EMR is becoming more common as a qualification for businesses to just even meet the bare minimum of safety standards, especially when talent sourcing for a temp agency you are considering (electrical talent, mechanical talent, and the like). But what does EMR, TRIR, DART, and beyond have to do with being truly job ready?
What is EMR?
EMR is a company's experience modifier rate (also referred to in the industry as MOD). This is a calculation that insurance companies use to determine how likely a business may experience worker's comp claims, as well as the severity of those claims. It is calculated with three years of payroll and loss data (but doesn't contain the previous year).
So, for example, the most recent EMR for a company (as of this publication) would include 2017, 2018, and 2019 data, but not 2020 since that was last year.
In essence, experience modification is provided to the insurers and it's dedicated to their own claim experience, including past runs and premium thresholds.
The higher the payroll, theoretically higher the losses you are allowed, and the calculation is geared to the classifications for each job type of the employees in the company. These classifications are set by the National Council on Compensation Insurance (NCCI) to reflect each job classification’s inherent risk. For example, a lineman will undergo more risk than a secretary, so their class rate is significantly higher.
1.00 is an average EMR. It's used as a multiplier when insurance companies adjust premiums.
In order to even qualify for your bid, the construction staffing agency you are considering should be able to provide this number. It helps reduce risk and expense.
You may find that the EMR is achieved by sheer luck. Or, the subcontractor worked to make their EMR great.
Remember, it's not a lead indicator.
This is why the EMR rating is only the beginning...
"Safety is driven from the top. CEOs, presidents...our experience has been if someone like the CFO embraces safety activities, what we can accomplish is so much better."
-Michael McGuire, Safety Advocate for Marsh & McLennan Agency
What is TRIR?
TRIR comes into play because the EMR skips the previous year, whereas TRIR is a bit more up to date.
What is TRIR? TRIR is Total Recordable Incident Rate, also known as the Total Case Incident Rate (TCIR) or the OSHA incident rate. The calculation essentially determines your safety performance in regards to your incident rate.
TRIR is calculated by:
- Taking the number of OSHA-recordable incidents the company incurred in a specific year,
- multiplying that sum by 200,000 (this is a baseline: the amount of hours that 100 employees, working a 40-hour week, would log in 50 weeks),
- and finally, dividing that numerator by the total number of hours worked by your employees in that specific year.
If you want to check out your skill trade services' numbers easier, this incidence rate calculator from BLS can help.
3.1 is an average TRIR for all types of construction and all size companies.
This rating is critical as it could have larger effects on the company as a whole than just the contract itself. It could affect other trades on the site, or even shut down the job site entirely. Instead of viewing safety as just an annoying claim or from the loss perspective, it should be observed with an OSHA mentality.
OSHA may site not only the contractor, but the general contractor as well. So, when employing temporary employees, it is critical that they understand and adhere to the same safety guidelines and practices as the general contractor because OSHA will cite any incidents in the general contractor's rank, not the temp worker.
Which brings us to DART.
What is DART?
DART is Days Away, Restricted or Transferred. This determines a company's safety performance based on particular types of workers' compensation injuries. Here's how it works:
- The number of workplace injuries are added up. These have to be severe enough to incur days away from work, create job transfers and/or restrict the work activities of employees throughout the entire year.
- Then, that number is divided by the total number of hours worked for every employee in that year.
- Finally, the total is multiplied by 200,000 (there's that average again from TRIR).
1.5 is an average DART.
A high DART rate, like TRIR, could trigger an OSHA review of a company's safety programs, training programs, records keeping, and more. If a company is inconvenienced by safety, then a comprehensive OSHA inspection will not only take time away from their operations, but it may possibly expose violations and lead to fines or other corrective actions.
How to Assess a Company Beyond the Safety Ratings
If you are wondering about what who to partner with for your next project, it may seem like a process steeped with risk. After all, if we cannot fully assess a company with all of the ratings, then what can we do?
If the subcontractor you are investigating is diligent about qualifying for your work, then they will be more than happy to help you figure out why they are the best (and safest) fit for your job. This simple phrase can help you determine whether or not the company is job ready:
Tell us a little bit about your safety program.
If they fumble over this point or are put off by it, that may be a red flag. Look for nonverbal clues here (i.e., make sure that if you cannot meet in person, at least get on a Zoom call with video enabled). Component and ethical companies will provide you a roadmap for where they are, where they want to improve, and why their ratings are the way they are, with transparency.
Ask questions like:
- What sort of safety training is being offered?
- Are they willing to invest financially into safety (i.e., what have they done in the past year to invest in their EMR or invest in their workers' safety)?
- What time and energy is invested in safety?
- What is your interest in safety...why does it matter to you?
- Do you have a substance abuse program?
They should be able to provide: this is the training, the accountability, the awareness, here are our established goals, strategic plan of where we are right now and where we want to be. State-by-state regulations will determine what is needed in a safety strategic plan or safety program, but your questions still need to be answered.
-->If you are still unsure where to even begin in this process, we can validate your manpower plan and help you avoid a manpower crisis.--<
Why a Company Needs an Insurance Partner to be Job Ready
Although the aforementioned ratings are a great resource and asking questions will help you to ease your unease, there's a reason why we buy insurance: for those rainy days that we cannot predict. It is more common now for a company to have an insurance partner to assist in ensuring the safety of the job site. If you enlist skilled trade services that you really like, you want to ensure that they have a reputable insurance brokerage as a partner.
Insurance brokers who are valuable will employ those with decades of experience, with common training authorized through the Department of Labor and the National Education and Safety Center. The site lead will be a veteran that is well-trained and knows the policies and procedures of the job site (most likely with a degree in Occupational Safety and Health). The lead will most likely engage in:
- Monitoring with periodic audits
- Self-inspections of the job site
- Enforcement of the rules and regulations
- Daily task analysis to avoid mistakes and communicate effectively where workers will be and when (situational awareness)
If the sincerity is lacking for either the company or the insurance brokerage, and it's a hassle that they are thinking about safety, these are red flags.
In fact, there's a difference between vendors/subcontractors who place the coverage just based on price,
an outside partnership,
- comprised of safety consultants in an insurance brokerage firm,
- who are actually willing to invest in the company proactively and
- not bidding on simply on price.
A major point to keep in mind when searching for a construction staffing agency that is truly job ready, claims are actually shared. If an employee is injured, it will not only affect the contractor's EMR, but also yours. The EMR of your staffing agency matters because the higher the EMR, the higher the cost. It's really a partnership between the two companies to keep claims and costs low.