Mandatory Insurance for Work Accidents
SAT is the Accident Insurance granted to workers, providing financial aid in case of an accident or any other harmful situation that might occur in a working situation. In this article you are going to understand how this insurance is applied.
The contribution to SAT focuses on compensation paid by companies to their employees and temporary workers. It is calculated based on two rates called Occupational Accident Risk or RAT and the Accident Prevention Index or FAP.
Overview of SAT
The percentage of RAT is determined from the definition of the job’s activities carried out by the company, based on the National Classification of Economic Activities, CNAE, and published by the Executive Branch. The list with all classifications can be found here.
The fee is paid monthly to INSS, the National Institute for Social Security and applied to the total income of the employee. These rates vary according to the degree of risk in your job. The percentages are determined according to the risks involved in a jobs activity:
- 1% applied for low risk work activity
- 2% applied for medium risk activity
- 3% applied for severe risk activity
Jobs with higher risks are usually the ones that are more physically demanding, where the employee has to deal with heavy machinery such as industry jobs and also agricultural jobs, like corn and rice cultivation.
What is Considered a Work Accident
It is important to define what is considered a work accident, which by law is an accident that occurs because of work or whilst performing work duties, causing personal injury or functional disorder that causes death, loss or reduction in the ability to work either permanently or temporarily. They are classified by:
- Typical Accident: happens due to the basic nature of the job
- Accident of Path: happens on the way from the worker’s residence to the workplace, and vice versa
- Occupational Disorder: illness triggered or acquired by particular activities undertaken as part of a certain type of job
- Work Illness: acquired or triggered by the conditions and location in which the job takes place
The SAT is a guarantee to the employee, insuring against accidents at work. The SAT payment is the employer’s responsibility, as an addition to the employees payroll, with its management attributed to the Brazilian Social Security, known as Previdência Social.
The SAT rate can be considerably higher for workers that are exposed to harmful or toxic activities related to their job, meaning that their retirement age is lower as there is a limit to how long a person can perform these harmful activities.
Accident Prevention Index or FAP
Created in 2010, FAP is an index which measures a company's performance behind their economic activity related to industrial accidents that occurred during a given period. FAP’s rate goes from 0.5 to 2.0.
RAT is multiplied by the Accident Prevention Index or FAP, released for each company by Social Security and applied on the entire company's payroll. So the insurance calculated is RAT x FAP.
For the annual calculation of FAP, the Social Security Service will publish the values of these percentages in relation to their classification on economic activities. The data is calculated based on data from the previous 2 years and overwritten by the new annual data collected.
FAP, along with, costs, risks and other factors indicative of performance at CNAE will be available by the Ministry of Social Security, or MPS, and can be accessed on the MPS and Receita Federal websites.
Factors that are examined to determine the FAP are:
- Establishment and operation of Internal Commission for Accident Prevention, known as CIPA
- Quantitative and qualitative characteristics of the qualification and training of employees
- Composition of Specialized Services in Safety Engineering and Occupational Medicine or SESMT
- Information contained in the Environmental Risk Prevention Program, PPRA, and Control Program Occupational Health, PCMSO Analysis
- Investment in Collective Protection Equipment, EPC, Personal Protective Equipment, PPE and in any environmental improvement
- Number of fines from the failure to comply with regulatory standards of the SRT, Regional Superintendents of Labor
The investments mentioned above allow the value of FAP to be less than 1%, even when the company presents cases of death or permanent disability due to occupational accidents.