The Cost of Worker Injuries
Workplace injuries, illnesses, and death have far-reaching impacts to individuals’ lives. In addition to the consequences for the individual, and their family, the company for which they work will be negatively impacted. It has been estimated that employers pay almost $1 billion per week for direct workers’ compensation costs alone.
In addition to workers’ compensation costs, other direct costs to companies for workplace safety violations include medical expenses, and costs for legal services. The list of potential indirect costs for employers is much longer.
Indirect costs for workplace injuries include wages paid to injured workers for absences not covered by workers’ compensation and wage costs related to time lost through work stoppage associated with the worker injury. Employers may be required to pay overtime costs due to the injury, in addition to the administrative time spent by supervisors, safety personnel, and clerical workers after an injury. If an employee is unable to continue working, costs are incurred from training a replacement worker.
OSHA fines and any associated legal action can be extremely costly to employers. Lost productivity related to work rescheduling, new employee learning curves, and accommodation of injured employees can affect the company over an extended period of time; as well as loss of good will and profit from bad publicity.
The best way to mitigate these losses is to prevent workplace injuries. A Safety and Health Management Plan created specifically for your workplace will allow you to assess hazards, remove them if possible or, if not, develop safety procedures to decrease the potential for injury.
For a look at how your company could be affected by a worker injury, try out OSHA’s Safety Pays Program. This online tool allows employers to assess the impact of occupational injuries and illnesses on their profitability. The program uses the company’s profit margin, the average costs of an injury or illness, and an indirect cost multiplier to project the amount of sales a company would need in order to cover those costs.
Posted on: May 16, 2017