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Washington Labor & Employment Wire » Occupational Safety and Health Administration

OSHA Issues Rule Amending Sarbanes-Oxley “Whistleblower” Protections


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On November 3, 2011, the Occupational Safety and Health Administration (OSHA) issued an interim final rule amending its regulations concerning employee protection from retaliation, or “whistleblower” claims, under Section 806 of the Sarbanes-Oxley Act. This interim rule implements changes to Sarbanes-Oxley made by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The changes implemented by this rulemaking include adding employee protections against retaliation by nationally recognized statistical rating organizations, as defined by the Securities Exchange Act, or their officers and employees. They also include extending the filing period for retaliation complaints from 90 to 180 days after the date on which the violation occurs, or the employee becomes aware of the violation. And the interim final rule grants parties a right to a jury trial in district court actions brought under Sarbanes-Oxley’s “kickout” provision, which provides for de novo review in the appropriate district court, regardless to the amount in controversy, if the Secretary of Labor has not issued a final decision within 180 days of the filing of a complaint.

In addition to addressing these changes under Dodd-Frank, the new rule amends OSHA’s procedural requirements under Sarbanes-Oxley to make them more consistent with OSHA’s procedural rules under other whistleblower statutes, such as the Surface Transportation Assistance Act, the National Transit Systems Security Act, and the Federal Railroad Safety Act. Pursuant to these revisions, whistleblower complaints no longer need to be in writing or “include a full statement of the acts and omissions, with pertinent dates, which are believed to constitute the violations.” Instead, the new rule provides that complaints “need not be in any particular form,” may be made orally or in writing, may be filed in any language, and may be filed by any person on the employee’s behalf.

Similarly, the new rule seeks to make the complainant’s burden of proof consistent with OSHA’s treatment of claims under other whistleblower statutes. Sarbanes-Oxley does not address the evidentiary standard that applies to a complainant’s showing that his or her protected activities were a contributing factor in an adverse employment action. Instead, it simply provides that the Secretary may find a violation only “if the complainant demonstrates” that protected activity was a contributing factor in the alleged adverse action. The new OSHA rule clarifies that the complainant must prove by a “preponderance of the evidence” that his or her protected activity contributed to the adverse action. If the complainant makes this showing, the burden shifts to the employer to prove by “clear and convincing evidence” that it would have reached the same decision even in the absence of the protected activity.

The new interim final rule also revises the regulations governing reinstatement. Whereas the prior regulations provided that reinstatement would not be appropriate where the respondent establishes that the complainant is a security risk. Under the new rule, the determination of whether reinstatement is inappropriate in each instance will be made “on the basis of the facts of each case and the relevant case law.” Moreover, where it deems appropriate, OSHA may now order “economic reinstatement,” instead of the usual remedy of preliminary reinstatement. Such economic reinstatement provides the complainant with the same pay and benefits that he received prior to his termination, or front pay, but does not require the complainant to actually return to work. An employer does not have a statutory right to choose economic reinstatement, and does not have a statutory right to recover the costs of such an economic reinstatement if the employer ultimately prevails in the whistleblower adjudication.

Interested parties can submit comments concerning the rulemaking within 60 days of its publication in the Federal Register today, November 3, 2011.


OSHA Proposal Would Revise List of Industries Required to Record and Report Worker Injuries and Illnesses


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On June 22, OSHA published a proposed rule in the Federal Register that would significantly revise the list of industries required to record workplace injuries and illnesses. OSHA regulations partially exempt certain industries from the obligation to maintain such records because those industries have relatively low rates of occupational injuries and illnesses. The industries are only partially exempt, because employers in these industries still must respond to OSHA or Bureau of Labor Statistics annual occupational injury and illness surveys on request. See 29 C.F.R. §§ 1904.41 & 1904.42

The list of partially exempt industries in the current regulations is based on the Standard Industrial Classification (SIC) system, which dates to the 1930s and is no longer used in government statistics.  The proposed rule would replace this list with one based on the newer North American Industry Classification System (NAICS).

