The Hidden Costs of an OSHA Citation

By Courtney Malveaux on

Congress took employers by surprise when it increased Occupational Safety and Health Administration (“OSHA”) penalties nearly 80 percent in 2016. Today, a Serious violation can fetch a maximum penalty of $13,260, and a Willful or Repeat violation can cost up to $132,598. Citations often include multiple items, which can multiply these figures.

When construction companies or other industrial employers receive Serious citations, they often rush into an informal conference with OSHA, without considering potential legal defenses they can raise. When the agency representative offers a large monetary penalty reduction in settlement, it can sound like a good deal. But saving several thousand dollars and moving on quickly may cost much more over the long term.

For many employers – – especially in the construction industry – – the greatest hidden cost is the loss of business opportunity. Many construction companies bid to prequalify or perform work for federal or state Departments of Transportation or other agencies. Agencies commonly ask prospective contractors to report Serious citations they have received. When a prospective contractor exceeds a preset threshold, the agency awards it to another, sometimes costing the contractor hundreds of millions of dollars of work.

Large energy, chemical and manufacturing companies can have similar demands, and will not do business with contractors with too many Serious violations on their records. They also judge applicants on their Experience Modification Ratios (“EMR”), which can be based on illnesses and injuries recorded on OSHA 300 forms.

Taking a cut on the monetary penalty while allowing OSHA to enter a Final Order with a violation on record can also set an employer up for a potential “Repeat” violation, which can lead to potential tenfold penalty increases if OSHA finds a repeated violation of the same standard or same activity, usually within a three- to five-year period. Large employers with complex operations and multiple worksites are particularly vulnerable to “Repeat” violations, and generally they are the employers that receive penalties exceeding $1 million.

A “Serious” designation may prove more costly than the few thousand dollars saved by early settlement. Taking a critical look at the legal merits of the citation – – and considering a contest if a viable defense is available – – is often the smart play.

Jackson Lewis attorneys are available to advise and represent employers facing OSHA citations.

Senate Hearing on Presidential Nominees Including OSHA

By Tressi L. Cordaro on

On January 30th the Senate Health, Education, Labor and Pensions (HELP) Committee announced that it would hold a hearing on February 6th for several of President Trump’s nominees, including Scott Mugno, the President’s nominee for Assistant Secretary of Labor for OSHA.

Mugno was first nominated in 2017 and a confirmation hearing was held before the HELP Committee in December 2017.  After failing to bring his nomination to a vote before the expiration of the Senate term, he was renominated in 2018 and then was renominated again earlier this year when the Senate failed to vote the second time.

This hearing is a markup so additional hearing testimony is not expected from the nominees listed on the hearing agenda.  The expectation would be that the nominees would clear the committee, however, there remain concerns that Mugno’s confirmation is unlikely due to the current political environment.

The upcoming hearing will include other Department of Labor nominees as well, such as Cheryl Stanton, the President’s nominee for Administrator of the Department of Labor’s Wage and Hour Division.

 

OSHA Issues Final Rule Revising Electronic Recordkeeping Regulation

By Tressi L. Cordaro on

Today OSHA published the final rule revising the Improve Tracking of Workplace Injuries and Illnesses regulation promulgated under the Obama administration.  The final rule aligns with the proposed rule and rescinds the requirements for establishments with 250 or more employees to electronically file information from OSHA Forms 300 and 301. As is currently the requirement, these establishments will continue to submit information from their Form 300A.  The final rule now requires all covered employers to electronically file submit through OSHA’s Injury Tracking Application (ITA) only the 300A Form.

In the final rule, OSHA emphasized,

Elimination of the requirement that establishments with 250 or more employees submit information electronically from their OSHA Forms 300 and 301 – a requirement that has not yet been enforced – does not change any employer’s obligation to complete and retain injury and illness records under OSHA’s regulations for recording and reporting occupational injuries and illnesses. The final rule also does not add to or change the recording criteria or definitions for these records.

The agency received 1,880 comments to the proposed rule and some commenters expressed concerns over the possible publication of the electronic information submitted to OSHA.  In response, OSHA stated that “…the agency takes the position that these data are exempt from public disclosure under FOIA.”  Other commenters raised concerns over the application of the regulation to employer drug testing and incentive programs.  OSHA made clear that the regulation does not ban drug testing or prohibit incident-based incentive programs.  OSHA stated that Section 1904.35(b)(1)(iv) of the regulation

 …merely prohibits employers from implementing these programs to penalize workers “for reporting a work-related injury or illness.” Id. (emphasis
added). On October 11, 2018, OSHA issued a memorandum that explained this regulatory text and OSHA’s position on workplace incentive programs and post-incident drug testing. See U.S. Dep’t of Labor, Clarification of OSHA’s Position on Workplace Safety Incentive Programs and Post-Incident Drug Testing Under 29 CFR § 1904.35(b)(1)(iv) (Oct. 11, 2018).

