R&R Insurance Blog

Fred Hosier from Safetynewsalert.com posted an article that I feel is important for employers in Wisconsin to be aware of - I do also recommend taking a look at his website as he has some very good safety knowledge to offer.

If a company fails to provide safety training required by federal law to 11 employees, can the employer be fined just once or 11 times?

A federal court says the government can fine the company 11 times.

The decision comes in the case of employer Erik Ho. He hired 11 workers to renovate a building containing asbestos.

The Occupational Safety and Health Administration (OSHA) found Ho failed to train them about asbestos removal or provide them with respirators, two violations of federal safety regulations.

OSHA issued 22 citations to Ho. On appeal, the Occupational Safety and Health Review Commission, an independent appeals board, found that the existing regulations didn’t allow OSHA to issue 22 separate citations. Instead, Ho faced just two fines.

In response, OSHA changed its regulations in late 2008 to allow for per-employee fines for lack of safety training and personal protective equipment.

That regulation was challenged by the National Association of Home Builders and other groups. They argued that OSHA had no authority to specify whether citations could be issued on a per-employee basis.

Now a federal court has ruled that OSHA is allowed to make such changes to federal workplace safety regulations.

What does that mean for employers? The maximum OSHA fine for one serious violation is $70,000. Multiply that fine by 11 employees, and it becomes $770,000.

Cite: National Association of Home Builders v. OSHA, U.S. Court of Appeals, District of Columbia Circuit, No. 09-1053, 4/16/10.

R&R Insurance's Resource Center has put together a 2009 vs. 2010 class code rate comparison detailing the percentage increase or decrease.

Class code rates are determined by the amount of dollars spent on work-related injuries in a particular class code (typically by insurance carriers) which are then reported to the WCRB. All companies in Wisconsin contribute to the rate change of a particular class code. Therefore, if you and other businesses with the same class codes had a good safety record over the past few years, you all benefit by receiving a decreased class code rate per $100 of payroll. You can see that change in a class code like 3082 - Steel Foundries - Almost a $4 decrease per $100 of payroll.

We often comment that you can't control the rates in WI - they are what they are, and the only things that change the price of your work comp premium is the experience mod, and the workers compensation dividend (which have been ultra-aggressive this year). But, as an industry, you do impact the overall rate based on your individual performance and contribution to the "whole."

One more thought..
The WCRB sets the premium rate for each class with the approval of the Commissioner of Insurance. If you feel that your business is not properly classified or the premium charge is not proper, you can appeal to the WCRB for review of your situation. If you are still not satisfied with the WCRB’s decision, you may request, in writing, that the Commissioner of Insurance hold a hearing to review the WCRB’s decision.

“Jamie, on behalf of New Berlin Grading, Inc., thank you for the service you and R&R Insurance have given our account. Through your professional and personal attention to our needs and challenges we have been able to lower our EMR from a .99 to a .65. We attribute this success to the direct efforts of you and the resource team.”

Dennis Schmit
New Berlin Grading, Inc.

Like many young companies in the construction industry Squared Away Builders, Inc. concentrated on working hard, staying busy and taking care of their customers. This left little or no time to manage other things like workman’s compensation insurance premiums. In the case of Squared Away, learning how to manage workers compensation insurance was one key to lowering costs, making the company more safe and enabling the company to become proactive instead of reactive when it came to workman’s comp.

A feeling of helplessness…
“When it came to work comp there was an inherent feeling of helplessness” says Brett Wittig, President of Squared Away Builders, Inc. “As a small business you try to do the best you can managing your employees while managing your business for profit at the same time and when the WC premium rolled around it felt like a slap in the face. We had been working hard all year, concentrating on the basics of running a business and it felt like we were helpless and couldn’t do anything about this large premium.”

We didn’t know what was coming…

“After our third year in business, we knew our modifier was 1.71 but we had no idea where this number came from, how it was determined or how it affected our premiums directly. We did know however after three years of large premiums that we had to do something to lower our costs if we wanted to stay competitive.”

The search for knowledge…
“Frustrated about work comp but still trying to concentrate on making a profit and taking care of our employees Bill Katzfey caught our attention. His philosophy of creating a knowledge based culture change in our organization in order to help manage work comp costs was something that Squared Away needed. What’s more important was that Bill was able to give us the knowledge, specifically in regards to the construction industry, which we needed as a company in order to make that culture change. R&R Insurance Services has given us and continues to give us a solid understanding of what it truly costs to have an injured worker”, states Dan Wittig, Operations Manager.

