred thousand dollars.

The best time to enter a retro is after a bad claims year when your modification rises and will remain up for three years. A retro allows you to recapture some of that higher premium. But you must have losses under control.

Many retro plans are based on reserved losses. A reserved loss is an estimate of costs to be paid over the life of the claim. This number is not discounted. The company sets the reserves based on claims history. This number can obviously adversely affect the final premium without the insurance company actually paying a claim out.

Retro audits resolve this issue by resetting claims reserves annually and recalculating premium accordingly. So, expect three annual audits to reset the premium. It’s a long-term partnership between the insurer and the insured.

Forecast your own losses for the next three years. Decide what retro factors work in your favor – can you risk a higher maximum premium? Negotiate with the insurer about paid loss accounting rather than reserved losses, especially on medical only claims.

Negotiate a deductible on medical only claims to avoid the loss conversion factor add-on.

The self-insured program is the ultimate retro. You act as your own insurance company. Know your premiums will be above one million dollars per year for the foreseeable future before considering this funding method.

You will still encounter some fixed fees, like actuarial work, taxes, filing fees, and administrative costs. It still costs legal and investigation time to handle claims. The biggest advantage is cash flow on claims. Since you control reserves, you control cash flow.

The biggest disadvantage is when you decide to stop self-insuring and purchase insurance commercially. Be certain you will self-insure for a very long time.

Technology associated with construction has dramatically changed operations. Carefully check the class codes and their descriptions to assure proper premiums.

Years ago, 5606 – contractor supervisors – served to describe on site personnel who actively performed construction activities while managing the site. The rate was equivalent to site carpenters. That code has evolved into the computer carrying, service providing construction managers and executives who document the construction process. The rate is closer to outside sales representatives now.

Even excavation and site work is being dramatically changed by GPS technology. Now computers design a cut and fill pattern with efficiency. Labor is more involved in checking the geotechnical and environmental properties of the soils rather than the actual movement of them.

As production technology improves, new sub-codes develop to reflect the decrease in risk. Painting, carpentry, electrician and other trades now use a selection of eight or ten separate codes to describe exact activities. More components are built in shops and brought to the site. This process can change the class code of the installers and the builders.

The trend is towards more computer driven operations. Less labor, more specialists. As this trend continues, class codes will be added, deleted and the descriptions changed. There are currently over seven hundred class codes. Some are antiquated with new meanings – like a ship chandler is now a hardware store.

It pays to become familiar with the classifications. If your business has been active for many years, the “governing code” may be incorrect. The governing code is the catch-all for your business which best describes the overall operation, more obvious in manufacturing. Corrugated box manufacturing has been reorganized into several class codes. Technology has separated the manufacture of cardboard and corrugated cardboard into laminating processes, cutting and folding processes, and fully integrated operations.

Read your relevant class codes and think about which one reflects your operations. Or ask your agent to do it for you.

Workers’ compensation requires an end of the policy year audit to assure proper premium is charged. This process protects both the insured and insurers.

Think through this process to make it easier, and cost saving. First, choose a policy year that creates an easy audit. The calendar year works for many companies. You already must report payrolls to the US government, the paperwork is essentially done. Calendar quarters work for the same reason.

If you prefer to use your corporate tax year, go ahead. If you complete quarterly profit and loss, you can use a financial quarter. But choose an annual period which already has an audit trail.

Keep payroll records separate for each workers’ compensation classification. Normally, this record keeping is straightforward. The same people specialize in certain tasks: clerical, sales, labor, or drivers.

Some operations can be more complex. If labor crosses from one specialty to another, perhaps a carpenter helps pour a concrete slab, that payroll should be split on an hourly rate. The higher rate applies otherwise.

Demand any subcontractor, for example a hood cleaning crew for a restaurant, provide a Certificate of Insurance (COI). Technically, insurance companies can charge for the payroll portion of any contracted work in the absence of a COI.

If you use to a non-covered contractor, keep those records to properly assign a discount for premium.

Lastly, keep records to isolate overtime pay. Overtime payroll receives a discount for premium purposes.

Make audits easier. Choose a convenient policy period. Keep records for independent contractors with COIs, and payments to those without. Isolate overtime pay. Segregate individual payroll by classification if that individual works in multiple job descriptions.

Your premium will be more accurate with a minimal additional management effort. And, the default position is always to increase payroll, and therefore, premium.