Under the proposed rule, employers in 59 different industries would be required for the first time routinely to record illness and injury information. These industries include:  retail bakeries; car dealerships; hardware stores; liquor stores; property managers; theater and dance companies; museums; photography studios and labs; and video rental stores. In contrast, 72 industries that currently have to record this data would become partially exempt. The new exemption extends to:  boat dealers; book, newspaper, and periodical publishers; radio stations; television broadcasters; and wireless telecommunication carriers.

In addition, the proposed rule would make reportable all amputations and in-patient hospitalizations resulting from work-related incidents. Employers would be required to report all work-related fatalities and all work-related in-patient hospitalizations within eight hours, and all work-related amputations within 24 hours. Currently, employers are required to report within eight hours work-related incidents resulting in a fatality or that result in the in-patient hospitalizations of three or more employees. Employers need not report amputations resulting from work-related incidents at all if they do not require in-patient hospitalization.

OSHA estimates that the proposed rule would impose new recordkeeping requirements on 199,000 establishments, with a total of 5.3 million employees. The agency anticipates that those establishments, in turn, would record 173,000 injuries and illnesses per year. This impact would be offset, in part, by an estimated 119,000 establishments, with a total 4.0 million employees and an estimated 76,000 injuries and illnesses per year, that would no longer need to keep records.

Overall, OSHA estimates that the proposed rule would cost about $8.5 million, with costs of $50 to $100 for each affected establishment.


OSHA Announces Final Rule Streamlining Employer Requirements

On May 26, 2011, OSHA announced a forthcoming final rule that will streamline and simplify OSHA standards and reduce employer burdens.  The rule will impose no new requirements, and thus employers will need to take no steps to comply. 

This rule updates OSHA regulations in keeping with the goals of President Obama’s Executive Order 13563, “Improving Regulation and Regulatory Review.” The executive order was issued on January 18th with the stated goal of simplifying standards and reducing unnecessary burdens. Assistant Secretary of Labor for OSHA David Michaels stated that “OSHA estimates that the final rule, without reducing employee protection, will result in an annual cost savings to employers exceeding $43 million and significant reductions in paperwork burden hours.” The White House’s Office of Information and Regulatory Affairs noted that the new rule will remove “over 1.9 million hours of redundant reporting burdens on employers.”   

Specifically, the new rule will make several changes to OSHA’s existing respiratory protection standard, including aligning air cylinder testing requirements for self-contained breathing apparatuses with the U.S. Department of Transportation’s regulations, clarifying that aftermarket cylinders meet National Institute for Occupational Safety and Health (”NIOSH”) quality assurance requirements, and clarifying that the provisions of Appendix D, which contains information for employees using respirators when not required by the standard, are mandatory if the employee chooses to use a respirator.

The new rule will also update the definition of “potable water” to be consistent with the current EPA definition instead of the outdated Public Health Service Corps definition, remove the outdated requirement that hand dryers use warm air, and remove two medical records requirements from the commercial diving standard. The slings standard will also be updated and streamlined to require that employers use only slings marked with the manufacturers’ loading information. Finally, the new rule will delete a number of requirements that employers transmit exposure and medical records to NIOSH, since NIOSH had concluded that these records do not serve a useful research purpose. 

The final rule will be published soon in the Federal Register.


Occupational Safety and Health Review Commission Issues Decision on Time Limits for Recordkeeping Violations


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On March 11, 2011, the Occupational Safety and Health Review Commission issued a decision which addressed the question of when an “occurrence” of a regulatory violation happens for the purpose of determining whether it issued a citation within the statute of limitations.

At issue were five OSHA citations finding that Volks Constructors violated certain recordkeeping requirements at its facility located in Prairieville, Louisiana. OSHA cited the employer for numerous incidents of failing to maintain injury-and-illness records on OSHA Form 300 logs and Form 301 incident reports. The inspections took place between May and November 2006, leading OSHA to conclude that the employer failed to record 67 work-related injuries or illnesses at the site between August 2002 and April 2006. The employer did not contest that it failed to keep adequate records, but argued that the OSHA citations were too late.

