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USA OSHA Company Wide Assessment Penalty Rules in Heath and Safety Enforcement in 2017

OSHA’s corporate-wide enforcement approach for companies that have multiple locations is quite concerning to safety managers nationwide, and for good reason. Where OSHA used to direct citations to a specific facility, their new corporate-wide penalty approach means companies with multiple facilities across many locations—such as national retail stores, grocery chains, manufacturers, and hotel chains—are particularly vulnerable to increased scrutiny.

Still, all companies should be wary. OSHA’s definition is broad, so if your organization is operating in more than one facility, you are a potential target.

So do you as a company or you as SUPERVISOR or MANAGER know

·        How to determine if your organization would be considered a multi-site organization under OSHA

·        How to assess the advantages and disadvantages of being considered a multi-site organization

·        The implications of companywide penalty assessment as it relates to:

  • the general duty clause
  • recordkeeping issues
  • the severe violator enforcement program (SVEP)
  • the whistleblower SVEP (WSVEP)
  • corporate safety training programs
  • training and audits
  • corporate-wide settlement agreements (CSA)
  • franchises
  • joint employer liability
  • record retention
  • contractor utilization issues

·        As a manager or supervisor or owner do you know how to evaluate “at risk” job classifications as they relate to company-wide penalty assessment

·        As a manager or supervisor or owner do you know How to assess the implications of OSHA’s increased fines and penalties initiative as it relates to the enterprise enforcement approach

·        As a manager or supervisor or owner do you know  how to or apply the  implications of the enterprise enforcement approach on OSHA Audit Policy and safe harbor on voluntary self-audits

·        As a manager or supervisor or owner do you know how to apply or implement or design strategies for minimizing the potential impact of the enterprise enforcement approach

Companies that operate multiple facilities in different locations, such as national retail and grocery chains, manufacturers, and hotel groups need to be aware of four new Occupational Safety and Health Administration (OSHA) enforcement trends that have important enterprise-wide consequences:

1.   A rise in follow-up inspections and repeat violations at sister facilities within a corporate family;

2.   OSHA’s pursuit of company-wide abatement provisions in settlement agreements;

3.   OSHA’s requests for enterprise-wide relief from the Occupational Safety and Health Review Commission; and

4.   Implementation of OSHA’s Severe Violators Enforcement Program (SVEP), which incorporates each of the above.

Follow-up Inspections and Repeat Violations

The most significant trend impacting employers with multiple locations is OSHA’s recent interest in Follow-up Inspections and Repeat citations. OSHA characterizes citations as Other Than Serious (OTS), Serious, Willful, or Repeat. The maximum penalty for OTS and Serious citations is only $7,000 per violation, but for Willful and Repeat violations, OSHA can issue penalties up to $70,000 per violation. By actively pursuing more Repeat violations, OSHA is issuing much higher penalties.

OSHA issues Repeat violations when an employer has been cited in the past for a substantially similar violation (generally, a citation issued under the same standard for the same violative condition). Until recently, Repeat violations were issued much less frequently because OSHA:

·        historically treated workplaces as individual, independent establishments;

·        limited to three years its review of employers’ OSHA records for past violations to form the basis for a Repeat; and

·        was less likely to revisit a workplace within a few years.

Each of these factors has changed under the Obama Administration’s OSHA. Today’s OSHA:

·        treats related workplaces within a corporate family as one workplace for purposes of Repeat violations;

·        looks back five years for past violations to form the basis for Repeats; and

·        selects inspection targets with past violations (at the same or related facilities within a corporate family), with the goal of finding and citing more Repeat violations.

After OSHA issues citations, the most common form of resolution is for the employer and the Secretary of Labor to enter into a settlement agreement. OSHA settlement agreements typically spell out any changes to the citations (e.g., withdrawal or amendments to certain citation items, the amount of penalty reduction, and modified abatement dates), and the specific actions the employer will be required to take to abate the cited hazards. Because citations arise from an OSHA inspection at a particular workplace, the required abatement set forth in the original citation is limited to the hazardous conditions identified at that specific workplace. While the law limits to a single location the abatement OSHA can properly demand in a citation, in a settlement, OSHA can make demands beyond what it normally can require in a citation.

OSHA’s SVEP incorporates elements of all of the above enterprise-wide enforcement trends. OSHA’s SVEP Directive requires Area Offices to consider including in every settlement: (1) enterprise-wide abatement requirements; (2) provisions requiring employers to identify all of its current or future jobsites; and (3) consent to inspections at other locations (i.e., waiving the warrant requirement). With regard to Follow-up Inspections and Repeat violations, the primary consequence of employers “qualifying” for the SVEP is that OSHA will conduct mandatory Follow-up Inspections at related facilities (as many as ten sister facilities in the first wave). Finally, both of the instances in which OSHA has pursued enterprise-wide relief from the Review Commission have been in SVEP cases. Another means of tightening enforcment is OSHA’s use of egregious penalty powers, which allow the agency to issue a separate citation item and separate penalty for each affected worker. For example, if five workers are affected in a willful violation, the penalty would normally be the $70,000 current maximum; under the egregious approach, the penalty would be $350,000. Every egregious citation case automatically places the employer in the SVEP program.

Employers must be careful to weigh the benefit of such settlement terms against the potential cost of Repeat violations and costly company-wide abatement requirements that may arise due to Follow-up Inspections at related facilities. Increased Public Disclosure What some deem OSHA’s “public shaming” campaign expands. Begun in 2010, the agency’s Severe Violator Enforcement Program (SVEP) has resulted in OSHA press releases detailing employers’ violations and the proposed civil penalties. What OSHA now calls a “nudge” to spark competitive desire not to be viewed as a bad actor is now manifest in the May 12, 2016, e-Recordkeeping final rule. The regulation, which affects employers with 20 to 249 workers in high-hazard industry sectors, and all employers with 250 or more employees, will make employers’ injury and illness data publicly available and searchable by employer name. This rule requires the first electronic submission of OSHA logs on July 1, 2017. The rule also codifies worker protections under Section 11(c), the whistleblower provisions of the OSH Act. The whistleblower provisions take effect Aug. 10, 2016, and will allow OSHA to impose up to its maximum penalty if a worker is retaliated against because s/he reports an injury or illness to the employer or exercises any other rights under Section 11(c). The agency can also prosecute the employer on behalf of the aggrieved worker and seek compensatory damages. In several cases last year, the U.S. District Court awarded $200,000 or more in damages for whistleblower violations.

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