SAFE PRACTICE
OSHA’s Emerging Perspective on Safety Incentive Programs
DARREN J. HUNTER, ROONEY, RIPPIE & RATNASWAMY LLP, CHICAGO S
afety professionals at many large companies are asking the same question: “I have
heard that OSHA may ban safety incentive programs. My company uses an employee incentive program that provides a bonus for meet- ing quality, productivity and safety performance targets. The program has been very successful, has reduced injuries and is popular with em- ployees. Do we have to take safety out of the program? It would seem that having an employee incentive program without safety sends the wrong message.” Te short answer is that the Oc-
cupational Safety and Health Ad- ministration (OSHA) currently has no regulations in place that address safety incentive programs, and there is no truth to the rumor that it may implement a regulation banning safety incentive programs. Notably, OSHA has acknowledged the positive role safety incentive programs that focus on “leading” indicators have on work- place safety. Because OSHA believes an emphasis on “lagging” indicators reduces overall safety, it is assessing whether to place restrictions on certain safety incentive programs that focus exclusively on them. “Lagging” and “leading” indicators
are terms of art in the safety field. Gen- erally speaking, “indicators” measure an employer’s overall safety performance. Lagging indicators are safety metrics that measure the outcome of undesir- able events that have already hap- pened, such as a work-related accident. Leading indicators, on the other hand, are safety metrics that are associated with and precede undesirable events, such as identifying areas of weakness or concern prior to the event. Not surprisingly, many employers
have implemented safety incentive programs that focus exclusively on lagging indicators because it is easier to identify them and administer those
programs. For the same reason, fewer employers have implemented safety incentive programs based exclusively on leading indicators, as it is much more difficult to identify leading indi- cators and administer those programs. OSHA has weighed in on this issue
on several occasions. First, on Sep- tember 28, 2010, it issued a National Emphasis Program (NEP), “Directive on its Injury and Illness Recordkeep- ing National Emphasis Program.” Under this NEP, OSHA investigated companies with policies in place that discourage accurate recordkeeping, including safety incentive policies based exclusively on lagging indica- tors. OSHA emphasized in the NEP its position that employees will be discouraged from reporting an inci- dent if it will affect their incentive pay. Although the NEP expired after two years, OSHA used the NEP to make its position on lagging indicators clear. See
www.osha.gov/OshDoc/Direc- tive_pdf/CPL_02_10-07.pdf. In June 2011, OSHA issued “Re-
vised VPP Policy Memorandum No. 5: Further Improvements to the Voluntary Protection Programs” (the VPP Policy Memo). It sets forth specific safety incentive program criteria for OSHA’s VPP participants to address OSHA’s fear that, “When an incentive discour- ages worker reporting or, in particularly extreme cases, disciplines workers for reporting injuries or hazards, problems remain concealed, investigations do not take place, nothing is learned or corrected, and workers remain exposed to harm.” Accordingly, VPP partici- pants are now prohibited from utiliz- ing rate-based programs that directly reward workers for achieving low injury and illness rates. To remedy this, the VPP Policy Memo encourages the use of “positive incentive programs” (i.e., leading indicators) that encourage or reward workers for reporting injuries, illnesses, near-misses or hazards, or that recognize, reward and thereby
encourage worker involvement in the safety and health management system. See
www.osha.gov/dcsp/vpp/policy_ memo5.html. On March 12, 2012, OSHA issued
a memorandum, “Employer Safety Incentive and Disincentive Policies and Practices.” It states that in view of an inherent conflict with Section 11(c) of the OSHA Act, which prohibits an employer from discriminating against an employee because the employee reports an injury or illness, OSHA expresses its concerns with safety in- centive programs that “unintentionally or intentionally provide employees an incentive not to report injuries.” See
www.osha.gov/as/opa/whistleblower memo.html. Finally, OSHA has addressed safety
incentive programs as part of settle- ment agreements. In one recent case, it incorporated specific language into the settlement agreement requiring the employer to eliminate its incentive program based on injury rates, and to retain a compensation and benefits expert to evaluate safety incentive programs. (Secretary of Labor v. Exel Inc., OSHRC No. 12-0683). See
www.osha.gov/pls/oshaweb/owadisp. show_document?p_table=CWSA&p_ id=2200. To date, OSHA has not issued a
formal regulation addressing safety incentive programs, but it is foresee- able that it will restrict safety incentive programs that focus exclusively or pri- marily on lagging indicators. OSHA may issue a rulemaking in 2014 as part of the “Injury and Illness Prevention Programs (I2P2)” or address it in a completely different context. Regard- less of the form, employers are on notice that OSHA does not favor any safety incentive program that might discourage workers from reporting injuries and illnesses.
Contact the author at
darren.hunter@
r3law.com,
www.r3law.com.
February 2014 MODERN CASTING | 65
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84