Featured Article

The True Costs of OSHA Compliance and Employee Safety

By Gary Finch
Editor

Chances are, even if you do not use a written safety program prepared by a professional safety consultant, you still spend more on compliance and safety than you think you spend. The following items are compliance and safety related:

1. Waste Disposal Fees
2. Fire Extinguishers
3. Exit Markers and Signage
4. Personal Protective Equipment
5. Quick Drench Shower and Emergency Eye Wash Station
6. Training Employees (initial training and annual renewal training)
7. Training Materials
8. Administration (documenting the training and other areas)
9. Hepatitis B Vaccinations
10. Safe Sharps
11. Meeting Electric and Building Codes

While these expenses are considerable, they contain an important omission. Employers also have to bear the costs for occupational injuries incurred by their employees. Sometimes this is hidden through workers compensation and other insurance, but it is still a cost. The insurance company is a middle man in this instance. They may spread your costs out over several years, but in the end, it is employers who pay for on-the-job injuries.

Most employers do not realize what injury costs are. All they know is that their insurance fees go up every year. Medical costs are rising over fifteen percent a year. Beyond that, the employer loses productivity when an employee is injured and cannot work. The National Safety Council tracks injury costs on virtually every kind of occupational injury. Their figures include medical treatment, indemnity, and loss of productivity. The average cost per claim in 2001-2002 (latest figures) was $15,8651¹.

The following details the “Average Total Cost per Claim by Nature of Injury”.

1. Carpal Tunnel $17,202
2. Laceration/Puncture/Wound $13,521
3. Sprain/Strains $14,097

Additional data shows the “Average Total Cost per Claim by Cause of Injury for 2001-2002”.

1. Burn $11,339
2. Fall/Slip $18,838
3. Motor Vehicle $27,558

This next list details the “Average Total Incurred Cost per Claim by Part of Body 2001-2002”.

1. Ankle $10,358
2. Foot/Toe $9,588
3. Hand/Finger/Wrist $10,243
4. Lower Back $17,738

This last list details the “Frequency of Injuries by Part of Body 2001-2002”.

1. Eye 2.9 percent
2. Back 24.0 percent
3. Finger 5.8 percent

A complete list of all the above is included in The ALERT newsletter, 2nd Quarter of 2005.

These figures show injury costs are a significant factor to an employer. Therefore, we can add two more items to the initial list of compliance costs:

1. Workers Compensation Insurance
2. Loss Productivity (when employee misses work due to an injury)

What emerges when you plug in these figures to your own operation, is that you already spend a lot of money on compliance related and injury prevention areas. The problem is, you can have all of these items, and it still has not prepared you for an OSHA inspection. Thus, to reach final figure, we need to add the costs for a consultant to develop and maintain your written programs, or you can add potential OSHA fines if you do not tie everything together in a written employee accident and injury prevention program. Take your choice.

I submit, and OSHA backs me up on this, that a well written employee safety program more than pays for itself. Employees are more aware of safety policies and occupational injuries are reduced. And there is less chance of the employer being fined by OSHA. It sends a message to employees that the employer cares about their safety. In addition, federal law mandates that every private employer develop and maintain a written safety program that is complete with all the required items.

Is the cost of a safety professional a valid reason for an employer to forego the development of an employee safety program? OSHA says it is not. These figures back them up.

¹All figures provided by National Safety Council.