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OSHA requirements are set by statute, standards and regulations. Our interpretation letters explain these requirements and how they apply to particular circumstances, but they cannot create additional employer obligations. This letter constitutes OSHA's interpretation of the requirements discussed. Note that our enforcement guidance may be affected by changes to OSHA rules. Also, from time to time we update our guidance in response to new information. To keep apprised of such developments, you can consult OSHA's website at http://www.osha.gov.
August 23, 2016
Big Sky Industrial
9711 W Euclid Road
Spokane, WA 99224
Dear Ms. Shulund:
Thank you for your letter to the Occupational Safety and Health Administration (OSHA) regarding 29 CFR Part 1904 - Recording and Reporting Occupational Injuries and Illnesses.
In your letter, you state there is a bias against smaller employers in the formula used by OSHA to calculate incidence rates of occupational injuries and illness, and you ask if there is a different benchmark for smaller companies to use so that you can be fairly compared and scored.
Incidence rates can be used to show the relative level of injuries and illnesses among different industries, firms, or operations within a single firm. Because a common base and a specific period of time are involved, these rates can help determine both problem areas and progress in preventing work-related injuries and illnesses. An incidence rate of injuries and illnesses may be computed from the following formula: (Number of injuries and illnesses X 200,000) / Employee hours worked = Incidence rate. The 200,000 figure in the formula represents the number of hours 100 employees working 40 hours per week, 50 weeks per year would work, and provides the standard base for calculating incidence rate for an entire year.
A single injury or illness has a much greater effect on incidence rates in small establishments than on larger establishments. Any analysis must take this into account. Incidence rates take on more meaning for an employer when the injury and illness experience of his or her firm is compared with that of other employers doing similar work with workforces of similar size. The BLS publishes incident rates by size of establishment in the following size categories:
Size 1 - establishments with 1-10 employees
Size 2 - establishments with 11-49 employees
Size 3 - establishments with 50-249 employees
Size 4 - establishments with 250-999 employees
Size 5 - establishments with 1,000 or more employees
These BLS quartile estimates are available at http://www.bls.gov/iif/oshwc/osh/os/ostb4359.pdf
Aggregation of multiple years of data can alleviate the unfavorable effect a single case can have on a small establishment's incidence rate. For example, a small establishment can enter three years of injury and illness counts and three years of hours worked into the formula, while retaining the 200,000 constant. This would return an annualized rate for 100 FTE comparable to national rates. The increased hours worked figure would minimize any unusual swings in injury and illness counts.
Evaluation of injury and illness data is a vital component of hazard identification and abatement. However, it is only one component of an effective evaluation. OSHA strongly advocates the use of multiple variables to evaluate the effectiveness of an employer's safety and health program. While an injury and illness incident rate is a useful indicator of an establishment's safety and health environment, reliance on only one indicator can lead to wrong conclusions.
OSHA believes performance indicators should include both leading and lagging indicators. Lagging indicators generally track worker exposures and injuries that have already occurred. Leading indicators reflect the potential for injuries and illnesses that have not yet occurred. Examples of lagging indicators include: Number and severity of injuries and illnesses; results of worker exposure monitoring; and amount paid to workers' compensation claims. Examples of leading indicators include: level of worker participation in safety program activities; number of hazards and close calls/near misses reported, as well as amount of time taken to respond to reports; number and frequency of management walkthroughs; number of hazards identified during inspections; number of workers who have completed required safety and health training; number of days needed to take corrective action after a workplace hazard is identified or an incident occurs.
We hope you find this information helpful. OSHA requirements are set by statute, standards, and regulations. Our interpretation letters explain these requirements and how they apply to particular circumstances, but they cannot create additional employer obligations. This letter constitutes OSHA's interpretation of the requirements discussed. Note that our enforcement guidance may be affected by changes to OSHA rules. Also, from time to time we update our guidance in responses to new information. To keep appraised of such developments, you can consult OSHA's website at http://www.osha.gov.
Amanda Edens, Director
Directorate of Technical Support and Emergency Management