1. Base rewards on safe behaviors: Your safety-incentive program should be behavior-based, rather than injury-rate-based. In practice, this means providing incentives for workers to practice safe operating procedures and protocols, rather than rewarding them for not reporting accidents. Moreover, creating a culture of reporting near misses, hazardous behavior and situations that could lead to accidents should be a point of focus because it helps prevent future accidents and injuries from occurring. (Shutterstock)
2. Provide meaningful, non-monetary rewards: Consider rewarding employees based on their safe behaviors with non-financial items or programs: offer points or safety bucks that can be "cashed out" for extra vacation days, team lunches, casual dress days, etc. Recognition, in the form of certificates, safety pins and/or safety leaderboards might also be effective. Acknowledge employees for a variety of safety activities, such as providing their suggestions for improving daily operating procedures, guiding a coworker or new hire on performing a task safely, identifying a hazard, or participating in safety committees. Monetary rewards are still permissible for safety programs — provided they are not based on "reporting an incident" (e.g., you might offer employees a paid vacation if they earn a certain amount of safety bucks from performing safe operating behaviors and/or improving safety protocol). (Shutterstock)
3. Give clear instructions: Safety-incentive programs should be specific and not limited to the reporting of an incident. For example, "no injuries reported" is not an acceptable safety-incentive program as it motivates and encourages employees not to report injuries. "Acting safely" also doesn't work, as it leaves employees unclear as to what needs to be done on their part to qualify for a reward. Your company's qualifying metrics/procedures should be robust and clear, outlining how you want your employee's to behave and how you want them to perform the key elements of their job. Here are some common examples: wear a hardhat while at jobsites; when driving, do not follow other vehicles too closely; use all required personal protection equipment; and have three points of contact when getting in and out of a truck. (Photo: Shuttestock)
4. Incentivize and discipline all employees equally: Employees violating a company safety procedure should be disciplined identiically, whether or not an incident occurred as a result of the violation. Your goal should be to discipline/applaud employees for their behaviors/actions consistently companywide, and treat the resulting incidents (or lack thereof) as simply a byproduct. (iStock)
5. Lead by example, but also allow others to lead: Whenever possible, find ways to demonstrate to your employees that you care about and are dedicated to their safety. Establish safety as a core value of your company, emphasize its value by requiring managers and supervisors to engage with, actively observe, and remind employees that all injuries are preventable and a "zero incidents" report is attainable through each person's dedication to safety. Additionally, allow employees to set safety goals for themselves. This will motivate them to develop their own commitments to safety and actively work towards achieving a safer workplace. (Photo: iStock)

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Keeping workers’ compensation claims to a minimum and with low payouts — in terms of both frequency and severity — are key to small to medium-sized businesses maintaining cost-effective insurance premiums. A low claim rate helps keep your workers’ compensation experience modification rate at or under the 1.00 target you need to be able to operate your business without restriction. It can also help with recruitment and retention of employees.

Keeping up with OSHA

To stay on track with their respective workers’ compensation experience modification rates, most companies create workplace safety-incentive programs. At the end of a quarter, they review their incident records and reward those who did not report a claim. This act of rewarding the outcome versus the behavior has historically been standard practice but is no longer compliant with OSHA guidelines.

According to the Occupational Safety and Health Administration (OSHA), “Section 11(c) of the OSH Act prohibits an employer from discriminating against an employee because the employee reports an injury or illness. Reporting a work-related injury or illness is a core employee right, and retaliating against a worker for reporting an injury or illness is illegal discrimination under section 11(c).”

A later memorandum states, “If OSHA determines that an employer withheld a benefit from an employee simply because the employee reported a work-related injury or illness without regard to the circumstances surrounding the injury or illness, OSHA may issue a citation under section 1904.35(b)(1)(iv).”

Related: OSHA’s asbestos regulations and litigation: What insurers should know

The bottom line

As you review your workplace safety-incentive program, put yourself in the shoes of an employee working for your company. Does your safety plan incentivize them to become more safety-focused or to be afraid of the repercussions of reporting an incident or injury? If the answer is the latter, adopting these suggestions can help turbo-charge your safety program, minimize incidents, and keep you OSHA compliant. If you need to refocus your efforts to better implement these tips, a partner well-versed in designing and implementing workplace safety-incentive plans can be invaluable in helping you create a safety incentive program that’s right for your business.

With this in mind, here are five ways you can make your safety-incentive program compliant and more effective.

Related: People, places and things: The future of workers’ compensation

Steven J. Billings is a risk advisor at Relation Insurance Services. He can be reached at steven.billings@relationinsurance.com

Michael Williams is a loss consultant at Relation Insurance Services. He can be reached at michael.williams@relationinsurance.com

Travis Vance is a partner at Fisher & Phillips LLP. He can be reached at tvance@fisherphillips.com