The Bipartisan Budget Act of 2015 was signed into law by President Obama on November 2, 2015. Section 701, “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015” requires OSHA to increase its civil penalties for the first time since 1990. A one-time “Catch Up Adjustment” will occur in 2016 with penalties increasing up to a cap of 150%. Increases will be calculated based on the Consumer Price Index (CPI) between 1990-2015 and indications are that increases will be significant but less than the 150% cap. The next step is that Dr. Michaels, Assistant Secretary of Labor for OSHA, will adjust civil monetary penalties through an interim final rulemaking and the adjustment will come into effect by August 1, 2016 at the latest.

The Act contains an exception which allows an Agency to adjust civil monetary penalties by less than the required amount if certain provisions are met and ultimately approved by the Director of the Office of Management and Budget (OMB). However, this seems an unlikely direction given Dr. Michaels statement last month before the Committee on Education and the Workforce, Subcommittee on Workforce Protections:

Simply put, OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business.

We will continue updates as they become available.

The Bipartisan Budget Act of 2015 contains a few surprises for employers covered by the OSH Act. To date, OSHA’s monetary penalties have not been subject to inflationary increases and, in fact, have been static since 1990. The proposed “Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015” which applies specifically to the OSH Act shakes up the status quo. If approved, OSHA will be required to adjust its penalties annually based on the Consumer Price Index (CPI). Beginning in January 2017, annual updates to civil penalties will be published each year by January 15th in the Federal Register. These adjustments will not require rulemaking.

However, the Act’s immediate impact is twofold. Section 701 contains a “catch up” provision which increases civil monetary penalties, based on a formula, up to a cap of 150%. So according to the Bipartisan Budget Act “a penalty now set at $10,000 could not increase to more than $25,000.” Further, the Act provides steps to “speed implementation” of these changes so that if approved, the first adjustment to penalties would be published by July 1, 2016 (at the latest) and be effective by August 1, 2016 (at the latest.)

We will be following these developments closely and bringing you updates. A summary of the Bipartisan Budget Act of 2015 can be read here.

At a House subcommittee hearing on October 7, the head of the Occupational Safety and Health Administration, Dr. David Michaels, faced a grilling from Republican lawmakers over recently issued guidance memoranda for agency inspectors and examples of allegedly over-the-top enforcement actions. To read the full article, written by Tressi Cordaro, click here.

 

 

The recent Review Commission case of Sec’y of Labor v. Lake Erie Constr. Co., OSHRC, No. 11-0146 still leaves Lake Erie Construction Company waiting for a final decision on the merits. However, the Review Commission case is already a landmark decision because it overrules a 34 year-old precedent established in the case of Gerard Leone & Sons, Inc., 9 OSHC 1819 (OSHRC 1981.) (“Gerard Leone”). Gerard Leone involved the application of the construction motor vehicles standard, § 1926.601(a), which regulates such things as brake lights, audible warning devices and seat belts on motor vehicles used in construction. In Gerard Leone the Commission held in a 2-1 decision that § 1926.601(a), “limits the standard’s applicability by vehicle and not by location.” Id. at 1820. In short, that decision held that the requirements for motor vehicles applied if the vehicle at issue is the type that operates off-road regardless of whether the location was on-highway but closed to the public.

In the Lake Erie case, an employee was electrocuted while working on a project which involved removing guardrail posts along a highway that was closed to traffic at the time of the accident. The guardrail posts were removed using a “pounder truck,” part of which either contacted or came close to contacting power lines, causing electricity to arc or travel to an “Attachment” and chain, thus electrocuting the employee who was holding the chain. Lake Erie received a citation for $70,000 for a willful violation of 29 C.F.R. § 1926.600(a)(3).

The question at issue was whether or not the “pounder truck” was covered under Subpart O, 29 C.F.R. § 1926.601(a) which states:

Coverage. Motor vehicles as covered by this part are those vehicles that operate within an off-highway jobsite, not open to public traffic. The requirements of this section do not apply to equipment for which rules are prescribed in 1926.602.

(emphasis added.)

The Secretary argued that based on the precedent set in Gerard Leone, the pounder truck was the type of vehicle which operated off-road and therefore was a covered vehicle. Lake Erie’s counsel argued that since the accident occurred while the pounder truck was on a highway, it was not covered under § 29 C.F.R. 1926.601(a) and, therefore, the citation was invalid.

In 2012, Administrative Law Judge Sharon D. Calhoun affirmed the citation but reduced the penalty to $35,000. The judge decided, based on the binding precedent set in Gerard Leone, that the pounder truck was a covered vehicle. However, she added that she felt the decision in Gerard Leone was wrong and in its petition for discretionary review, Lake Erie counsel noted that similar doubts have been raised in other cases.

In reaching its decision, the Commission decided that “(s)pecifically, reading § 1926.601(a) as addressing the type of vehicle operated rather than the location of its operation is contrary to the provision’s language – ‘vehicles that operate within an off-highway jobsite, not open to public traffic.'” Other cases over the years have argued that the language of this provision is plain and deliberate – there is no reference to the “type” of vehicle, nor is there any discussion of vehicles that can operate within an off-highway jobsite. The provision simply refers to “vehicles that operate within an off-highway jobsite, not open to public traffic.”

