OSHA, gearing up for a proposed rulemaking on I2P2, is presenting its case to employers and the public.
"Injury and illness prevention programs (I2P2) are good for workers, good for business, and good for America." OSHA administrator David Michaels made this statement in support of a plan that would require employers to develop written safety programs based on a common set of elements. In its most recent regulatory update, OSHA said it anticipates a notice of proposed rulemaking on I2P2s by September 2014.
The cost of worker injuries is staggering, and OSHA believes an approach to workplace safety with I2P2s at the center can save money. The agency estimates that implementing I2P2s will reduce injuries by 15 to 35 percent for employers that do not currently have programs. At 15 percent, that would translate to a savings of $9 billion per year in workers’ compensation costs. A 35 percent reduction would yield a savings of $23 billion annually.
OSHA points to data from Liberty Mutual Research Institute, which reports the financial impact of the most disabling workplace injuries in a recent year at $53 billion. In addition to the direct costs, employers face a variety of indirect costs.
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Indirect costs of workplace injuries and illness include:
- Wages paid to injured workers for absences not covered by workers’ comp
- Wage costs related to time lost through work stoppage
- Administrative time spent by supervisors following injuries
- Employee training and replacement costs
- Lost productivity related to new employee learning curves and accommodation of injured employees
- Replacement costs of damaged material, machinery, and property
Other costs include those related to occupational illnesses that may not surface for years or decades following exposure.
OSHA offers evidence that I2P2 programs reduce injuries and save money. For example:
- Alaska had an I2P2 requirement for over 20 years. Five years after the program was implemented, the state saw a 17.4 percent decrease in injuries and illnesses.
- A Colorado program lets companies adopt basic prevention components in return for a reduction in workers’ compensation premium. The annual decline in accidents was 23 percent, and the reduction in accident costs was about 60 percent.
- Washington State began requiring establishments to have I2P2s in 1973. Five years later, the net decline in injuries and illnesses was 9.4 percent.
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Such savings are not just for large organizations or employers. Participants in SHARP, an OSHA voluntary program for small employers with elements similar to those for I2P2, showed impressive results. One study found that the average number of workers’ compensation claims for SHARP employers decreased by 52 percent, and the average claim cost dropped by 80 percent.