Are slips, trips, and falls on the job a serious problem? According to the Bureau of Labor Statistics (BLS) slips and falls account for about two hundred thousand injuries with 600 deaths each year. They are a serious problem.

About half of all on the job injuries are due to either overexertion or falls, each at about twenty five percent according to Liberty Mutual. Slips and falls can occur anywhere:

* Liquid spills, like oil or water
* Icy walkways
* Staircases
* Uneven sidewalks and paving
* Steelworkers or roofers
* Tripping on an unsecured area rug
* Changing a light bulb on a step ladder
* Carrying a load with blocked vision

Notice the first four causes involve improper maintenance, the next is improper personal protection equipment, and the last three can be avoided by proper techniques learned through training.

Falls from elevated working platforms are ten percent of all accidents (included in the twenty five for falls). Roofers shingling a house or steel workers wear harnesses and tie off to a stable anchor. The leash diminishes the impact of the fall.

If you need a step ladder to change a light bulb, have a buddy stabilize the ladder. Don’t use the wheeled desk chair.

Walk around your work space. Are the floors level or do trip ledges exist? How about the parking lot? Potholes, cracks, uneven pavement? Sidewalks: any heaving? Are there any dark corners or hallways? Ample landings on stairs?

Are any storage areas or hallways crowded? Extension cords under rugs or across walkways? Eliminate all extension cords, they’re nothing but trouble waiting to happen.

Train your people on proper ladder techniques. Be vigilant regarding proper use of personal protection equipment like harnesses, hard hats and safety eyewear.

Use proper transfer techniques to avoid spills, but clean spills immediately, do your maintenance and housekeeping and ask your insurance company safety professional for ideas and educational training tools.

Employers liability fills gaps in the workers’ compensation standard coverage. For example, suppose an employee is injured due to a defective piece of equipment that their employer manufactured. The employee has a products liability claim, but is also collecting under workers’ compensation. Employers liability coverage steps in and covers the employees products claim in excess of the workers’ compensation payout.

Another extension of workers’ compensation through employers’ liability concerns the families of workers. If a worker transports a toxin or a pathogen back home on their clothing or themselves and exposes their family, employers liability pays the medical bills.

This scenario is little known and rarely claimed, however, for more than just monetary reasons, it’s good to control this potential exposure.

The first step requires reviewing any material safety data sheets (MSDS) for chemicals and supplies that may be transportable by simple contact to clothes, through respiration or on skin or hair.

Can any of these products cause allergic reactions or are they known for anaphylaxis reactions?

Step two: if any pathway is possible, contain that product to your work space.

Step three is to set up work zones, decontamination zones and clean areas for employees to enter, dress and store personal items, and clean-up after work. Use a buddy system to be sure all potentially affected areas are decontaminated properly and completely.

Unfortunately, you cannot control the health of all the people your employees contact, or even their families. Some common cleaners and relatively benign chemicals can cause serious distress in sensitive people.

Employers liability has historically been a rare claim; however, as more people suffer allergies, reactions to chemicals, or just gain knowledge of their personal environment, these claims promise to become more frequent.

Controlling these exposures now will reduce future costs. There are virtually no statutes of limitations for claims. Besides, you don’t want to make kids sick, and they are the most sensitive to low doses.

Proper lifting technique begins with proper delivery and storage. Plan incoming deliveries when enough labor is available to assist without straining. According to Liberty Mutual’s five year study, overexertion is the number one cause of on the job injuries. We can manage and do better.

Check supplies in, and then put them where they belong. By storing materials quickly, hallways, loading docks, and work areas stay uncrowded. And, employees know where to store and find supplies.

Muscle pulls can occur with relatively light weights. To reduce the frequency of these pulls, try to organize storage so a minimum of reaching high or bending low is required, especially with heavier objects.

Store twenty pound objects at waist height. Any object weighing more than twenty pounds should be stored where hand trucks can be used to move the objects. Do not store objects higher than five feet. People should not reach over their heads to retrieve an object. Reaching risks dropping a load on the employees head.

Sounds like you need more storage space? First, try disposing of all that top shelf long-term stuff. Everyone in business has a certain amount of clutter that accumulates over the years. It’s similar to the attack or garage. Space tends to fill up with stuff. Clean it out. Psychologically, it will make you feel leaner as a company.

Do not overcrowd storage areas. Overcrowding promotes two bad hazards. Trips and falls occur more frequently in overstuffed storage areas. Unusual twisting and bending of the torso occurs more frequently in disorganized or overcrowded storage.