The Commission’s decision on September 24, 2015 held “[W]e overrule Gerard Leone’s holding that the language of
§ 1926.601(a) applies to motor vehicles based on their particular type. Relying on the plain language of the provision, we now conclude that it covers motor vehicles based on the location of their operation, i.e. ‘within an off-highway jobsite, not open to public traffic.'”

The case has now been remanded to Judge Calhoun to determine “whether, at the time of the alleged violation, the pounder truck was a ‘[m]otor vehicle [] … that [was] operat[ing] within an off-highway jobsite, not open to public traffic.'”

You can read the full decision here.

The number of process safety management compliance inspections at oil refineries and chemical plants, as well as inspections involving workplace violence and ergonomics, are likely to increase under a new inspection strategy launched October 1 by the Occupational Safety and Health Administration. To read the full article, click here.

For the last several years, OSHA has expressed concerns regarding a host of employer practices it believes may result in underreporting of injuries and illnesses as depicted by several recent high-profile cases of alleged employer underreporting. Heightening OSHA’s interest is the position taken by some stakeholders that the annual injury and illness statistics published by the Bureau of Labor Statistics (BLS) underreports the true number of workplace injuries and illnesses due, in part, to employer incentive programs that discourage employees from reporting injuries and illnesses. The Agency has stated it will issue a final rule in the fall of 2015 that may make certain safety incentive programs illegal under OSHA standards and, just recently, OSHA sent such a proposed rule to the Office of Management and Budget (“OMB”) for review. If the Agency does issue this final rule, it may change the landscape for many employers who have had success with such programs in the past.

To read the full article, which I wrote for Wolters Kluwer’s Employment Law Daily, click here.

 

Under an exception to the rulemaking process, federal agencies may use legally nonbinding guidance documents to interpret regulations. This has led some U.S. senators not only to issue a broad pledge to restrict the practice when such guidance becomes a rule enforceable against a regulated community, but also to request that the Occupational Safety and Health Administration (OSHA) rescind guidance that newly interprets coverage under a rule aimed at preventing chemical disasters. To read the full article, written by Nickole Winnett, click here.

On October 5, 2015, OSHA submitted to the Office of Information and Regulatory Affairs (OIRA), a draft final rule for OSHA’s “Improve Tracking of Workplace Injuries and Illnesses.”  OIRA is the division within the President’s Office of Management and Budget (OMB) that reviews draft and final standards and regulations. Under Executive Order, all significant regulatory actions require OIRA review before agency actions can be implemented.  Generally, OIRA has up to 90 days to review a rule.

OSHA published a notice of proposed rulemaking for “Improve Tracking of Workplace Injuries and Illnesses,” in November 2013 to add electronic recordkeeping requirements that would require certain employers to electronically submit to OSHA injury and illness recordkeeping information on a quarterly or annual basis. Additionally, the proposed rule sought to establish a public searchable website where OSHA would make employers’ injury and illness records available to the general public.

In August 2014, OSHA issued a supplemental notice of proposed rulemaking to amend the proposed rule to include provisions that would (1) require that employers inform their employees of their right to report injuries and illnesses; (2) require that any injury and illness reporting requirements established by the employer be reasonable and not unduly burdensome; and (3) prohibit employers from taking adverse [termination, reduction in pay, reassignment to less desirable position] action against employees for reporting injuries and illnesses.

The submission of this draft final rule to OIRA is a strong signal that this rule is in final stages and once it clears OIRA OSHA will have the green light to issue a final rule in the Federal Register.  What does this mean for employers?  It means that OSHA anticipates publication of this final rule very soon, likely by the end of the year, and if that happens it is likely OSHA will aim to have this rule in effect in January 2016.

 

Federal OSHA’s Occupational Injury and Illness Recording and Reporting Requirements (effective January 1, 2015) require employers to report in-patient hospitalizations, amputations and loss of an eye within 24 hours. The Virginia Occupational Safety and Health (VOSH) regulation was intended to mirror the federal requirements but a legislative drafting error resulted in the reporting period for in-patient hospitalizations, amputations and loss of an eye being reduced to 8 hours. Recognizing its mistake, Virginia is suspending enforcement of the 8 hour reporting requirement until the statute is amended so long as incidents are reported within the 24 hour federal deadline.

OSHA announced this week a shift in how it will evaluate inspections, recognizing that inspections are not all equal and that more-complex inspections deserve more weight. The complexity of an inspection affects the amount of time, manpower and other resources required by OSHA and this new tiered inspection system will reflect this complexity. Under the new system, “Enforcement Units” will be assigned to an inspection; the simplest inspection will be one unit and the most complex inspection could be as many as nine units. Dr. Michaels believes that this will allow OSHA to focus on “more impactful inspections” rather than the number of inspection completed each year.

The practical implication for employers is that starting October 1, 2015, they can expect to see an increase in the number of complex inspections performed by OSHA.  Specifically, OSHA notes that it will perform more inspections involving musculoskeletal disorders, chemical exposures, workplace violence, and process safety management violations. With a greater focus on these complex safety and health inspections, NOW is the time to review your policies and procedures to ensure that they meet all OSHA requirements.

More details are available here .