A startling 69% of injuries and illnesses may never make it into the BLS Survey of Occupational Injuries and Illnesses (SOII), the nation's annual workplace safety and health "report card." The chronic and even gross underreporting of work-related injuries is among the most troubling conclusions in Hidden Tragedy: Underreporting of Workplace Injuries and Illnesses, a majority staff report by the Committee on Education and Labor, US House of Representatives.

These findings have profound implications for Workers' Compensation. For more than a decade, declining claims frequency have been celebrated as a major force in reigning in the costs of Workers' Compensation. While the economic shift from manufacturing to services reduced injury exposure, stepped up injury prevention efforts by employers and increased awareness of the benefits of expeditiously returning injured employees to work were heralded as major contributors to the declining rates.

Underreporting, however, distorts the factual basis and casts serious doubt on the validity of the data that drives decision-making. Annual reports of dramatic declines in claims frequency for the past decade have lulled employers into a false sense of security: we're doing an outstanding job by consistently lowering the incidence of injuries and illnesses, our programs are working, and we have properly allocated our resources on preventive health and safety measures. Contrarily the Hidden Tragedy concludes, the "SOII cannot be trusted as a gauge of the safety of American workplaces."

There are many reasons for underreporting and some, such as the exclusion of public employees and lack of understanding of reporting requirements, can be addressed with improved recordkeeping and training. Others such as occupational illnesses that have a long latency period (time between exposure and disease) are more difficult and will require investment in comprehensive health data collection systems. Yet, the one that is most worrisome is that both employers and employees underreport injuries and illnesses, compelled by economic or peer pressures.

Recognizing that OSHA relies on self-reporting, employers face strong incentives to underreport. Increasingly, injury and illness rates are used as evaluation criteria in the award of government and private contracts and bonuses; lower rates improve a bidder's chances. Businesses with fewer injuries are less likely to be inspected by OSHA, will have lower Experience Mods and look better to stockholders and consumers.