Oregon OSHA's

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October 2016

Administrator's Message
Workers' Comp Premiums Illustrate Continued Success

Michael Wood, Oregon OSHA Administrator

In September, the Department of Consumer and Business Services (DCBS) – of which Oregon OSHA is a part – announced an average decrease of 6.6 percent in the workers’ compensation “pure premium” rates for 2017. Those rates, based on expected losses, provide the basis for the workers’ compensation premiums charged to all employers in the state. The 2017 reduction in the average pure premiums comes on the heels of reductions of 5.3 percent the past two years and of 7.6 percent in 2014.

The DCBS announcement was headlined “Workers’ compensation costs to drop for fourth straight year.” But the true story goes back more than two-and-a-half decades. And it is a story that trumpets the success of Oregon’s commitment to primary prevention – to avoiding the cost of workers’ compensation claims in large measure by preventing the injuries and illnesses that generate those claims in the first place.

From 1991 through 2002, the rates declined every year, sometimes by very substantial amounts. They were flat from 2003 through 2006, and then they declined for five more years. So, for a 21-year period, Oregon employers saw no increase (and many decreases) in the rates. That string was broken in 2012 with a 1.9 percent increase, followed in 2013 with a 1.7 percent increase. Those two very modest increases came in the wake of the most significant economic dislocation in the country’s history since the Great Depression. And, in 2014, the decrease of 7.6 percent not only erased the effect of those two increases, but took the rate down as much again. All of this before three more years of significant decreases in 2015, 2016, and 2017.

While the finances can be complicated – and, of course, the premiums paid by individual employers and in individual industries may vary – the bottom line is simple. These rates mean cost savings to Oregon employers, and they benefit the overall economy. And while several factors influence the rates, including effective efforts to control medical costs and to return injured workers to productive employment, the reality that the best way to reduce claims costs is by preventing claims in the first place is essential. And it has been critical to Oregon’s success over the years.

The rates also come at a time when workers’ compensation benefits around the country are under pressure – the United States Department of Labor has stepped up its own criticism of what it sees as a growing national trend to squeeze benefits in order to keep workers’ compensation premiums under control. But, in Oregon, we have largely resisted those pressures – as the department’s materials note, there have been no meaningful reductions in Oregon worker benefits since the early 1990s.

Fundamentally, there is no conflict between a strong economy and taking steps to protect workers from injury, illness, and death. In fact, injury prevention supports a strong economy. It supports it by keeping productive workers on the job. It supports it by keeping wages flowing. And it supports it by keeping the costs of injuries under control.

The credit for Oregon’s success can and should be shared by a lot of people in the broader safety and workers’ compensation systems. But a real share of that credit belongs to those in Oregon OSHA and elsewhere who work to make workplace health and safety a reality – those who strive to make workplaces safer, to eliminate hazards, and to address ongoing risks. Never forget that your work has a real impact on real people.

And one place that we can see that impact is in the continued success in pushing Oregon workers’ compensation premiums down. For both the staff within Oregon OSHA and for all of you who work to make Oregon’s workplaces as safe and healthy as possible, the workers’ compensation announcement offers a simple opportunity to take just a moment and celebrate a job well done!


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