The difference it has made…
“We have had the program we designed with the knowledge and techniques provided by R&R for three years now and we finally are seeing the benefits. We have used the premium savings to invest in our employees and in the future of our company. There is no doubt in my mind that we would not be in the position we are in today without the help and knowledge of R&R Insurance Services has provided us.”

“Since 2001 we have been applying the concepts that R&R teaches in their WC seminar. It took a lot of hard work, consistent communication of a solid message and a little patience.”

Brett & Dan Wittig
Squared Away Builders

“The insurance team at R&R insurance helped me to put in place a safety program that will reduce my Workers’ Comp premium by $30,000 in the coming policy year. R&R tracks our claims and their accuracy. They found additional savings of $14,000 this policy year… R&R Insurance is a necessary tool for Merit Asphalt Inc.”

Bob Pederson
Merit Asphalt, Inc.

"R&R Insurance Services has provided insurance coverage to us for many years. Brad Stehno and Nancy McMurry are both knowledgeable and professional. They have been very helpful in updating our Safety Program and providing help with our Safety Meetings. We have implemented a return-to-work program with their help and have seen the results of employees returning to work sooner and lowering Workman’s Compensation costs. Our Experience Modification has also continued to go down since we have been with R&R. We appreciate their availability when we have questions or concerns. Working with Brad and Nancy has been a great experience.”

Larry Schlueter
D.F. Tomasini

The Occupational Safety and Health Administration (OSHA) has rolled out its new program, the Severe Violator Enforcement Program (SVEP) to identify employers with repeated, serious citations, and intend to subject them to increased, multi-worksite inspections and higher penalties.

According to OSHA, the SVEP will “focus increased enforcement attention on significant hazards and violations” by concentrating on employers that have demonstrated “indifference” to workplace safety obligations through willful, repeated, or failure-to abate-violations in four areas:

1. Fatality or catastrophe situations;
2. Industries that expose employee to the most severe hazards–among the “high-emphasis hazards” covered by the SVEP are falls, amputations, crystalline silica combustible dust, lead, and excavation and trenching;
3. Industries that expose employees to the potential release of highly hazardous chemicals;
4. Egregious enforcement actions.

Once an employer is selected for the SVEP, OSHA will undertake a number of enforcement steps including enhanced follow-up inspections, as well as inspections at other worksites of that same employer—potentially on a nationwide basis. The program includes new features that will allow OSHA to conduct more aggressive multi-worksite inspections against those employers that fall within the program, as well as a nationwide referral program and closer coordination with states having OSHA state plans.

"Higher penalties and more aggressive, targeted enforcement will provide a greater deterrent and further encourage these employers to furnish safe and healthy workplaces for their employees," said DR. David Michaels, OSHA Assistant Secretary of Labor.

In addition, the agency will be increasing civil penalty amounts under SVEP. OSHA said that companies can expect average penalty for a serious violation to increase from about $1,000 to an average $3,000 to $4,000. Future penalty increases would also be tied to inflation.

"Better to be safe than sorry." This is normally a good philosophy to live by. But when it comes to filling out your company OSHA 300 log, this is one time where that rule can cost you.

Unfortunately, many of the people assigned to fill out the OSHA 300 log on behalf of their company haven't been the beneficiaries of any formal training. The OSHA log may have been thrown on their desk and because of that, they operate by the philosophy that if I send it into workers' compensation, then I'm going to also put it on the OSHA 300 log. This can result in over recording and inflated incident and severity rates - which could have serious consequences for your business!

The incident rate and severity rate (or DART rate) are two formulas that OSHA uses to measure workplace safety. Safety professionals will use these numbers as a benchmarking tool to compare accident rates for companies nationwide in the same industry – regardless of company size. These rates are an equalizer of companies of all different sizes because it's based on total hours worked in the company.

Incident rates are determined by taking the number of OSHA recordables (taken from the 300 log at the end of the year) multiplied by 200,000 divided by the total number of hours worked in your company - both by employees and temporary employees.

The DART Rate, which is an acronym for Days Away or Restricted Time, is a measure of accident severity. It counts the number of cases in the calendar year in which a company had an employee away from work due to an injury or who was working under restrictions due to a work injury.

Knowing the above information, let's take a look at a real-world example of a company who was operating with the "better safe than sorry" mentality and how it could have affected their chance to bid on a new piece of business.

