What Is an EMR Rating? The Experience Mod, Explained for GCs
An EMR rating is the number on a sub's workers' comp record that says whether its injuries cost more or less than the average for its trade. GCs ask for it at prequalification because it covers several years and the sub can't edit it. This guide covers what the number means, how it's calculated, which years it reflects, and what to check on the letter.
EMR, the experience modification rate, compares a contractor's workers' compensation claims with those expected for its payroll and trade. 1.00 is average; below 1.00 is better and lowers its premium, above 1.00 is worse and raises it. It is calculated by NCCI or a state rating bureau from about three years of claims, excluding the current year, and weighs how often a sub has claims more heavily than how big they are. Ask for the EMR letter, not a number on a form.
In this guide
What an EMR is
Workers' comp rates are set per classification: a roofing company pays the roofing rate per $100 of its roofers' payroll, and the clerical rate on its office staff. The experience modification rate adjusts that average to the individual employer. The rating bureau compares the sub's own payroll and claims with what an average employer in the same classifications would expect, and the result is a factor applied to its premium.
NCCI's own example shows what the factor does to a $100,000 premium:
| Mod | What it's called | Premium before | Premium after |
|---|---|---|---|
| 0.75 | Credit mod: better than average | $100,000 | $75,000 |
| 1.00 | Unity: average, or not rated | $100,000 | $100,000 |
| 1.25 | Debit mod: worse than average | $100,000 | $125,000 |
For a GC the premium is the sub's business. What matters is what the number records: how often the sub's people get hurt badly enough to file a claim, measured over several years and reported by insurers rather than by the sub. That is why it sits on most subcontractor prequalification forms next to the OSHA 300A.
How the mod is calculated
Most states use NCCI's Experience Rating Plan. You never need to run the formula, but four of its rules explain almost every mod you'll see.
Expected losses come from payroll
For each classification, the sub's payroll is multiplied by an expected loss rate per $100 of payroll. A bigger payroll in a riskier trade means more expected losses, so the comparison is always against a sub of the same size and trade.
How often counts more than how much
Each claim is capped at a state limit, then split at the state's split point. The part below it is primary loss and counts in full; the part above is excess loss and counts only partly. NCCI's worked example uses an $18,500 split point; each state approves its own.
Medical-only claims count at 30%
In the states that adopted NCCI's Experience Rating Adjustment, which is most of them, a claim with no lost-time benefits enters the mod at 30% of its value.
Size decides how far it can move
The weights grow with the employer's size, and a stabilizing value (the ballast) limits how far one loss moves the mod. A large firm's mod mostly reflects its own record. A small firm's is pulled toward 1.00, but one claim is a big share of what it was expected to lose, so it still moves.
The second rule is the one that matters at prequalification. NCCI's example compares two subs of the same size and trade, each with $50,000 in claims:
| Sub A | Sub B | |
|---|---|---|
| Claims | 1 claim of $50,000 | 10 claims of $5,000 |
| Total losses | $50,000 | $50,000 |
| Primary losses (full weight) | $18,500 | $50,000 |
| Excess losses (partial weight) | $31,500 | $0 |
| Effect on the mod | Smaller | Much larger |
Ten injuries say more about how a crew works than one bad accident does, and the mod is built to show it. A sub with a high EMR usually has a lot of claims, not one unlucky one.
Which years count
Each mod takes effect on the sub's rating effective date, normally its workers' comp renewal, and usually applies for a year. It is built from about three years of payroll and claims, and the current policy is never in it: the mod is calculated during the current policy, before its claims have been valued and reported.
NCCI's example: a mod effective January 1, 2026 uses policies that started between April 1, 2021 and April 1, 2024. For a sub that renews every January 1, that is its 2022, 2023 and 2024 policies. The 2025 policy enters the mod effective January 1, 2027, and the 2022 policy drops out.
The lag cuts both ways. A sub that fixed its safety program two years ago is still carrying the old claims, and a sub with a bad year this year still shows a clean mod. Read the EMR with the latest OSHA 300A, which covers last calendar year, and ask about anything recent.
