When I talk with clients about business risk, I inevitably get asked, “What’s this I keep hearing about DART rates? Does it really impact my business? How do I calculate it?”
Understanding your organization’s DART rate is a critical aspect of compliance, and it can have various implications on your business. Vendors and customers are increasingly requesting DART rates as part of the selection process, and the Occupational Safety and Health Administration (OSHA) uses your DART rate to make determinations on your safety record and workers’ compensation — the safer your work environment, the lower your rate will be.
Let’s unravel what a DART rate is, how to calculate it and the financial impact it can have on your business. Then, we’ll look at strategies for lowering your DART rate and improving worker safety.
WHAT IS A DART RATE?
DART stands for Days Away, Restricted or Transferred. The DART rate is an OSHA calculation that determines how safe your business has been in a calendar year in reference to particular types of workers’ compensation injuries. It’s determined by how many workplace injuries and illnesses resulted in employees missing work, required restricted work activities or resulted in them being transferred to another job.
OSHA issued new reporting requirements, and companies are now required to submit DART rates electronically. Results are heavily monitored and play a very critical role in determining whether you are selected for an unwelcome visit from OSHA. The lower the rate, the better off your organization will be. The good news is you may be able to lower this rate even further by making sure it’s calculated properly.
HOW TO CALCULATE A DART RATE
Your organization’s DART rate is calculated in the following way:
- Add up the number of workplace injuries that are severe enough to warrant days away from work, restricted work activities and/or job transfers encountered throughout the year.
- Divide that number by the total number of hours worked for all employees in that year.
- Multiply this summation by 200,000.
Here’s an example:
Let’s say your organization experienced a total of five recordable workplace injuries throughout the year, and all employees — including management, temporary and leased workers — accumulated 645,000 hours worked in that year. Given this scenario, here is how your organization’s DART rate would be calculated:
5 / 645,000 = .0000077 x 200,000 = 1.54 DART Rate
HELPFUL TIPS WHEN CALCULATING YOUR DART RATE
- Do not include vacation, sick leave or holidays when calculating the total number of hours worked during the year.
- Be sure to include all “eligible” hours worked in the IR calculation. When calculating IR, the denominator (total hours worked) must be accurate. Basic algebra reveals that the higher the denominator, the lower the rates will be.
It’s important when determining the total hours worked to not overlook clerical staff, maintenance personnel, temporary workers or employees who are exempt (e.g., salaried). Also, when estimating hours worked for exempt employees, it’s essential to closely examine these numbers and avoid any potential miscalculations. For example, if an exempt employee worked 50 hours per week on average and took three weeks of vacation last year, their estimated hours worked should be calculated to 2,450 (50 hours x 49 weeks) as opposed to 2,080 hours (40 hours x 52 weeks). This is a common mistake that employers make when calculating hours worked for exempt employees.
- Ensure that new rules for electronic submission of forms are followed. Provide proper training for those responsible for recordkeeping and maintaining OSHA logs. Also, contractors should review their logs to make sure only those cases involving medical treatment — not first aid — are recorded.
- Compare your DART rate with the average for your standard industrial classification, which is published annually by the Bureau of Labor Statistics. This will determine the effectiveness of your safety management program.
- Implement a return-to-work program to minimize the number of lost workday cases. Recording a “restricted/transfer” case is preferable to recording a “lost workday” case. While it’s not ideal to have either case on your log, a “restricted/transfer” case is considered less severe. Educate those in supervisory positions on the benefits of a return-to-work program.
IMPLICATIONS OF A HIGH DART RATE
A high DART rate can have a major financial impact on your organization. Many businesses now request DART rate information from their suppliers and subcontractors to ensure they’re working with companies that have acceptable safety standards. A high rate could put your organization in a negative light and result in lost sales.
A high DART rate could also trigger a comprehensive OSHA inspection of your safety programs, record keeping, training programs and more. This is especially important now that the new electronic reporting law is in effect and OSHA can immediately be alerted about companies with high DART rates. An OSHA inspection is not only an inconvenience that can take time away from your operations, it could also expose potential violations and lead to fines or corrective actions.
Perhaps one of the biggest financial implications is the effect a high DART rate has on your workers’ compensation insurance premiums. Your DART rate is an indicator of how safe your work environment is, which impacts your Experience Modification Factor — a major factor in determining work comp premiums. Work comp claims that have lost time or wages can cost employers approximately three times more than having the claim be considered “medical only.”
STRATEGIES FOR MAINTAINING A LOW DART RATE
There are numerous “Best practices” regarding injury prevention to lower your Dart Rate. The majority of successful companies will site their well communicated, company-wide safety culture as the key to their success. The culture is developed by consistent messaging and behaviors throughout the company, such as: safety committee meetings, safety posters as visual reminders, strong accident investigation programs, job safety analysis for each job, early return to work program and many others.
There’s a lot to consider when attempting to lower your DART rate and improve the safety and wellbeing of your valued employees. A thorough risk assessment can help you identify potential threats and address them. If you’d like help calculating your DART rate or want to discuss additional strategies for reducing your rate, reach out to one of McClone’s risk advisors today.