CASE STUDY:

We received a phone call from a painting contractor who needed our help because they had to calculate their incident rate in order to bid on a job - it was a requirement of the bid.

In looking at their OSHA 300 log, this painting contractor had 8 incidents recorded in the calendar year. The problem was that they had only worked 90,000 hours that year. Using the formula explained above, we calculated their incident rate at 17.8. This rate was 4 times the national average for painting contractors. For companies or general contractors looking to hire this painter, this is a serious red flag and could likely be a deciding factor in determining if they get the work.

Based on years of experience, our first thought was that they didn't complete the OSHA 300 log properly.

We sat down with this contractor and went through each of the 8 cases on their OSHA log in detail. It turns out that in 3 of those 8 cases, the people never even went to the doctor - which means it shouldn't be on the 300 log. We also noticed a few other inaccuracies. So, when finished, there were only 2 legitimate injuries that should have been entered on the OSHA 300 log. We made the necessary corrections and recalculated their incident rate to be a legitimate 4.44 - which compares very well with the national average of 4.0 for painting contractors.

This new incident rate is something a potential customer or general contractor would feel much more comfortable with, as opposed to the incident rate of 17.8, which would be alarming.

If you're over reporting on your OSHA 300 log, your company can end up with excessively high frequency and severity rates, which can draw the wrong kind of attention. Typically, if OSHA sees a company with a high incident rate, they would be concerned that the company is not controlling the work place. They, along with potential customers, see it as an out-of-control injury situation.

Do you know if your OSHA 300 log is filled out correctly? Are you over recording? What you don't know could be costing you.

Contact us today to set up an appointment and learn how our risk management and loss control experts can help you. If you're interested in learning more about the OSHA 300 log, consider attending one of our OSHA 300 Webinars.

There is often confusion over the similarities between the policy for Pension and Welfare Fund Fiduciary Responsibility Insurance and the Employee Benefits Liability (EBL) endorsement for the Commercial General Liability Coverage portion. Although some coverage duplication exists in the area of administrative errors and omissions, the thrust of the two forms is different.

The EBL endorsement was designed primarily to provide coverage for administrative errors and omissions for a large variety of benefit plans. The Fiduciary policy form was designed to cover ERISA (Employee Retirement Income Security Act) exposures of fiduciaries for specifically designated plans to the extent that they are caused by a “wrongful act”. Fiduciary Liability vs. Employee Benefits Liability Tip Sheet.

The OSHA 300 log, formally known as the "Log of Work-Related Injuries and Illnesses", is used to classify work-related injuries and illnesses and to note the extent and severity of each case. The log itself is really a listing of employee injuries, and any contract or temporary employee injuries that happened during that calendar year. So, if you have temps working for you and they are injured at your work place, you are required to put that on your OSHA 300 Log.

The OSHA log differs from workers' compensation loss runs in that the OSHA log goes on a calendar year basis. Your work comp policy may go from July 1st to July 1st, but the OSHA log is always on a calendar-year basis.

If everybody has Workers' Compensation Loss Runs why do we have to do OSHA record keeping?

The short answer: Because OSHA says so.

The long answer: OSHA wanted a consistent way to track and measure injury rates throughout the country for various industries - the OSHA log allows them to do that. OSHA wants to capture the injury data from all the different companies in the U.S. They don't simply rely on workers' compensation records because workers' compensation laws vary from state to state and there can be differences in the individual laws - what's considered an injury, how much is paid, etc. But, with OSHA record keeping, it's supposed to be consistent from state to state across America. This is important because it allows OSHA to look at a company in Georgia and very directly compare it to a company in California, as far as injury rates are concerned.

What must be put on the OSHA 300 log?

Cases must be logged on the OSHA 300 Log if:

• There is a death
• Days away from work
• Job transfer or restriction
• Loss of consciousness
• Other recordable case

Most of these are easy to make a determination on. The one that is open for a lot of debate is the "other recordable case." We can tell you from experience, that if a company is skimping or putting too much on their OSHA 300 log, most of the time it's due to the "other recordable case" and how a company decides to interpret some of those standards that OSHA has set for this category.

It's important to know which companies are required to fill out the OSHA 300 log, what you should be putting on your log and why putting too much on your log can really hurt you. We will discuss all of these issues in upcoming blog posts. Be sure to check back frequently, or subscribe to our RSS Feed to automatically be updated on when new articles are published.

OSHA 300 Log Free Webinar:

December 14, 2010
January 20, 2011