OSHA Law Update A Hazard Communication

The So-Called “Rule of 10″: A Myth about OSHA’s Lack of Jurisdiction Over Small Employers

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By Eric J. Conn and Amanda R. Strainis-Walker

One of the questions we are most frequently asked by small employers is about the so-called “Rule of 10″; i.e., the long-perpetuated myth that OSHA does not have jurisdiction over employers or workplaces with fewer than 10 employees.  This is a commonly misunderstood policy, so let’s set the record straight.

The short answer is, unless you are a small farming operation, OSHA does have jurisdiction in almost every circumstance.  There are some partial exemptions and exclusions from certain types of OSHA activity, such as maintaining Injury & Illness Recordkeeping logs and forms, and from certain types of inspections or citations, but those limitations rarely apply and really offer too little relief to small employers to be meaningful.

The summary below identifies what partial exemptions exist, who qualifies for them, and in what circumstances they kick in:

OSHA Recordkeeping Partial Exemptions:

Employers do not need to keep OSHA injury and illness records if they had no more than ten employees company-wide (not just the facility in question), at any single time during the last calendar year (i.e., peak level of employment during the previous 12 months), unless OSHA or the BLS informs you in writing that you must keep the records.  Here is a link to the OSHA regulations detailing this partial exemption.

There are also several historically low-hazard industries that OSHA has excluded from maintaining injury and illness logs.  The list of exempted industries are listed by SIC code in Appendix A to OSHA’s Recordkeeping regulations.  This industry exemption applies regardless of the number of employees.

Note that both the Small Employer and Low-Hazard exemptions to OSHA Recordkeeping are considered “partial exemptions” because all employers, including those partially exempted by reason of company size or industry classification, must comply with the reporting requirements of OSHA’s Recordkeeping regulations; i.e., must report to OSHA within 8 hours, any workplace incident that results in a fatality or the hospitalization of three or more employees (see §1904.39).

Exemptions from Inspections and Citations:

As Advanced Safety Health effectively outlined in their January 2010 Blog Post, “Does OSHA Inspect Employers with 10 or Fewer Employees?,” OSHA policy excludes some entities from certain inspection activity.  The key document to look at for these exclusions is OSHA’s Compliance Directive for “Enforcement Exemptions and Limitations under the Appropriations Act” (CPL 02-00-051 – CPL 2-0.51J), which outlines what employers OSHA is authorized to inspect and under what circumstances.  The Directive was last updated in late December of 2011.

Table 1 from the Directive (pasted  below) summarizes the exceptions and limitations:

To explain the table, OSHA is essentially prohibited from inspecting, under any circumstances (even fatality incidents), a small farm with 10 or fewer employees (and with no temporary labor camps).  If you are part of a small (again based on peak employment within the last year of 10 or fewer employees company-wide), non-farming operation AND your industry has a Days Away, Restricted, or Transferred (DART) Rate below the national average DART Rate of 2.0, then you are exempted from Programmed Safety-related inspections (to know for sure whether your industry is exempted from Programmed Safety inspections, OSHA’s Directive on Enforcement Exemptions and Limitations includes a list of the SIC codes that are partially exempted.)

Note that small non-farm operations in low-hazard industries are still subject to Programmed Health-related inspections, and any type of Unprogrammed Inspection; i.e., inspections following an incident, employee complaint or referral (e.g., from an emergency responder or the media).

In sum, while small employers do have some limited exemptions (small, low-hazard industry employers are exempted from maintaining injury and illness records and are excluded from safety inspections only), unless you are a small farm without temporary labor camps, the fact is, OSHA can inspect your facility, and can issue citations.