Additionally, under the final rule OSHA is amending the regulation to require covered employers to submit their Employer Identification Number (EIN) electronically along as part of their submission to the agency. According to OSHA, “many commenters agreed with OSHA that collection of the EIN would enhance the utility of the data and therefore improve worker safety and health. Several commenters provided specific examples of how the EIN can be used by OSHA for research purposes, such as identifying employers with patterns of injuries…and matching against other databases that contain the EIN to add characteristics to the data….”

The regulation now requires that for each establishment that is subject to the electronic filing requirements, the employer must provide the EIN used by the establishment.  The compliance  date for employers providing their EIN is March 2, 2020.  So, for the 2018 300A submissions that are due to be electronically filed no later than March 2, 2019 the EIN information will not be required.  Beginning March 2, 2020, OSHA will require employers to provide the EIN for each establishment filing the 2019 300A Form.

While these revisions are generally supported by employers, not all interested parties support the revisions to the Obama era regulation.  Some labor groups have raised the concern that since the review and approval of this final rule by the Office of Information and Regulatory Affairs (OIRA) occurred on January 18, 2019 it was conducted during the government shutdown when OIRA lacked funding.  And, since OIRA is funded from the  Treasury and General Government Appropriations, which has not been appropriated by Congress, it violated the Antideficiency Act, which prohibits the government from spending if funds have not been appropriated by Congress.  It is unclear whether any party will take legal action, but it seems to be something considered by those who oppose the revisions to the regulation.

 

U.S. House Committee to Focus on Workforce Protections

By Courtney Malveaux on

Signaling a renewed emphasis on workforce protections at the opening of the 116th Congress, the U.S. House of Representatives has changed the name of its committee with jurisdiction over labor matters back to the Committee on Education and Labor. It was called the Committee on Education and the Workforce when Republicans held the majority in the House. The Committee is headed by Chairman Robert C. Scott (D-Va.).

Click here to read the full article.

Starting January 24th Employers Face Higher OSHA Penalties

By Tressi L. Cordaro on

Despite no federal funding, it appears that the Office of Federal Register is operational.  Today, the Federal Register published the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2019. This final rule increases civil penalties the Department of Labor assesses including those assessed by OSHA.  The rule is effective today and the increased penalty rates will apply to any penalties assessed after the effective date of the rule.  So beginning tomorrow, OSHA civil penalties will increase.

Employers who have open and ongoing OSHA inspections can expect that any citations issued by OSHA after today will reflect the increased penalties.

The new 2019 maximum penalties are as follows:

  • Other-than-Serious: $13,260
  • Serious: $13,260
  • Repeat : $132,589
  • Willful: $132,589

Reminder to Employers to Post and Electronically File 300A Forms

By Tressi L. Cordaro on

For employers who are required to maintain work-related injury and illness records, its that time of year again. Employers covered by OSHA’s recordkeeping rule are required to prepare and post the OSHA Form 300A, “Summary of Work-Related Injuries and Illnesses,” beginning February 1 and keep the form posted until April 30.  The form must be posted at each establishment covered, in a conspicuous place where notices to employees are customarily posted.

Prior to posting, a company executive must review the OSHA 300A and certify that “he or she has examined the OSHA 300 Log and that he or she reasonably believes, based on his or her knowledge of the process by which the information was recorded, that the annual summary is correct and complete.”

Under OSHA’s rule, a company executive can be one of the following:  (1) an owner of the company (only if the company is a sole proprietorship or partnership); (2) an officer of the corporation; (3) the highest ranking company official working at the establishment; or (4) the immediate supervisor of the highest ranking company official working at the establishment.

OSHA can cite an employer who fails to post the OSHA Form 300A as required.  Employers should take steps now to ensure they are fully compliant.

Additionally, for those employers covered by OSHA’s Improve Tracking of Workplace Injuries and Illnesses regulation, this year the electronic submission of each establishment’s 2018 300A Annual Summary is required to be filed no later than March 2, 2019 using the Injury Tracking Application on OSHA’s website.  This date differs from past years as the phase in period for the regulation comes to an end.  For each year hereafter, the 300A will be required to be electronically filed no later than March 2.

