Recent Occupational Safety and Health Administration (OSHA) developments are a growing cause of concern for many employers and manufacturers in the United States. Effective Aug. 1, OSHA is expected to increase its fines for workplace safety violations by more than 80 percent. At the same time, OSHA and the Department of Labor (DOL) are making it harder than ever for employers to police safety violations.
In February, the DOL sued U.S. Steel Corp., alleging that U.S. Steel’s policy mandating that employees immediately report workplace incidents violates the OSHA Act because it allegedly discourages employees from reporting workplace injuries. According to Richard Mendelson, OSHA’s regional administrator in Philadelphia, “U.S. Steel’s policy discourages employees from reporting injuries for fear of retaliation. Because workers don’t always recognize injuries at the time they occur, the policy provides an incentive for employees to not report injuries once they realize they should, since they are concerned that the timing of their report would violate the company’s policy and result in some kind of reprimand.”
For employers, any increase in OSHA fines could be a costly problem, underscoring the importance of a robust and effective workplace safety policy. However, OSHA’s recent enforcement positions only create confusion over how to implement an effective safety policy, while at the same time avoiding a situation similar to U.S. Steel. In order to navigate these contradictory positions, companies must monitor changes in federal regulations, as well as understand what actions should be taken to minimize potential liability.
OSHA, Fines, and the Bipartisan Budget Deal
Under the OSHA Act of 1970, employers are responsible for providing a safe and healthy workplace. It ensures these conditions for American workers by setting and enforcing standards, and providing training, education, and assistance. That includes the ability to fine companies for health and safety violations, and to investigate retaliation against employees for reporting workplace incidents or unsafe conditions.
For the first time in more than 20 years, OSHA is significantly increasing those fines based on a provision in the federal government’s 2015 budget deal that flew under the radar. The provision allows OSHA to implement a “catchup” adjustment. The adjustment is based on the difference in the Consumer Price Index (CPI) since the last time OSHA raised penalties in 1990 through October 2015. After the initial increase in rates, OSHA will adjust penalties based on the CPI moving forward.
The provision could allow OSHA to raise rates more than 80 percent, if the maximum amounts are implemented. That means the maximum penalty for a willful violation would increase to about $127,000 from the current $70,000. The change is expected to go into effect by Aug. 1.
While OHSA could seek less than the maximum increase allowed, indications are that officials will ask for as much as possible. During a congressional testimony last October, David Michaels, OSHA’s assistant secretary said, “The most serious obstacle to effective OSHA enforcement of the law is the very low level of civil penalties allowed under our law, as well as our weak criminal sanctions. The deterrent effects of these penalties are determined by both the magnitude and the likelihood of penalties. However, OSHA’s current penalties are not strong enough to provide adequate incentives.”
The DOL vs. U.S. Steel
Even while claiming that additional penalties are necessary to ensure that companies comply with workplace safety rules and regulations, OSHA and the DOL appear to be making it harder to do just that.
The lawsuit against U.S. Steel stems from an OSHA investigation in 2014, after U.S. Steel suspended two employees that reported incidents several days after they occurred. According to federal court documents, one employee bumped his head on a low-hanging beam, but didn’t report the incident to his supervisor. Four days later, he allegedly began experiencing stiffness in his shoulder, and his union representative reported the head-bumping incident to U.S. Steel. The company suspended the employee for five days for failing to comply with its reporting requirements.
The complaint also alleges that another U.S. Steel employee noticed a small splinter in his thumb while working and removed it without reporting the incident. Two days later, after experiencing swelling, he received medical treatment and reported the incident. U.S. Steel also suspended him for five days.
Both employees filed complaints with OSHA, alleging that they were suspended in retaliation for reporting workplace injuries. OSHA investigated both incidents and determined that U.S. Steel retaliated, regardless of company policy. After U.S. Steel refused to change its immediate reporting policy, the DOL sued and asked for federal court intervention.
With the probability of a major increase in OSHA fines on the horizon coupled with increased enforcement, companies need to prepare themselves to avoid sanctions and to respond appropriately if they’re the target of an investigation. Steps to take include:
Staying Updated on OSHA’s Actions
Companies should work closely with their legal counsel to understand the enforcement positions and penalties OSHA could seek, and how they are affected. Business organizations and trade groups can also be good resources.
Know Your Vulnerabilities
Some workplaces present more potentially hazardous situations than others. By recognizing where common risks exist, employers can adopt policies that address the specifics of their workplace and proactively minimize workplace safety risks.
Review Your Policies and Procedures
In light of the increased focus by OSHA and costly fines, now is a good time for employers to perform a thorough audit of their workplace safety policies and procedures. Employers should review the specifics of their workplace, consult with supervisors, managers, and legal counsel, and determine the policy that fits best.
Everyone accepts that workers need to be trained on proper safety techniques. In case of workplace accidents and incidents, employees also need to know how to respond, including which forms to complete. Employers should regularly review training procedures and content to make sure they’re effective and up to date.
Have a Plan if OSHA Shows Up
When OSHA conducts an inspection, it rarely offers advance notice. That means every jobsite manager should know how to respond to an OSHA investigation, including who to contact and what rights the company has when inspectors arrive.
Notwithstanding the position a company takes regarding OSHA on-site inspections, the company should have a savvy legal team in place that understands the company, the industry, and the company’s objectives, and that can respond quickly if necessary.
With penalties for OSHA violations set to increase, employers need to be more proactive than ever. Reviewing all safety policies, developing a response plan, and educating employees before issues arise can decrease the chance of penalties and minimize them when they do occur.