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Vedder Thinking | Articles OSHA: Summer Fun, Employers Feel the Burn


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If asked to write an essay about what they did over the summer, the good folks at OSHA would have quite a lot to cover this fall. In fact, it would be difficult to know where to begin with so many rules announced and enforcement actions taken; so, let's start with one of the things that makes the world go 'round—money.

New Penalties on Tap

OSHA's new penalty levels took effect August 1, with the maximum penalty for serious violations increasing from $7,000 to $12,471. The maximum penalty for willful or repeated violations, meanwhile, rose from $70,000 to $124,709. Citations issued by OSHA after August 1 will be subject to the new penalties if the related violations occurred after November 2, 2015. With OSHA likely to regularly impose $12,471 penalties for serious violations, employers may decide to settle less and contest more. While many employers may have unwittingly set themselves up for hefty, reputation-damaging repeat citations by settling low-dollar citations because they figured litigation was not worth the cost and disruption, the new penalty structure is likely to lead employers to re-think how they respond to citations. In the past, an employer could pay $42,000 (or less if OSHA is open to discounting) to resolve six citations; now, that same employer would be looking at having to cough up nearly $75,000. OSHA, meanwhile, will presumably use its newfound ability to assess "statement-making" fines on those companies perceived as taking the "low road" with respect to their commitment to employee health and safety. While $210,000 for three repeat (or willful) citations is without question a big deal, a fine coming in just under $375,000 hits a good deal harder; indeed, OSHA will not have to try very hard to impose fines in excess of $1 million upon those companies it considers recalcitrant or serial violators.

Taking Aim at Incentive Programs

While OSHA's dislike of safety bonus and incentive programs that tie compensation and/or benefits to injury reports is well-known (see the "Fairfax Memo" issued in 2011), the agency had few options other than opening a separate recordkeeping investigation when it came across a policy or procedure it did not like. Now, however, employers can expect to receive citations pursuant to §1910.35 if and when OSHA determines that a safety bonus or incentive program will discourage or deter a reasonable employee from reporting a work-related injury or illness. Unfortunately, OSHA has yet to issue any sort of guidance as to what sorts of practices it considers problematic or those that would pass muster. Instead, agency leadership has said only that inspectors will look at rules and programs on a case-by-case basis. It also remains to be seen whether citations issued under the new rule will typically be classified as serious or other-than-serious. Either way, employers would be well-advised to take a close look at their safety incentive programs now, given that the new mandate took effect in August.

Immediate Injury Reporting Rules

Incentive programs are not the only way OSHA contends that employers deter employees from reporting injuries. The agency similarly takes a dim view of rules that penalize employees who fail to immediately report work-related injuries or illnesses. While employers can point to a variety of reasons why such rules make good sense—promptly abating the hazard that may have caused an injury, investigating while evidence is fresh, etc.—OSHA is not persuaded. Indeed, the agency recently filed a lawsuit in federal court against U.S. Steel challenging the company's seemingly reasonable requirement that employees report injuries and/or illnesses within seven days (Perez v. US Steel, No. 16-00092, D. Del. 2016). Any employer who regularly disciplines employees who fail to immediately report an injury or illness should expect to find themselves in OSHA's crosshairs sooner rather than later.

Temporary Workers Need Training, Too

OSHA continues to emphasize the obligation of the host employer to protect and adequately train contract workers. If OSHA's Temporary Worker Initiative did not catch your attention, perhaps the fact that the agency fined an Ohio auto parts manufacturer $3.42 million for willfully exposing workers to machine hazards after two workers suffered severe injuries in separate incidents in Hebron, Ohio, will. During the ensuing inspection, OSHA issued 57 violations to the host employer in addition to proposing penalties of $7,000 to three staffing agencies for failing to provide required safety training.

Crowded Aisles, Hefty Fines

Dispelling any notion that big fines are reserved for heavy industry, OSHA continues to levy eye-popping fines on retailers who routinely fail to maintain good housekeeping practices. Like clockwork of late, OSHA has issued fines in excess of $100,000 (and in some cases $1 million) to discount retailers like Dollar Tree, finding blocked exits, improperly stored merchandise and other easily avoidable violations at store after store. Most recently, OSHA issued a $101,420 citation to popular home goods retailer Pier 1 for problematic merchandise storage practices. Good housekeeping is more than a magazine—it's something that should be a standard operating procedure for retailers and manufacturers alike, especially if OSHA has already cited the employer for failing to comply with the applicable standards.

New Rx for Preventing Workplace Violence

OSHA has made the prevention of workplace violence in healthcare facilities a focal point for some time, using the General Duty Clause to cite employers that the agency found to have failed to adequately abate hazards in emergency rooms, psychiatric wards and other settings where employees were known to be at risk due to the nature of their work. Without a specific standard, however, healthcare employers have struggled at times to determine what, exactly, OSHA expects of them. That should change when OSHA issues a new rule this fall (or winter) expected to set forth specific requirements for healthcare employers regarding violence prevention. Until then, healthcare employers should continue to conduct hazard assessments for those areas of their operations where violence is a recognized problem and take steps to protect those employees exposed to potential harm.

Have You No Shame?

And finally, if accessible, electronically submitted injury and illness records were not enough, OSHA has announced it will begin making public the hospitalization and amputation (as well as enucleation, presumably) information that employers are required to submit following a workplace incident. The information, made available in spreadsheet format, will include the names and addresses of the businesses that filed reports, as well as information about the event, including the cause of the event and the injured body part(s). OSHA is not expected, significantly, to state in the spreadsheet whether the agency contends the employer violated a standard or the outcome of any appeal—leaving readers free to draw whatever conclusion about the employer they may wish.

If you have any questions regarding the topics discussed in this article, please contact Aaron R. Gelb at +1 (312) 609 7844 or any Vedder Price attorney with whom you have worked.

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