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Safety Incentive Plans – OSHA’s New Posture


OSHA’s Surprising New Posture On Safety Incentive Plans

This article on safety incentive plans was written by our ept Safety Consultant Glen Dulac.

Always remember that a well-crafted safety incentive plan will bring dramatic results in moving your safety program from good  to great.  Studies show as much as a three to one return on investment, from a good incentive plan.

Graphic of Safety Incentive Plans Dollars

So, what kind of a tempest in a teapot has OSHA been brewing up to spoil your incentive plan?

Https://www.osha.gov/recordkeeping/finalrule_faq.html   OSHA slipped it into the record-keeping rules, you can find it in the frequently asked questions.

And what does it say?

“ The rule does not prohibit incentive programs. However, EMPLOYERS must not create incentive programs that deter or discourage an employee from reporting an injury or illness.  Incentive programs should encourage safe work practices and promote worker participation in safety-related activities.”

Please notice I fully capitalized EMPLOYERS.  Hold  that thought or read the last sentence of this article now.  Let’s boil this down to key tangibles.

Incentive plans are not outlawed, but the wrong kind could get you fined by the OSHA guys.  Never discriminate, all employees deserve equal pay, and an incentive is considered pay or compensation.  Focus on activity standards, AKA leading indicators.

Examples would be:

  • Participating on a safety inspection team
  • Keeping ones work area clean, or
  • Attending safety training.

Downplay big ticket monetary rewards given for reductions in accident frequency or reduction in experience modification.

Businessman Safety Incentive Plans Holding Sacks Of Money

In closing let me stress the following, OSHA has no scientific foundation for its position that monetary incentives lead to underreporting of injuries.  There has been no major court case on this topic.  Issues on incentives have been published as memos not as final rules.

State OSHA may differ from Federal OSHA.  Any discussions about the delicate details of your incentive plan should be discussed in the presence of an attorney, so they will fall under the client-attorney privilege.  This makes it very difficult for the OSHA octopus to get its tentacles on said communication.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
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