Since last year OSHA  has also required those employers in state plans that have not adopted the Improve Tracking of Workplace Injuries and Illnesses requirements to submit their 300A Forms.  Although the agency has acknowledged that since OSHA does not have jurisdiction in those states with state plans, it is prohibited from enforcing the regulation and can not issue citations to employers for failing to electronically submit the 300A, and since those certain state plans have yet to adopt the regulation they are equally prohibited from enforcing the requirement and can not issue citations to employers. Be sure to check with your state plan to determine whether they have fully adopted the new requirements.

More information, including a section on Frequently Asked Questions, on the electronic submission of the 300A Forms can be found on OSHA’s website.

OSHA Penalties Increasing Once the Government Reopens

By Tressi L. Cordaro on

While much of the rest of the government is shutdown, the Department of Labor (“DOL”) is hard at work.  OSHA which is an agency within DOL is one of the few agencies that is fully funded and operational.  On January 15th, OSHA issued a pre-published version of its Federal Register notice for the increase in civil penalties for violations of OSHA standards and regulations to adjust for inflation. The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act) requires the Department to annually adjust its civil money penalty levels for inflation no later than January 15 of each year.  However, due to the government shutdown, the Office of the Federal Register is closed and until the government reopens, the notice will not published.  Meaning that OSHA penalties will not increase until the the date of publication of the Federal Register notice.  The effective date of the new penalties will be the date of publication and the increase will only apply to citations issued after the effective date of the increase and for the remainder of 2019.

OSHA penalties for all classifications will increase by $326.  For other-than-serious, serious and failure to abate violations, penalties will increase from $12,934 per violation to $13,260 per violation.  The penalty for willful and repeat violations increased from $129,336 to $132,589.

The 2019 maximum penalties are as follows:

  • Other-than-Serious: $13,260
  • Serious: $13,260
  • Repeat : $132,589
  • Willful: $132,589

The penalty increase applies to Federal OSHA states, however, OSHA expects that states operating their own occupational safety and health program will align penalty structures with Federal OSHA so that such programs are equally effective as Federal OSHA.  While this is OSHA’s expectation there has been little adjustment from various state plans to align with the increase in penalties.  For example, North Carolina and Kentucky still maintain a $7,000 maximum fine for serious violations and $70,000 for willful or repeats.

OIG Continues Criticism of OSHA’s Severe Reporting Initiative

By Tressi L. Cordaro on

In September, the Office of Inspector General (OIG) issued a draft report criticizing OSHA for not having appropriate controls in place to ensure employers report severe injuries and abate hazards. The September OIG report recommended to OSHA that the agency develop formal guidance and train staff on how to detect and prevent underreporting, consistently issue citations for late reporting, clarify some of its guidance and emphasize the need to conduct inspections for all incidents classified as Category 1.

OSHA pushed back on OIG in its response stating that it is not OSHA’s responsibility to ensure employer’s report injuries, rather it is an employer’s responsibility to do so and that there is no requirement for employers to abate hazards as part of the reporting of severe injuries.

In a separate report issued last month, Top Management and Performance Challenges Facing the U.S. Department of Labor, OIG again criticized the agency for failing to ensure that employers correct hazards when they report severe injuries to OSHA.

“OSHA needs to complete its initiatives to improve employer reporting of severe injuries and illness, and enhance staff training on abatement verification, especially of smaller and transient construction employers. OSHA also needs to complete the development of its evaluation and analysis program.”

OSHA maintains that the only obligation on an employer is to report the appropriate severe injury within the timeframes required by the standard and that there is nothing requiring employers to provide evidence of the abatement of hazards.

 

Workplace Injuries and Illnesses Continue to Decline

By Courtney Malveaux on

Workplace safety is moving in the right direction, according to employers and the Bureau of Labor Statistics (BLS). Based on an annual survey, BLS estimates that private industry employers had 45,800 fewer cases of nonfatal injuries and illnesses among full-time employees in 2017 as compared to the year before.

All measures – – including missed workdays, OSHA recordable incidents, injury-caused work restrictions – – have declined steadily this century. Employers had 2.8 total recordable cases per 100 workers, barely half the number reported in 2003. Importantly, all sectors surveyed showed a decrease, including manufacturing, construction, health care, transportation and warehousing. That means fewer days missed, fewer injuries, and fewer workers’ compensation claims.