Section 9(c) of the OSH Act states that “[n]o citation may be issued under this section after the expiration of six months following the occurrence of any violation.” None of the injuries or illnesses that the employer failed to log had occurred within six months of OSHA’s inspection and some had occurred almost five years earlier.

It was undisputed that the Secretary of Labor  issued the citations than six months after the recordkeeping duties at issue initially arose. The Secretary argued that the citations were timely because the violations continued during the five-year retention period prescribed by the recordkeeping regulations. Volks argued that these violations were one-time events that were not continuing, and that the citation could not be considered timely on the basis of the “discovery rule.”

The Commission affirmed four of the citations as timely and vacated a fifth citation as time-barred.  The Commission cited as controlling its decision in Johnson Controls, Inc., 15 BNA OSHC 2132, 1991-93 CCH OSHD ¶ 29,953 (No. 89-2614, 1993), where OSHA issued a citation for a recordkeeping violation more than six months after the employer erroneously deleted the entry of an employee’s elevated blood lead level from its illness and injury log. In Johnson Controls, the Commission held that “it is of no moment that a violation first occurred more than six months before the issuance of a citation, so long as the instances of noncompliance and employee access providing the basis for the contested citation[] occurred within six months of the citation’s issuance.” The Commission emphasized that it has explicitly held that, unlike other federal statutes in which an overt act is needed to show any violation, the OSH Act penalizes both overt acts and failures to act in the face of an ongoing, affirmative duty to perform prescribed obligations.

Next, the Commission rejected Volks’ argument that Johnson Controls has been undermined by intervening precedent from the Supreme Court and various courts of appeals. Specifically, Volks argued that the citation items were time-barred because they were not issued within six months of any “discrete, violative act.” The Commission found each line of cases cited by Volks to be distinguishable. With regard to Volks’ argument that, under the discovery rule, OSHA could not issue a citation for a recordkeeping violation more than six months after the close of the seven-day period, the Commission found that the discovery rule was irrelevant, since the Secretary did not claim that the discovery rule enabled her to cite Volks more than six months after the violations first occurred. “Rather, the timeliness of the citation at issue here is predicated solely on the continued existence of the violations throughout the five-year retention period, which means that OSHA did, in fact, issue the citation within six months of the occurrence of the recordkeeping violations.”

The fifth citation, which the court did vacate as time-barred, was for the employer’s failure to post an annual summary for the full time period required by 29 C.F.R. § 1904.32(b)(6). This regulation sets out a “date certain (April 30th) by which the posting of the annual summary may come to an end.” The Commission found that regulation’s plain language imposed a duty to post the summary for only a specified time period, and the Secretary failed to issue a citation within six months of the last day of that specified period. Thus, the citation was untimely.


President Obama Proposes Overall Budget Cut for Department of Labor in FY2012, Increase for OSHA


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On February 14, the Obama administration unveiled a $108.5 billion proposed budget for the Department of Labor for fiscal year 2012. The proposed budget would reduce DOL’s total budget by $40 million from the fiscal year 2011 budget, which is currently being funded by a recently enacted continuing resolution that will expire early next month.

The administration’s FY2012 budget calls for a significant increase for worker protection programs, including $240 million for the Wage and Hour Division (WHD), up from its current budget of $227.6 million. The budget allocates almost $50 million to a new multi-agency misclassification initiative aimed at coordinating federal and state efforts to combat the misclassification of employees as independent contractors. WHD’s budget includes $15 million for such misclassification investigations.

Notably, the budget requests $583.4 million for the Occupational Safety and Health Administration, an increase of a $24.8 million, or 4.4 percent, from fiscal year 2011. OSHA’s standard-setting directorate would receive $26 million, an increase of $36.8 percent from current funding levels. This $7 million increase includes $2.4 million to continue developing OSHA’s Injury and Illness Prevention Program rule, which aims to assist employers reduce workplace injuries by increasing their responsibilities for proactively identifying and fixing hazards in their workplaces.

