Industrial Code Rule 59 and 60 of the New York State Department of Labor (NYSDOL) programs directed at addressing workers compensation premiums and costs:
Industrial Code Rule 59 (ICR 59) is directed toward companies with payroll equal to or greater than $800,000 and an experience modification rate (EMR) of more than 1.20. The EMR is a multiplier used to calculate your workers compensation premium. Companies with little or no history start at the industry average rate of 1.0. As a company’s work and loss experience becomes established over the course of several years, its losses are used to calculate a company specific EMR. If it increases above 1.0, that suggests that the company safety performance is below the industry average and the company is paying an insurance surcharge or premium for its coverage. Likewise, an EMR of less than 1.0 suggests that the company is performing better than average for the industry, and the company is basically receiving a discount on their workers compensation premiums. ICR 59 is a mandatory program that companies with elevated EMR’s are required to participate in. If a company does not participate, an additional 5% surcharge is added to its insurance premium each year until compliance is achieved.
Industrial Code Rule 60 (ICR 60) is a program by which companies with successful safety programs can seek to obtain a credit against their workers compensation premiums. The program addresses three programs: Safety Incentive, Drug and Alcohol Prevention and Return to Work. Obtaining NYSDOL approval for all three programs can result in a 10% premium credit the first year and 6% credits each of the next two years with an option to continue participating in the program at the 6% rate for additional cycles.
Companies should consider both programs as a means to reduce their workers compensation costs. While the State will not require Company participation in ICR 59 as long as the company’s EMR is less than 1.20, reducing the EMR from 1.2 down to 1.0 could result in a significant cost savings (e.g. assuming a base premium of $100,000, reducing the EMR from 1.2 to 1.0 would result in a premium reduction from $120,000/yr to $100,000/yr, a $20,000 savings. Further reductions in EMR would result in even more significant savings.