The manufacturing sector had particularly good news, with median days away from work dropping to eight, a day fewer than in 2016. An area where manufacturers can focus is its leading cause of injury, sprains, strains and tears, which did not see a decrease in the past year.

Years in the Making…OSHA Finalizes Crane Operator Requirements for Construction Industry

By Tressi L. Cordaro on

Roughly eight years after the original promulgation of the final standard 29 CFR part 1926, Subpart CC – Cranes and Derricks in Construction, OSHA finally revises the requirements for operator certification. In August 2010 OSHA issued the final cranes and derricks in construction standard. As part of that standard, crane operators were required to either be certified or qualified (depending on the option elected by an employer) by November 10, 2014. 29 C.F.R. § 1926.1427(k). On February 10, 2014, OSHA proposed a three-year extension to the operator certification deadline until November 10, 2017 and requested public comment. The extension was due, in part; to issues pertaining to the requirements in the standard addressing crane operator certification that arose shortly after OSHA issued the final rule. After the final standard was issued, OSHA took the position that an operator is qualified to operate a particular piece of equipment if the operator is certified for that type and capacity of equipment or for higher-capacity equipment of that type. Therefore, an operator certified to operate a 100-ton hydraulic crane may operate a 50-ton hydraulic crane but not a 200-ton hydraulic crane.

This interpretation created significant concern for many industry representatives, including employers and unions, and firms that offer crane operator training. In November 2012, International Union of Operating Engineers (“IUOE”) petitioned OSHA to reverse its interpretation and to amend the “Capacity and Type” language in 1926.1427(b)(1)(ii)(B) and 1926.1427(b)(1).

In response to these industry concerns and ACCSH’s recommendation that the Agency delay implementation of the operator certification deadline OSHA issued a three-year extension for operator certification from November 10, 2014 to November 10, 2017, which was further delayed by a year in August 2017 to November 10, 2018 while the agency gathered additional public input on the issue.

In May of this year OSHA issued a Notice of Proposed Rulemaking (NRPM) to update the cranes and derricks in construction standard seeking to revise the operator certification requirements in several major respects.  In the NPRM OSHA proposed to amend 29 CFR 1926 subpart CC by revising sections that address crane operator training, certification/licensing, and competency. OSHA sought to clarify training requirements for operators; to remove certification-by-capacity from certification requirements and to extend an employer’s duty to evaluate operators for their ability to safely operate equipment.

On November 9, 2018 OSHA issued a final rule revising the Cranes and Derricks in Construction standard addressing operator qualifications and certification. The final rule is effective on December 10, 2018, except the amendments to 29 CFR 1926.1427(a) and (f) (evaluation and documentation requirements), become effective February 7, 2019.

Evaluation of Operators

In some respects the final rule undermines the intention of the initial negotiated rulemaking committee, C-DAC. It was C-DAC’s intention that certification was a definitive means of ensuring that operators were properly trained and competent to safely operate equipment covered by the standard. The standard as revised requires employers to continue to evaluate an operator’s skill and competency to operate equipment safely. According to OSHA,

The certification provides an independent assessment of general baseline knowledge and skill and the employer evaluation focuses on specific knowledge and skills needed for the safe operation of particular equipment for particular tasks.

Similar to the proposed standard, the final standard is written in performance oriented language and does not establish what specific skills must be assessed but provides a list of performance-based criteria that employers must evaluate an operator’s skills and knowledge, such as safety devices, operational aids, software and lifting capacity, boom length, attachments, counter weight set up.  While the individual evaluating the operator does not need to be certified or have previous experience as an operator, the evaluator must have the knowledge, training and experience necessary to conduct the evaluation. The evaluation must be documented and maintained while the operator is employed by an employer.

Certification by Capacity of Crane

The final rule eliminates any requirement that operator certification be based on the lifting capacity of the crane. The final standard permits accredited testing organizations to certify operators based on the type of crane or based on the type and capacity of the crane.  According to OSHA,

The ‘type, or type and capacity’ language was requested by Crane Institute Certification and recommended by ACCSH…The language has been included in the final rule to make clear that while all certifying bodies must certify by type of crane for their certifications to meet OSHA’s requirements, testing organizations may also choose to specify for their certifications different levels of rated lifting capacity of cranes.

The final rule is effective on December 10, 2018, except the amendments to 29 CFR 1926.1427(a) and (f) (evaluation and documentation requirements), become effective February 7, 2019.

LexBlog