🎯 Your experience mod (EMR) affects your bids in two ways: it multiplies your workers' comp premium, which is baked into your labor cost, and many general contractors set a hard EMR cutoff (commonly 1.00 or lower) as a prequalification gate. With an EMR of 1.25 your premium is multiplied by 1.25, while a competitor at 1.00 pays the unmodified premium on the same payroll, so you either bid higher or absorb the difference. If a GC's prequalification requires EMR ≤ 1.00 and yours is 1.05, you do not get to bid at all.
Last updated: August 2026.
TL;DR
- Experience mod (EMR) is a multiplier applied to your workers' comp premium: 1.00 is the industry baseline, below 1.00 saves you money, above 1.00 costs you more.
- Because the mod multiplies the whole premium, even a small change in the mod moves your labor cost, which flows straight into your bid.
- Many commercial GCs set an EMR cutoff in prequalification, often 1.00 or lower for high-hazard trades, so a high mod can disqualify you before pricing matters.
- EMR calculation is administered per state (through NCCI or an independent state rating bureau); the number itself follows a national formula, but thresholds and rules vary, so verify with your state agency.
⚠️ Before you bid: Your state's rating bureau and your insurance broker hold the authoritative EMR rules for your class code and payroll size. This article is educational — verify all numbers with your state bureau and broker before submitting a bid or renewing coverage. Do not price a job or make a prequalification decision based on this article alone.
Definition: what "experience mod" actually is
Experience modification rate (EMR), also called the experience mod, x-mod, or e-mod, is a numerical factor that adjusts your workers' compensation premium based on your company's past claims history compared to other businesses in the same class code. It is calculated by comparing your actual losses to the expected losses for a business your size in your trade. An EMR of 1.00 means you perform exactly as expected. Below 1.00 (say 0.85) means fewer or smaller claims than expected, and you pay less. Above 1.00 (say 1.30) means worse-than-expected claims, and you pay a penalty.
The mod is recalculated annually, usually from a three-year window that excludes your most recent policy year. That lag matters: a bad claim can follow you for three years even after you have fixed the underlying safety problem.
How does experience mod affect my bids
Your EMR affects your bids because workers' comp premium is a direct labor cost, and the mod is the multiplier on that cost. Here is the mechanic.
The mod is applied to the premium your class codes and payroll produce. A mod of 0.80 multiplies that premium by 0.80; a mod of 1.25 multiplies it by 1.25. Two subs with the same payroll and class codes can therefore carry different labor costs into the same bid. Your broker can show you what your own mod does to your own premium.
Base rates, class codes, and the mod formula are state-specific — an "independent bureau" state (e.g., California, New York, Pennsylvania) can differ materially from an NCCI state. Look up your exact class-code rate and mod rules through your state rating bureau or NCCI before relying on any rule here.
Sources and where to verify
Use these authoritative resources to confirm the rules that apply to your company. EMR rules and thresholds vary by state, so always cross-check with the bureau that governs your policy.
- NCCI — Experience Rating and the Experience Rating Adjustment (ERA): Official explanation of the national experience-rating formula used in many states. See ncci.com (accessed August 2026).
- Your state rating bureau (independent-bureau states): For example, WCIRB California, the New York Compensation Insurance Rating Board (NYCIRB), or the Pennsylvania Compensation Rating Bureau (PCRB). Identify and confirm the bureau for your state (accessed August 2026).
- U.S. Department of Labor — Office of Workers' Compensation Programs: Federal overview of workers' compensation programs at dol.gov/agencies/owcp (accessed August 2026).
- OSHA — Recordkeeping and injury/illness data: Because claims history drives your mod, OSHA's recordkeeping resources help you understand and reduce the incidents that push it up. See osha.gov/recordkeeping (accessed August 2026).
For your specific class code, payroll size, and any GC prequalification threshold, contact your state rating bureau and your insurance broker directly — they hold the authoritative figures.