Design and designate storage space so adequate supplies or materials can be on hand without employees needing to twist, turn, strain or trip and fall to get them. Organized, safe storage promotes more professionalism. People tend to maintain inventory as they find it. Safety is the result of proper planning and implementation of storage management.

You don’t think of safety as an employee benefit? Reconsider it.

Health insurance provides medical care in the event of disease or injury off the job. Workers’ compensation covers post injury and illness medical costs on the job. Short-term and long-term disability reacts to injury or illness off the job.

Employers now add gym memberships and preventative medicine as benefits.

Why not preventative measures for on the job injuries as a benefit? Get your employees home safe after each shift. Great benefit for their families and themselves.

How do you institute a safety policy as a benefit?

1. Make a corporate-wide decision that safety is a core ethic. Top management must embrace and lead the effort.

2. Safety meetings do not require time wasting. Create brief topics, under five minutes, that can be incorporated in every shift meeting. For example, proper use of protective eyewear – leave it on, or how to fit a hard hat.

3. Reducing the number of injuries on the job is a cost savings. Having a well known safety record, or more important a safety ethic, helps attract the best professional employees. Just as a wellness benefit attracts quality help, a safety record or effort invites serious workers to apply.

4. Reducing the severity of claims, think protective eyewear, saves the company a fortune. Consider that insurance companies view injury frequency as more vital than injury severity in predicting costs. Safety awareness decreases frequency, proper equipment and techniques decrease severity. Invest wisely in safety.

5. Communicate the human value of safety to your employees. Tell them how much money you spend on safety every year. In fact if you are not doing so, communicate to each employee how much all their benefits cost you. How much is their hidden paycheck.

Safety is the number one benefit you can offer. Believe it to your core and live it

Nearly all state workers compensation laws provide for rehabilitation programs that help injured workers return to productive employment. However, the terms of these laws vary significantly.

Some states require occupational therapy and re-training. After completing rehab, workers are considered ready for work, although the employer is not required to find another job for them and they won’t necessarily return to productive employment.

In other “defined-benefit” states, rehabilitation is a minor part of the law. The worker is paid for temporary total disability. However, if this disability is defined as a percentage of physical loss, the employer can make a lump-sum payment and close the case, whether or not the worker can return to work.

A third group of states has adopted a “loss of earning power” system that seems to be effective in getting workers back on the job. Once workers are injured, their workers compensation benefits will continue for life unless they’ve fully regained their earning power. For example, Pennsylvania requires that at the time of injury an employer must offer the injured employee a job if one is available within his or her physical restrictions. If this isn’t possible, a rehabilitation program begins, which includes finding positions that the worker is physically able to perform.

Your goal should be to return your injured workers to productive lives as soon as possible after an injury. You’ll benefit from better production, the state and federal government gain from lower long-term costs generated by workers compensation injuries — and your employees will enjoy the dignity of working, along with their earnings.

What’s not to like?

A clean, neat, and orderly workplace contributes to the health and safety of employees, improves their morale – and can grow your business!

To help the cause, make sure that employees follow these housekeeping guidelines:

• Keep floors spotless. Clean up spills promptly to prevent slipping accidents and sweep up or vacuum dust or metal fragments that could cause respiratory problems, if inhaled.
• Eliminate clutter. A pile of oily rags left outside a properly closed container can easily ignite a blaze. Get rid of cartons, discarded parts machinery, or general debris that could block exit routes and doors. To prevent slips and trips, dispose of these items promptly in the appropriate waste containers.
• Make sure workstations are kept neat. They should be cleared of everything not involved in the immediate project to keep a heavy tool or object from dropping off a workbench onto a worker’s foot.
• Keep storage areas and cabinets clean and orderly. If workers “tidy up” their stations by sweeping a jumble of tools, materials, and unfinished products into bins, the result might look neat – but it’s neither orderly, nor safe. Separate substances subject to dangerous interactions, and arrange materials so they won’t fall off shelves, creating a tripping or injury hazard.
• Put items in their proper places out as soon as they’re no longer in use. Supervisors need to make this behavior automatic in all employees by instruction, setting an example, and enforcement.

Clean and pleasant surroundings help maintain morale among workers, while impressing visitors and customers. What’s more, if the condition of your workplace creates an image of pride and efficiency, it can help garner more business, which helps both you and your employees.

For more information, feel free to get in touch with us.