In addition, the President’s budget requests $227 million for OSHA’s federal enforcement activities, an increase of 5.8 percent. The proposal would allocate $21 million for whistleblower protections, which would be separated out from enforcement, a change which OSHA claims would enable it to more easily track and report the resources used in the whistleblower program. According to OSHA, the funding would provide resources for 45 whistleblower investigators and 25 new inspectors.

Additional information concerning the President’s proposed FY2012 budget for the Department of Labor is available on the DOL’s website.


OSHA Withdraws Proposal Restoring Column for Work-Related Musculoskeletal Disorders on Employer Injury and Illness Logs

Citing concerns raised by small businesses, the Occupational Safety and Health Administration (OSHA) has temporarily withdrawn a proposal to restore a column for work-related musculoskeletal disorders on employer injury and illness logs. OSHA will convene a meeting jointly with the Small Business Administration’s Office of Advocacy to is seeking additional input from the small business community on the impact of the proposed rule. Interested businesses will have the opportunity to participate in the meeting through electronic means, such as telephone and/or a Web forum, and details of the meeting will be announced within 30 days.

Under current regulations, most small businesses are not required to keep records of workplace injuries and illnesses, including work-related musculoskeletal disorders (MSDs), on the OSHA Form 300, Log of Work-Related Injuries and Illnesses. OSHA’s injury and illness logs previously included a column for repetitive trauma disorders, such as noise and many kinds of MSDs, but when the OSHA separated noise and MSDs into two columns, the MSD column was deleted in 2003 before the provision became effective. The proposed rule would not change existing requirements about when and under what circumstances employers must record MSDs, but would restore the MSD column to the Form 300 and require employers to place a check mark in the new column for all MSDs.


OSHA New Standard on Cranes and Derricks Now in Effect


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OSHA’s new safety standard addressing the use of cranes and derricks in construction went into effect on November 9, 2010. Since the current standard was issued in 1971, the DOL has noted both a high number of fatalities associated with the use of cranes and derricks in construction and considerable technological advances in equipment. The final rule, published in the Federal Register on August 9, 2010, includes several provisions which have been modified from the proposed rule. The new standard is designed to address the key hazards posed by cranes and derricks on construction worksites, including the four main causes of worker death and injury: electrocution, crushed by parts of the equipment, struck-by the equipment/load, and falls.

Highlights of the new rule include the following requirements: a pre-erection inspection of tower crane parts; use of synthetic slings in accordance with the manufacturer’s instructions during assembly/disassembly work; assessment of ground conditions; qualification or certification of crane operators; and procedures for working in the vicinity of power lines.Employers have up to four years to ensure that their operators are qualified or certified under one of the options set forth in section 1926.1427, unless they are operating in a state or city that has operator requirements. In addition, employers must pay for all required training and certification of equipment operators employed as of the effective date of the rule.

The Edison Electric Institute and the Association of American Railroads, two industry associations, filed petitions challenging the rule with the U.S. Court of Appeals for the D.C. Circuit and the U.S. Court of Appeals for the Third Circuit, respectively, last month. (Edison Elec. Inst. v. OSHA, D.C. Cir., No. 10-1311, petition for review filed 10/6/10; Ass’n of Am. Railroads v. OSHA, 3d Cir., No. 10-4006, petition for review filed 10/7/10). The Edison Electric Institute will be meeting with OSHA on November 19 to share its concerns with the new guidelines. The pending lawsuits are not expected to delay implementation of the rule’s requirements, but could affect the final contours of the rule. OSHA aims to release additional compliance assistance material within the next month.

A copy of the regulatory text is available here.


OSHA’s New Penalty Structure Effective October 1, 2010


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In 2009, the Occupational Safety and Health Administration (OSHA) assembled a work group to evaluate the agency’s penalty practices. That group reached the general consensus that OSHA’s penalties were too low to have an adequate deterrent effect. Accordingly, earlier this year, OSHA announced its intention to make several significant changes to the penalty calculation system outlined in its Field Operations Manual. The basic details of those changes, which will increase the average serious penalty from $1,000 to $3,000 or $4,000, are outlined in an Administrative Penalty Information Bulletin on OSHA’s website. While the agency has not yet incorporated these changes into its Field Operations Manual, according to multiple outlets citing OSHA sources not publically available, these changes went into effect on October 1, 2010.

