What Is An Experience Modification Rating?

Your workers compensation experience modification factor is a 3 digit number assigned by your state’s workers compensation rating board which tells you a lot about how well you’re preventing and managing your employee injuries.

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Video Transcript:

Your EMR which is your experience modification rating, is your claims experience, which is basically a ratio of your pay roll divided by claims.

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The NCCI or your individual state if your state is large enough, will calculate this number for you and you will see it on your workers’ compensation policy every year.

This ratio is trying to find out whether your claims ratio is equal to, in excess of, or better than what is expected for your classification of payroll.

A 1.0 EMR means your average, this means you are generating claims and claims amounts that are equal to what is expected or what is average for your payroll class. As your emr goes over 1.0 you will start to see percentage surcharges on your policy. Just as if your emr goes  below 1.0 you will start to see percentage credits.

For contractors, working on jobsites, there are sometimes guidelines that will preclude you from being eligible to be on a jobsite if your modification is over 1.0

In New York, if your experience modification is over 1.2 and your payrolls are over $800k you will be issued industry code rule 59 violation which requires you to go through a 13 point checklist with a state licensed consultant to rectify this violation.

Some contractors, developers and real estate property managers will not allow contractors to come onto their sites if their EMR is over 1.0