Who Pays for the Actions of Unsafe Employees?

[fa icon="calendar'] Aug 10, 2015 8:00:00 AM / by Deborah Lechner

Do you feel your taxes – personal and/or business – are too high?  Are you aware employee injuries are part of the reason you pay so much? Most people are under the impression that the costs of on-the-job injuries are taken care of via the workers' comp system. However, according to OSHA, that isn't the case. In a 2015 report that sheds new light on the importance of preventing workplace injuries, OSHA shows that only a small percentage of overall costs of workplace injuries are covered by employers through workers' compensation, with the rest borne primarily by injured workers, their families, and taxpayers.

Despite the good intentions behind workers' compensation programs, they have never completely covered the costs of on-the-job injuries – a fact that many employers are surprised to hear, given the costs to businesses associated with these programs. Additionally, according to OSHA, over recent years the gap between the actual costs of employee injuries and what workers' compensation covers has likely increased, as many states have made changes in their workers' compensation systems that make obtaining benefits more difficult for injured workers. They state that currently only a small proportion – about 21 percent – of the overall costs of on-the-job injuries are actually paid by workers' comp.

So who pays the rest? OSHA's report shows that about 50 percent of the overall cost is paid out-of-pocket by the injured workers and their families. About 13 percent is paid by private health insurance. Workers' compensation makes up 21 percent, with the federal government footing the bill for about 11 percent of the total cost of work-related injuries and state and local governments paying out about 5 percent.


What this means is that preventing workplace injuries isn't just important to controlling the workers' comp costs your business pays out. Those injuries also impact taxpayers, including yourself and your company, who fund federal, state, and local disability and medical assistance programs. The largest toll of unsafe employers and workplaces by far is the financial hardship faced by injured employees and their families – a toll that, in cases of serious, debilitating injuries, may impact them for the remainder of an injured employee's lifetime and even beyond.

What Can Your Company Do to Reduce Its Contribution to This Problem?

Minimizing injuries in your workplace reduces their impact on everyone involved, including your company, other taxpayers, and your employees and their families. Minimizing environmental hazards in the workplace is a great first step. While not all hazards can be removed, taking measures to ensure that employees are well-equipped to safely handle those that cannot be eliminated should be given top priority. Among the most effective measures to take are instituting and enforcing clear safety policies and procedures in the workplace, providing comprehensive safety training for employees, and keeping safety equipment updated and in plentiful supply.


Last, but certainly not least – especially if your workplace is a physically demanding one – the importance of making sure that you are hiring people who are physically capable of performing the essential functions of the job cannot be overestimated. A scientifically validated physical ability testing program is the most effective way to make that happen. How much difference can this make in terms of preventing workplace injuries? In research done on employees in strenuous warehouse jobs, pre employment physical ability testing reduced injuries by 47 percent – certainly a significant contribution to workplace safety and a big step towards reducing the substantial human and financial costs of worker injuries.

legal considerations in Physical Abilities Testing

Topics: Workplace Safety

Deborah Lechner

Written by Deborah Lechner

Deborah Lechner, ErgoScience President, combines an extensive research background with 25-plus years of clinical experience. Under her leadership, ErgoScience continues to use the science of work to improve workplace safety, productivity and profitability.