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Calculating the Cost of Workplace Injuries, OSHA-Style

Toby Graham /

You’ve got to hand it* to the folks at the Occupational Health and Safety Administration: they deal with things on a daily basis most of us hope to never witness or experience. I’m talking about third-degree burns, chemical poisoning, enucleation (if you don’t know what that is, don’t look it up), crushed limbs, amputation, asphyxiation… The list goes on. OSHA staff investigate, catalog, assess, and report on it all with the same precision and detachment of their colleagues at the CIA or the IRS. 

This isn’t due to morbid fascination on OSHA’s part—it’s because there’s a financial cost associated with every instance of workplace injury, illness, and death, and the Administration maintains that a safer organization is a more profitable organization

To help employers understand the economic impact of environmental health and safety accidents, OSHA has created a handy** online application.

“$afety Pays” allows organizations to “assess the impact of occupational injuries and illnesses on their profitability.” Users can select an injury type from a drop-down menu (or use their workers’ compensation costs), enter their company’s profit margin, and see their estimated total cost for any number of injuries. 

Just to play devil’s advocate, we decided to give $afety Pays a spin (or would that be $pin?) and use the agency’s own tool to see if some all-too-common workplace injuries really cost as much as OSHA would have you believe they do. Let’s take a look at a few numbers (using OSHA’s default profit margin of 3%):

For an employee who suffers a fracture, an employer…

  • can expect to see $53,458 in direct costs (which may or may not be paid by the employer, depending on the employer’s workers’ compensation insurance policy), and
  • can expect to pay $58,803 in indirect costs (always paid for by the employer),
  • for a total of $112,261.
    That means the employer
  • would need to at least generate $1,960,126 in sales to cover indirect costs,
  • or $3,742,033 to cover everything.

For an employee who suffers a concussion, an employer…

  • can expect to see $52,120 in direct costs, and
  • can expect to pay $57,332 in indirect costs,
  • for a total of $109,452.
    That means the employer
  • would need to at least generate $1,911,066 in sales to cover indirect costs,
  • or $3,648,400 to cover everything.

For an employee who suffers an amputation, an employer…

  • can expect to see $88,991 in direct costs, and
  • can expect to pay $97,890 in indirect costs,
  • for a total of $186,881.
    That means the employer
  • would need to at least generate $3,263,003 in sales to cover indirect costs,
  • or $ 6,229,366 to cover everything.

Yikes. Yeah, it’s going to be much cheaper to build that solid safety program. And plus, there’ll be less carnage—which, let’s be honest, most of us would pay to avoid.

*Not an amputation joke. 

**Seriously. Let’s forget about these poor word choices with a palette cleanser.

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