On January 1, 2015, OSHA rolled out its Severe Injury Reporting Program, requiring all employers to report to OSHA within 24 hours any work-related amputations, inpatient hospitalizations, or loss of an eye. The long standing requirement to report work-related fatalities to OSHA within 8 hours also remains in place.
According to a report issued by OSHA on January 17, 2016 evaluating the impact of the new reporting requirements, before the requirements were established, compliance officers were often dispatched to inspect a fatality in the workplace, only to discover a history of serious injuries had taken place there in the past, unbeknownst to OSHA. The new reporting requirements were intended to enable the agency to better target enforcement efforts and engage more high-hazard employers in identifying and eliminating serious hazards. “In case after case, the prompt reporting of worker injuries has created opportunities for us to work with employers we wouldn’t have had contact with otherwise,” said Assistant Secretary of Labor for Occupational Safety and Health David Michaels, who authored the report. “The result is safer workplaces for thousands of workers.”
Making a severe injury or fatality report to OSHA does not necessarily result in a visit from compliance officers. Rather, in 62% of the over 10,000 reports OSHA received this year, employers were instructed to investigate the incident themselves and produce to the agency a Rapid Response Investigation report in which the employer explains the root cause(s) of the incident that resulted in the severe injury and what the employer has done or plans to do to address the hazard(s) it has discovered. OSHA intends to continue this practice, as it has proven effective, and is an efficient use of OSHA’s limited resources.
Although 10,000 severe injury reports in the first year (translating into about 30 fatalities or serious injuries per week) may seem like a large number, OSHA says it strongly believes that a substantial number of injuries that should have been reported were not. The agency reached this conclusion by looking at a number of different factors including the number of injury claims submitted to state workers’ compensation programs, which indicated that employers may be underreporting to OSHA at a rate of over 50%.
Most of the reports that OSHA received this year were from large employers so OSHA believes the underreporting is caused by lack of awareness of the rule among small and mid-sized employers. The agency intends to address this issue with a major outreach campaign this year which will be accomplished through efforts with insurers, first responders, and business organizations, among others.
There is also a concern that some employers are well aware of the rule but perceive the cost of not reporting as too low to be concerned about it. OSHA warns in its report that with the new reporting requirements now in their second year, employers who have intentionally failed to report are far more likely to receive citations carrying penalties of up to $7,000 for failure to report, and those penalties will increase by approximately 80% when OSHA’s penalties are adjusted later this year.
This exemption applies to workplaces with 10 or fewer workers who perform work in industries OSHA deems low hazard. OSHA identifies low hazard industries by studying the most recent results of mandatory surveys sent to employers in countless industries by the Bureau of Labor Statistics which collect information about how often employees were unable to perform their normal job duties because of workplace injuries or illnesses. Those industries with the lowest numbers are included in the list.
The change to the list became effective on January 29, 2016, and will remain in effect until updated, which typically happens at the beginning of each year.
Newly Exempt Industries
There are over 400 industries included in the list of exempt small businesses. Among the industries newly exempt from inspections are:
Electrical contractors and wiring installation contractors
Soybean and other oilseed processing
Inorganic chemical manufacturing
A number of retail industries including boat dealers, motorcycle dealers, floor covering stores, electronics stores, meat markets, fish and seafood markets, tobacco stores and vending machines
Farm product warehousing and storing
Residential and Nonresidential property managers
Full-service restaurants, cafeterias, buffets and snack bars
Industries No Longer Exempt
Many of the industries deemed exempt in the last revision of this list no longer enjoy an exemption from inspections. A sampling of the industries no longer included in the list includes:
Heavy and civil engineering construction
Industrial gas manufacturing
Medicinal and botanical manufacturing
Retailers including RV dealers, household appliance stores, all manner of electronics and computer stores, paint and wallpaper stores, fruit and vegetable markets, and beer, wine and liquor stores
Investment and securities dealing, securities brokerage, commodity contracts dealing, and commodity contracts brokerage
Pension funds, health and welfare funds, and other insurance funds
Employers should be mindful that even if they have 10 or fewer employees performing work in an exempt industry they are still at risk of an OSHA inspection if employees suffer a work-related fatality or severe injury (see related story) or an employee makes a complaint to OSHA.
At a construction worksite, a supervisor and his subordinate from Quinlan Enterprises were found working on a 15 foot wall without fall protection or a secure ladder. The company was held responsible for the OSHA violation, because, in most cases, a supervisor’s knowledge of a violation is imputed to the employer. Quinlan appealed citing the Eleventh Circuit’s Comtran decision. Comtran held that when a supervisor participates in the violation independently, that supervisor’s knowledge of the act is not sufficient to establish that the employer is aware. The Quinlan court disagreed, noting that the Comtran exception does not apply because the supervisor was not the sole participant in the violation.