The new penalty policy increases the amount of the base penalties set forth under OSHA’s gravity-based penalty determination system. Under the existing regime, the base penalty for a low gravity violation is $1,500. Under the new policy the base penalty for such a violation doubles to $3,000. The base penalty for each level of severity and probability under the prevoius gravity-based penalty determination system similarly increases by $2,000 or $2,500 under the new policy, up to a maximum base penalty of $7,000 for a high gravity serious violation. 

Additionally, the new penalty structure expands the time period OSHA will consider when determining whether an employer’s past compliance history justifies a penalty adjustment. Under the old regime, OSHA looked at the employer’s history of violations over the previous three years, but will now consider the previous five years. An employer that has been cited for any high gravity serious, willful, repeat, or failure-to-abate violation during that period will receive a 10 percent increase in their penalty. Conversely, an employer who has been inspected in the previous five years and failed to receive any high gravity serious, willful, repeat, or failure-to-abate violation will receive a 10 percent reduction.

The new penalties policy also changes a number of the other adjustments presented in the current Field Operations Manual. While the current good faith procedures are largely retained, the 10 percent reduction for employers with a strategic partnership with OSHA has been eliminated. Good faith reductions in the case of high gravity serious, willful, repeat, or failure-to-abate violations have also been eliminated. Additionally, the new penalties policy reduces the percentage of size-reduction adjustments for small employers between 10 percent and 20 percent, depending on the size of the employer (employers with over 250 employees remain ineligible for a size reduction). Further, any reductions granted will no longer be added together before being deducted from the proposed penalty, but instead, will be calculated serially in the following order: history, good faith, “quick fix,” and size. The new serial deduction policy is expected to result in consistently higher penalties.  

Finally, the new policy provides for additional discretionary adjustments under OSHA’s new Severe Violator Enforcement Policy (SVEP). For high gravity serious violations, the new penalty regime takes into account the standards identified in the SVEP, allowing area directors to cite each standard violated as a separate violation, rather than combining violations, and further allowing the directors to limit adjustment for good faith reductions “to achieve the necessary deterrent effect.”


OSHA Steps Up Enforcement Efforts With Three Initiatives

In the last few days, OSHA has announced three major enforcement efforts that impose heightened obligations upon employers. The first initiative, the Severe Violator Enforcement Program (SVEP), applies to employers who “have demonstrated indifference to their OSH Act obligations by committing willful, repeated, or failure-to-abate violations.” OSHA created the SVEP in response to scrutiny from Congress and the DOL Inspector General last year when they concluded that OSHA did not take sufficient enforcement measures against recalcitrant employers as required by the Enhanced Enforcement Program (EEP). OSHA has replaced the EEP with the SVEP to increase its enforcement efforts against employers who have demonstrated an “indifference” to workplace safety obligations in four areas: (1) fatality or catastrophe situations; (2) industries that expose employees to the most severe hazards, including those identified as “high-emphasis hazards”; (3) industries that expose employees to the potential release of highly hazardous chemicals; and (4) egregious enforcement actions.

Under the SVEP, an early draft of which was leaked a few months ago, OSHA will conduct follow-up and nationwide inspections to assess whether the violation identified in a citation occurs at other worksites or is part of a broader pattern of noncompliance in the company. OSHA will also pursue higher-profile enforcement by notifying company headquarters of site-specific issues and publishing press releases upon the issuance of citations. Finally, OSHA will seek enhanced settlement agreement provisions in any case under the SVEP, including: (1) requiring the employer to hire an independent safety and health consultant; (2) applying settlement agreements company-wide; (3) imposing interim abatement controls if final abatement cannot be accomplished in a short period; (4) requiring employers to notify OSHA of other jobsites prior to work starting at new construction sites; (5) requiring employers to report work-related injuries and illnesses on a quarterly basis and consent to inspections based on that data; and (6) requiring employers to report for a specific time period any serious injury or illness requiring medical attention, and to consent to inspections based on that data.

