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May 11 — Employers with safety incentive programs that don't meet OSHA requirements can be cited for rule violations under a sweeping new record-keeping final rule the Labor Department announced May 11.
The new rule, which takes effect Aug. 10, also requires about 466,000 work sites to electronically submit annual injury and illness log data to the Occupational Safety and Health Administration, enabling the agency to post on its public website summaries of each establishment's records. The electronic submission requirement starts taking effect in 2017 and will be phased in through 2019.
“We are very comfortable we have the statutory authority to do this,” OSHA administrator David Michaels said about the regulation's provisions during a May 11 briefing with reporters.
While the rule requires electronic filing for about one-third of the establishments now required to maintain OSHA injury and illness logs, the rule doesn't change what injuries or illnesses employers are already required to record, Michaels said.
The rule's incentive program provisions are intended to encourage employers to set up programs for workers to notify supervisors of on-the-job injuries and illnesses, Michaels said.
During the drafting of the rule, which began in 2013 (78 Fed. Reg. 67,254), worker advocates, such as the AFL-CIO, expressed concerns that because worksite information would be widely available online, employers would try to keep their numbers low by discouraging reporting.
Employers said a prohibition on some safety programs could prevent drug testing following accidents and zero-tolerance policies (199 DLR A-11, 10/15/14).
The rule doesn't offer details on what incentive provisions would trigger a citation.
“We will look at them on a case-by-case basis,” Michaels said.
Past OSHA guidance, such as the 2012 “Fairfax memo,” had cited examples of programs that offer financial bonuses for workers who haven't had a recordable injury (55 DLR A-6, 3/21/12). And currently, OSHA is challenging in federal court a U.S. Steel program in which workers who don't report an injury within seven days may be disciplined (Perez v. U.S. Steel Corp., D. Del., No. 16-00092, 2/17/16) (37 DLR A-4, 2/25/16).
The new rule (RIN:1218-AC49) seems certain to face its own federal court challenge.
The U.S. Chamber of Commerce's senior vice president for labor issues, Randy Johnson, said in a May 11 statement that OSHA “does not have the authority to enforce the changes it has made to the enforcement of whistleblower claims.”
As for the posting of employer information on the OSHA website, Johnson said, “The agency’s excessive reporting requirements will lead to employers being falsely branded as unsafe and will not reflect a company’s commitment to maintaining a safe workplace.”
Two sets of employers will have to comply with the electronic record-keeping provisions; all establishments with 250 or more workers—about 34,000 locations— and another 432,000 establishments in designated high-hazard industries with 20 to 249 workers.
The high-hazard industries include construction, manufacturing, wholesale trade, utilities, agriculture, forestry, fishing, hunting and about 60 smaller industry groups, including grocery and department stores, many types of residential heath-care facilities, freight trucking and warehousing.
OSHA estimates the annual compliance cost for employers once the rule is fully implemented at $15 million, with at least $7.2 million spent by employers with 250 or more workers and at least $4.6 million by workplaces with 20 to 249 employees.
In addition to the annual costs, OSHA estimated employers will spend about $16.6 million in first-year costs to comply with the rule. The costs include $8 million for employers to buy and put up new posters explaining the rule to workers.
Because the rule's cost is less than $100 million annually, it can't be quashed by Congress and a president using the Congressional Review Act.
OSHA will phase in implementation of electronic reporting. The transition will provide time to educate employers about the reporting system, Michaels said.
In the first year, establishments are mandated to submit only the information from the Form 300A by July 1, 2017, and continue the practice annually.
In the second year, establishments with 250 or more employees must also submit information from Forms 300 and 301 by July 1, 2018, and continue the practice every year.
In the third year, the reporting date is moved up to March 2, 2019, and in subsequent years remains March 2.
OSHA is still working out the technical aspects of how reports will be filed. After reports are submitted, OSHA will clean the files of information identifying individual workers and post data online for each establishment, Michaels said.
While critics of the rule have questioned whether OSHA, which hasn't seen a significant budget increase in several years, has the staff to handle the additional workload, Michaels said OSHA would be able to process the electronic filings in a timely way.
OSHA's proposed rule had called for large employers to submit reports quarterly. Because of concerns about the additional workload for employers and the usefulness of quarterly reports, OSHA opted for annual reports, the rule says.
Until this regulation, OSHA didn't have easy access to employer injury and illness records, Michaels said. Typically, OSHA would only review the forms if a site was inspected.
With the public and OSHA now able to see annual records, anyone will be able to conduct their own analysis of the injury and illness data, Michaels said. The openness should improve employer safety efforts since companies will be able to compare themselves with similar businesses.
“No employer wants to be seen, publicly, as operating a dangerous workplace,” Michaels said.
Data will be posted for individual establishments, not entire companies, Michaels said. For large companies with multiple sites, outside researchers should be able to calculate corporate-wide numbers by using data from individual establishments.
The open data worries many business groups.
National Association of Manufacturers' Vice President for Labor Policy Rosario Palmieri, said in a May 11 statement that the regulation will lead to “unnecessary public shaming,” a complaint similar to industry objections to OSHA press releases on employers cited for violations (48 DLR C-2, 3/11/16).
The regulation “is a misguided attempt at transparency that sacrifices employee and employer privacy, allows for distribution of proprietary information and creates burdens for all manufacturers,” Palmieri said.
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