The Department of Justice and the Department of Labor have teamed up to encourage federal prosecutors to pursue OSHA and other worker safety violations as environmental crimes. These crimes can be charged as felonies, while OSHA violations are considered misdemeanors. The initiative will facilitate the sharing of information and files between the DOJ and DOL to pursue criminal actions.
To establish that an OSHA regulation has been violated, the Secretary must prove that: (1) the regulation applied; (2) it was violated; (3) an employee was exposed to the hazard that was created; and (4) the employer knowingly disregarded the OSH Act’s requirements. The general rule has been that the knowledge of a supervisor is imputed to the employer – so if the supervisor knew or should have known of the violation, his knowledge is imputed to the employer and the Secretary can use this fact to show that the employer had knowledge of the violation.
The Court of Appeals for the Eleventh Circuit in Comtran Group, Inc. v. U.S. Dept. of Labor, 722 F.3d 1304 (11th Cir. 2013) held that there is an exception to the general rule: when a supervisor is acting independently and knows that he himself has violated an OSHA regulation, his knowledge of his own violation is not necessarily imputed to his employer. The Comtran court found that in such instances the Secretary must prove something more than the supervisor’s own knowledge of his own wrongful conduct to establish the employer knowledge element of a violation. Specifically, the Secretary must show that the employer had reason to foresee the unsafe conduct of the supervisor.
On January 8, 2016, in Quinlan v. Secretary, U.S. Department of Labor, No. 14-12347 (11th Cir. January 8, 2016), the Court of Appeals for the Eleventh Circuit faced a slightly different issue – is supervisor knowledge imputed to the employer when a supervisor acts in concert with a subordinate employee and both supervisor and employee violate an OSHA standard? The Eleventh Circuit refused to apply the reasoning of Comtran and held that it is — a supervisor’s knowledge of a subordinate employee’s OSHA violation is imputed to an employer when a supervisor working for the employer is aware of the subordinate employee’s OSHA violation and the supervisor is simultaneously involved in the violation.
The takeaway for employers is that the supervisory misconduct defense applies only when a supervisor violates an OSHA standard independently, and even then, it is not always a successful defense. Accordingly, employers should take steps to ensure that safety programs are applied effectively to supervisors and subordinate employees such as:
Provide supervisors and subordinate employees with training on every safety standard and company policy related to their work. Ensure all employees comprehend the training to effectively reduce the possibility of a violation taking place.
Remind supervisors to lead by example by following all safety rules and refusing to cut any corners.
Remind supervisors that if they observe a subordinate employee committing a safety violation, they must put an end to it immediately, and where appropriate, initiate disciplinary action. Otherwise, that supervisor’s knowledge will be imputed to the employer.
Remind supervisors that they too are subject to disciplinary action should they fail to follow safety rules and company policies.
After a year of OSHA’s promises that an online form for reporting work-related fatalities and severe workplace injuries was “coming soon,” the agency finally unveiled the form on its website on December 24, 2015. The online form is one of three options that employers can use to fulfill updated fatality and severe injury reporting requirements, which went into effect on January 1, 2015 (see related story). Employers also have the options of calling the OSHA office nearest to their worksite or calling the OSHA 24-hour hotline at 1-800-321-6742 (OSHA) to make a report.
The updated reporting rule requires all employers to notify OSHA when an employee is killed on the job or suffers a work-related hospitalization, amputation, or loss of an eye. A fatality must be reported within 8 hours. An in-patient hospitalization, amputation, or eye loss must be reported within 24 hours.
No matter the option an employer chooses to use in making a fatality or severe injury report, the employer must be prepared to inform OSHA of the following information:
names of employees affected;
location and time of the incident;
brief description of the incident;
additional information relevant to the incident;
the number of fatalities and/or injuries;
the object or substance that have caused the harm (if known);
whether the harm was a fatality, hospitalization, amputation, loss of an eye or some combination of these; and
the identity of a contact person and their phone number.
Since OSHA’s revised fatality and severe injury reporting rule went into effect on January 1, 2015 (see related story), employers have been deeply concerned that the agency would use information contained in Rapid Response Investigation Reports (RRIs) — required by OSHA in response to approximately 50% of the reports made this year — as the basis for issuing citations and fines. This concern stems from the fact that when OSHA finds an employer’s RRI unsatisfactory, such as where the employer merely blames the victim or fails to provide what the agency determines is an adequate plan to address identified hazards, OSHA may determine that an inspection is in order.
Late last week, in an interview with Business Insurance Magazine, Assistant Secretary of Labor for OSHA, Dr. David Michaels, clarified that OSHA has never used information contained in a RRI to justify a citation or fine and it never will. Dr. Michaels emphasized OSHA’s goal that employers feel confident that they can communicate openly with OSHA without repercussions, and that the agency is developing an official policy providing assurance that RRI information will not be used in issuing citations. Rather, OSHA explained, if the agency chooses to inspect an employer’s workplace in relation to a RRI that the employer submitted, OSHA will use information gathered during the inspection, rather than information included in the RRI, to determine whether citations should be issued.