A second policy change is OSHA’s decision to alter its penalty classification scheme. OSHA believes that its penalties are too low to have an adequate deterrent effect. As a result, OSHA plans to expand the time frame it uses to consider an employer’s history of violations when determining penalty enhancement and reductions and when issuing repeat citations. OSHA plans to increase this period from three to five years. This change will likely increase the number of repeat violations and lower the chances that an employer will receive a penalty reduction based on OSHA history. Another notable change is the limitation on area directors’ settlement authority during the informal conference stage of a case. Under this new scheme, area directors will be limited to a 30% maximum penalty reduction for employers during an informal conference. To obtain any penalty reduction beyond this 30%, area directors will have to obtain approval from regional administrators. OSHA anticipates that the new penalty classification scheme will increase the overall dollar amount of penalties. For example, OSHA predicts the average penalty for a serious violation will increase from $1,000 to $3,000 to $4,000.

A third, somewhat longer range regulatory initiative is OSHA’s plan to initiate a rulemaking for an injury and illness prevention program rule that will require employers to “find and fix” hazards in their workplaces. The rule would contain three distinct parts requiring employers to plan, prevent, and protect employees from workplace injuries and illnesses. Under the rule, OSHA would require employers to create a plan for identifying and remedying risks associated with hazards and OSHA violations. Employers would have to take significant steps to implement the plan and cannot get by with drafting a plan but taking few steps to ensure implementation. Finally, employers will have to ensure that the plan’s objectives are met on a regular basis.


OSHA Announces Semi-Annual Regulatory Agenda


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On April 26, 2010, OSHA published an agenda for regulations it has selected to review or develop over the next 12 months. The eight-item agenda contains the following regulatory items in the pre-rule, proposed rule, and final rule stages (all dates are tentative and subject to change):  

Regulations in Final Rule Stage

In July 2010, OSHA plans to issue a final rule regarding the cranes and derricks in construction proposed rulemaking. OSHA published the proposed rule on October 9, 2008 and held a public hearing from March 17-20, 2009.  

In February 2011, OSHA expects to issue a final rule on its Electric Power Transmission and Distribution and Electrical Protective Equipment proposed rule. OSHA published the proposed rule on June 15, 2005 and held a public hearing from March 6-14, 2006. OSHA also reopened the record in October 2008 and in September 2009, which included a public hearing on October 28, 2009, seeking comments on revised minimum approach distance tables.  

Regulations in Proposed Rule StageBy October 2010, OSHA expects to analyze comments it received in connection with its proposed rule to extend confined-spaces protection to construction workers. OSHA published the proposed rule on November 28, 2007 and held a public hearing on July 22, 2008. 

By February 2011, OSHA expects to publish a notice of proposed rulemaking for crystalline silica. OSHA completed a peer review of the occupational exposure standard for crystalline silica as part of the process for developing the proposed rulemaking. This review included an analysis of the possible health effects resulting from such exposure and the economic impact that recommended protective measures will have on employers.

Regulations in Pre-Rule Stage

By April 2010, OSHA expects to complete Section 610 (of the Regulatory Flexibility Act) reviews of its current methylene chloride standard, 29 C.F.R. § 1910.1052, and its current bloodborne pathogens standard, 29 C.F.R. § 1910.1030. These reviews will consider the need for either standard; whether either standard overlaps, duplicates, or conflicts with other regulations; and the degree to which technology, economic conditions, or others factors have changed since either rule was last evaluated. 

In October 2010, OSHA expects to initiate a peer review of occupational exposure to diacetyl, a major component in artificial butter. In July 2009, OSHA completed a Small Business Regulatory Business Fairness Act (”SBREFA”) panel that published a report, including a draft proposed rule, on occupational exposure to diacetyl. 

In November 2010, OSHA plans to complete a peer review of occupational exposure to beryllium. In January 2008, OSHA completed a SBREFA panel that published a report, including a draft proposed rule, on occupational exposure to beryllium.