In 2016, OSHA is likely to engage in a series of far-reaching regulatory changes – from increased fines to stepped-up inspections – that could affect countless numbers of companies of all sizes. Businesses that don’t prepare for them now could be facing increased scrutiny as well as extra expenses.
Fines are rising
One looming change will hit some businesses in the wallet: the first increase in OSHA fines since 1990. In late 2015, OSHA was authorized to increase the monetary level of its system of fines, and the agency wasted no time in taking advantage of its newfound freedom. Expected to be implemented by August, OSHA will likely raise fines by an estimated 80%, a sum that many companies, already battered by an up-and-down economy, will find onerous.
Under the new schedule, for example, the fine for a “serious” violation – a workplace hazard that could cause an accident or illness that would most likely result in death or serious physical harm – could rise to $12,700, from the current $7,000 maximum. A “willful” violation – where an employer has either knowingly failed to comply with a legal requirement or acted with plain indifference to employee safety – may jump to $127,000 from the current $70,000 maximum. Businesses that routinely use chemicals in the workplace, construction companies, and manufacturers of chemicals may be most at risk for these new, higher fines.
The news doesn’t end there: the changes also gave OSHA the authority to raise fines annually to keep up with inflation. Given the specter of hefty fines for violations, companies may wish to consider instituting or stepping up the pace and depth of their self audits, or hiring an outside consultant to ensure they meet or exceed OSHA standards.
Stepped-up rapid response investigations
OSHA’s revised rules concerning accidents and the resulting rapid response investigations, which became effective January 1, 2015, have also opened up new concerns for employers.
The rules mean that any work-related fatality, inpatient hospitalization, amputation, or loss of an eye must be reported to OSHA within hours, under strict timeframes specified by the agency. Previously, only fatalities and inpatient hospitalizations of three or more employees were reportable.
After OSHA receives an accident report, the agency typically “triages” the report as a Category 1, 2, or 3, which determines whether it warrants an on-site inspection or a new “Rapid Response Investigation.”
“Category 1” reports – which automatically trigger an on-site inspection – include fatalities, hospitalizations of two or more employees, repeat offenders, hazards covered by an emphasis program, imminent dangers, or injuries to minors.
“Category 2” reports, which may trigger an on-site inspection at the discretion of an OSHA area director, generally include incidents involving some combination of continued exposure to a hazard; the failure of a safety program; exposure to serious hazards, like falls; or other conditions.
If a report does not meet the criteria for Category 1 or 2, OSHA will generally open a Rapid Response Investigation, or RRI. The agency will contact the reporting employer to learn more about the incident with the expectation that the employer will conduct its own investigation into the root cause of the incident, determine how to prevent similar incidents from happening in the future, and report these findings back to OSHA in about a week.
There are a number of concerns associated with RRIs. First, since the rules were implemented, we have seen a sizable increase in the issuance of RRI requests. Second, a company’s response to an RRI request can exacerbate the problem, particularly if OSHA believes the reporting company is trying to whitewash the incident, perhaps by simply blaming the victim instead of thoroughly investigating the incident and documenting the findings.
If OSHA is not satisfied with an employer’s response, the agency may mount its own inspection of the incident, which can result in the uncovering of additional violations that could land the business in even hotter water. To minimize the likelihood of this, companies may consider working with outside advisors who offer OSHA and RRI seminars that focus on best reporting and other practices.
Deeper OSHA investigations are likely
Up until the end of 2015, there was a perception that OSHA inspectors shied away from time-consuming, “complex” investigations because the inspectors’ performance reviews were heavily weighted toward the number of cases they closed in a given period. But in September 2015, Assistant Secretary of Labor for OSHA David Michaels revised the inspector review process, recognizing the fact that some investigations, like an accident at an oil rig, will take longer than others, such as a trench site accident.
Under the new review rules, so-called Enforcement Unit points are awarded, depending on the complexity of an investigation. This way, an inspector who does a lot of simple reviews may get a lot of single-point scores, while someone who tackles complex jobs will not be at a disadvantage since they’ll be awarded higher, four-or-five-point scores for each complex assignment, such as hazardous material and ergonomic injury cases.
We’re already noting more investigations of chemical exposure, musculoskeletal accidents, especially among chemical manufacturing facilities and oil refineries. Companies should be aware of the stepped-up OSHA investigation activity and may wish to consider conducting their own self-audits – using their own experts or retaining a consultant – so their house is clean when OSHA comes knocking at the door.
New HazCom requirements
In 2012, OSHA issued a new Hazard Communication Standard, requiring employers to take measures to prevent illness or injury that could occur when working with hazardous materials.
The new regulations have been phased in, and some employers may not yet be aware of all the new requirements that take effect on June 1, which include additional employee training for hazardous materials. Additionally, new regulations have been implemented regarding new material safety data sheet forms that must be made available to workers, informing them of the properties and hazards of certain substances.
Employers should review the new standard, ensure they’re in compliance, and can assume that there will be a big jump in OSHA HazCom inspections.
What lies ahead
About two years ago, with prompting from the Obama administration, OSHA tried to slash the eight-hour silica permissible exposure limit (PEL) from millions of particles per cubic foot to 50 micrograms per cubic meter (overexposure to silica dust – a sand-like substance often released in construction or home renovation projects – has been tied to cancer and other conditions).
The proposal, however, was effectively shelved in the wake of a large public outcry against the high costs and questionable benefits of the proposed rule. The current Administration has indicated a desire to reintroduce the proposals, although we think they’re likely to once again be shot down.
But another Obama initiative, reduced exposure to beryllium – a strong, light but highly toxic metal used in aerospace, defense, computer, nuclear, and other applications – may go through this year.
The current beryllium PEL is 2 micrograms per cubic meter, but OSHA is considering cutting that limit to as low as 0.1 microgram per cubic meter. Unlike the outcry over the silica PEL, there is broad agreement that even a minute exposure to beryllium can be deadly to humans. OSHA plans to hold hearings on its proposed Beryllium rule on March 21, and businesses should be prepared to comply with the new rule in the near future.
In the final analysis, employers should keep up with these and other regulatory developments, as they can potentially impact a wide range of activities. The activist stands taken by OSHA are likely to place a significant burden on business’ operating expenses, but the costs of non-compliance, or even being unprepared, are likely to be even greater.