This move may have been motivated in part by OSHA’s concern that employers are underreporting injuries that should have been reported under the new rule. The rule requires all employers to notify OSHA when an employee is killed on the job or suffers a work-related hospitalization, amputation, or loss of an eye. A fatality must be reported within 8 hours. An in-patient hospitalization, amputation, or eye loss must be reported within 24 hours. OSHA anticipates receiving approximately 12,000 reports under the new rule by the end of the year, far less than agency officials believe should have been filed. Issuing an official policy reassuring employers that submission of incident information in RRIs will not result in citations and fines could encourage more employers to come into compliance with the new reporting rule.
Retail store Dollar Tree has agreed to a hefty fine as well as continual monitoring of its stores across the US. A third-party monitor will conduct audits on 50 stores over the next two years. This settles a wide range of complaints arising from 13 different OSHA inspections. The agency is increasingly using this tactic of issuing repeat citations for the same violations at different company worksites. This could have a much bigger impact beginning next year, when OSHA fines are set to rise about 80 percent.
OSHA has employed many creative strategies to maximize its enforcement efforts during the Obama administration. One such tactic involves scrutinizing employers with multiple worksites (retailers are a particularly easy target), sending compliance officers to inspect one of the worksites, issuing citations, and then visiting the employer’s other worksites, identifying the same problems found in the first worksite inspected, and issuing repeat citations to the employer based on the citation issued at the original worksite. This approach gives OSHA significant bang for its buck, not only creating the opportunity to issue more citations by inspecting multiple facilities, but also making it possible for the agency to issue costly repeat citations, which carry fines as much as ten times higher than the current limit on citations classified as serious.
This is what happened to Dollar Tree Stores Inc. (Dollar Tree), which recently entered into a corporate-wide settlement agreement with OSHA to resolve citations arising from 13 different inspections – many involving blocked emergency exits, obstructed access to exit routes, electrical equipment, and improper storage of merchandise. The settlement applies to some 2,400 Dollar Tree stores throughout the United States subject to regulation by Federal OSHA, but state plans having Dollar Tree stores located in their jurisdiction have been strongly encouraged to adopt the parameters of the settlement agreement as well.
Dollar Tree must pay $825,000 in fines to resolve the citations, but that is just the beginning. In addition, the retailer must provide immediate safety training in its stores in a manner that all employees are able to comprehend, abate the issues identified in the inspections as quickly as possible, issue a newsletter regarding health and safety issues to its employees at least quarterly, submit to multiple safety audits at stores selected by OSHA, and quickly address any issues identified in the audits.
Dollar Tree must also put a number of additional administrative and engineering controls in place, but what is perhaps the most onerous element of the agreement is that it requires the employer to adopt a safety and health program focusing on the core elements included in OSHA’s Safety and Health Program Management Guidelines (Guidelines). The Guidelines were originally published in 1989, but major revisions have recently been published and OSHA is welcoming comments on the new version through February 15, 2016.
Dollar Tree must design a program that focuses on the core elements set forth in the 1989 Guidelines, as the revised version has not yet been finalized. Specifically, the retailer must: (1) demonstrate its commitment to workplace health and safety; (2) involve employees in the safety and health program; (3) identify health and safety hazards; (4) control health and safety hazards; (5) provide education and training for all employees related to the safety and health program; and (6) evaluate the safety and health program. Essentially, the settlement agreement requires the employer to create a culture of safety throughout the organization. Although Dollar Tree is required to create a program addressing all of these elements, the Guidelines are not prescriptive. OSHA recognizes that every business is different and offers a non-exhaustive list of possibilities that employers could choose from in creating a safety and health program that comports with every element of the Guidelines.
Employers should expect OSHA to more frequently demand the incorporation of the Guidelines in future settlement agreements. The agency has publically announced that adoption of the Guidelines and the creation of a safety culture is a top priority.
So what actions can employers take now?
If OSHA has already issued repeat citations to your organization for alleged violations at multiple locations, consider discussing with counsel whether working toward achieving a corporate-wide or regional settlement is a good option for your business. If, as anticipated, OSHA raises fines by about 80% this year (see related story), and your business continues to accumulate citations, those citations could become increasingly more costly in the coming months and could be far more difficult to settle as OSHA will have increased bargaining power once the fines are raised.
Review the proposed revisions to the Guidelines and submit comments regarding their strengths, weaknesses, and potential impact on your business.
Review your organization’s safety and health programs and consider taking proactive measures to create a program that includes the elements of the guidelines. Although an initial administrative and financial investment will likely be required, creating a safety culture usually pays dividends — improving worker safety and morale, decreasing workers’ compensation costs, and decreasing the possibility of receiving OSHA citations.