Who calculates it
Insurers report payroll and claims; a rating bureau turns them into the mod. Which one depends on the state:
| Where the sub works | Who issues the mod |
|---|---|
| Most states | NCCI, under its Experience Rating Plan (39 jurisdictions approve it) |
| Indiana, Massachusetts, North Carolina | NCCI's plan, but the state's own bureau issues a mod for work only in that state |
| California, Delaware, Michigan, New Jersey, New York, Pennsylvania | The state's own rating bureau, under its own plan |
| North Dakota, Ohio, Washington, Wyoming | The state fund, under its own plan: these are the monopolistic states, where private insurers don't write workers' comp |
A sub with work in two or more NCCI states gets one interstate mod covering all of them. A sub that also works in a state with its own bureau can have a separate mod there. If your project is in a different state from the one on the letter, ask which mod applies to your job.
What's a good EMR, and setting your maximum
Anything below 1.00 is better than the average for the sub's trade. There is no official pass mark beyond that: owners and GCs set their own. Many GCs set their maximum at or near 1.00, and some accept a higher mod with a written explanation and a safety plan. Pick a number, write it into your prequalification standard, and apply it to every sub the same way.
Three things to keep in mind when you read one:
- A 1.00 can mean "not rated". A sub whose workers' comp premium is below its state's eligibility threshold gets the unity mod without any calculation, and so does a new business or one without enough data. Thresholds are set by each state and rise over time; North Carolina's has nearly doubled since 2007. A small sub with no EMR letter is giving you an answer, not dodging the question.
- Small subs move more on one claim. A two-person crew with one bad accident can show a debit mod that says little about how it works. Ask what happened before you rule it out.
- Pair it with the injury rate. The EMR is dollars against an expected amount; the OSHA 300A gives you counts against hours worked, which the TRIR calculator turns into a rate. Read together they tell you how often people get hurt and what it cost.
Reading the EMR letter a sub sends
Ask for the rating bureau's worksheet or a letter from the sub's insurer or agent, never a number typed on your form. Then check five things on it:
The rating effective date
It should be the sub's current rating year. A letter whose effective date is more than a year old has probably been replaced by a newer mod.
The name and the bureau
The business named must be the one you're hiring, matching its W-9 and license. Companies under more than 50% common ownership share one mod, so a letter in a sister company's name may be legitimate: ask.
Preliminary, final or contingent
A preliminary mod was calculated before the state's final rating values were in; a contingent one is waiting on audited payroll or losses. Either can still change.
Intrastate or interstate
Make sure the mod covers the state your project is in.
The mod itself, against your maximum
Record it with its effective date, and ask for the new letter when the sub renews.
The EMR letter is one item in a longer list; the subcontractor onboarding checklist covers the rest, and contractor onboarding shows how to collect it all through one link.
How TrackMyVendor automates this
- The EMR letter is read for you — the mod, its rating effective date, the bureau that issued it and the business it’s for — not typed in by the sub. Starter and above
- Anyone above your maximum EMR is flagged on the sub’s safety panel, against the threshold you set once in Settings. Starter and above
- A letter in another name, or past its date, is flagged too, so a sister company’s mod or last year’s letter doesn’t slip through. Starter and above
- Require the EMR letter on your checklist, and the sub’s upload link asks for it until it arrives. Starter and above
The mod is read from the letter the sub uploads, not verified with NCCI or the state bureau, and a flag never changes the sub’s compliance status — the decision stays yours.
How EMR letters are readSafety documents, read with everything else
Subs upload the EMR letter and OSHA 300A through the same link as their COI, W-9 and license — no account, no portal. The mod and the injury rates are read for you on Starter and above, and your first 25 subs are free.
Frequently asked questions
What is an EMR rating in construction?
What is a good EMR rating?
How is an EMR calculated?
Why does a contractor have an EMR of 1.00?
How often does the EMR change?
This guide explains how experience rating commonly works, based on NCCI's published description of its Experience Rating Plan. It isn't insurance advice: split points, eligibility thresholds and rules differ by state and change each year, and states with their own bureaus use their own plans. Ask the sub's agent or the rating bureau about a specific mod.