Making sure a workplace is meeting safety standards can be expensive, but a good safety program can save $4 to $6 for every $1 invested. By using this calculator from the OSHA website, one can estimate costs associated with workplace injuries and see just how much more revenue is needed to cover costs. When using this calculator, it’s important to realize that the extent to which the employer pays the direct costs depends on the nature of the employer’s workers’ compensation insurance policy, but the employer always pays the indirect costs. For example, if an employee were to sprain something, the direct cost would be approximately $28,866, whereas the indirect cost would be approximately $31,752. The employer would have to pay the indirect cost, and depending on their insurance policy, part or all of the direct cost. The estimates include the following kinds of indirect costs:
- Any wages paid to injured workers for absences not covered by workers’ compensation;
- The wage costs related to time lost through work stoppage associated with the worker injury;
- The overtime costs necessitated by the injury;
- Administrative time spent by supervisors, safety personnel, and clerical workers after an injury;
- Training costs for a replacement worker;
- Lost productivity related to work rescheduling, new employee learning curves, and accommodation of injured employees; and
- Clean-up, repair, and replacement costs of damaged material, machinery, and property.
Some of the possible kinds of indirect costs not included in these estimates are:
- The costs of OSHA fines and any associated legal action;
- Third-party liability and legal costs;
- Worker pain and suffering; and
- Loss of good will from bad publicity.
To cover these costs, a company would need to make an additional $1,058,420 to cover just the indirect cost when the sprain could have been avoided with an effective safety and health program.
To create an effective safety and health program, a company must do the following:
- Comply with OSHA rules
- Create a plan that focuses on the workplace hazards
- Train employees
- Everyone has to work at safety and health
An effective safety and health program will reduce employee injuries, which in turn saves the company money, and increases productivity and employee morale. R.V. Evans Company can give you the assistance you need to make your workplace safer by providing real value added solutions. Our professional team will help develop a plan for your company to make sure your packaging and fastening processes are ergonomically sound. For more information on how R.V. Evans Company can help you, read the article “Ergonomics and How We Can Help.”
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