3-20-12; New OSHA memo Puts Accident Reporting and Safety Incentive Programs Under Vague/Ominous Federal Spotlight

We thank our reader for sending this OSHA memo along for the rest of us to struggle with moving forward. We hope the next administration isn’t so strident about messing with U.S. employers. If you would like a copy of the new OSHA memo, send a reply.

On March 12, 2012, OSHA’s Deputy Assistant Secretary Richard Fairfax issued a memorandum on the subject of employer safety incentive/disincentive policies. In our view, it is long on policy and woefully short on specifics. We assume OSHA isn’t going to penalize insurance carriers and TPA’s for cutting insurance premiums when lower injury levels result in lower premiums but you never know—if all the stuff below is “discriminatory,” we think that simple financial concept might also be viewed in the same light.

In it, the memo indicates Section 11(c) of the OSH Act prohibits an employer from ‘discriminating’ against an employee because the employee reports an injury or illness.

Deputy Secretary Fairfax indicates reporting a work-related injury or illness is, in OSHA’s view, a “core employee right.” We don’t remember that one in the U.S. Constitution’s Bill of Rights. Mr. Fairfax further advises ‘retaliating’ against a worker for reporting an injury or illness is illegal discrimination under section 11(c). He further states

If employees do not feel free to report injuries or illnesses, the employer's entire workforce is put at risk. Employers do not learn of and correct dangerous conditions that have resulted in injuries, and injured employees may not receive the proper medical attention, or the workers' compensation benefits to which they are entitled. Ensuring that employees can report injuries or illnesses without fear of retaliation is therefore crucial to protecting worker safety and health.

Well, duh. The memo states there are several types of workplace policies and practices that discourage reporting and constitute unlawful discrimination. The memo ominously outlines “some” of these policies and practices may also violate OSHA's recordkeeping regulations, particularly the requirement to ensure employees have a way to report work-related injuries and illnesses.

OSHA also claims there is a potential for unlawful discrimination under all of these policies that may increase when management/supervisory bonuses are linked to lower reported injury rates. The memo states: “[w]hile OSHA appreciates employers using safety as a key management metric, we cannot condone a program that encourages discrimination against workers who report injuries.” The operative term in that sentence is “encourages discrimination”--from our business perspective, we feel OSHA is reading something negative into a common safety technique of having risk and safety managers incentivized to provide safer workplaces.

Most important, the memo outlines what the Deputy Secretary denotes as the “most common discriminatory policies”

v  An employer's policy to discipline all employees who are injured, regardless of fault, is not a legitimate nondiscriminatory reason an employer may advance to justify adverse action against an employee who reports an injury. In addition, such a policy is inconsistent with the employer's obligation to establish a way for employees to report injuries and where it is encountered, a referral for a recordkeeping investigation should be made.


v  An employee who reports an injury or illness is disciplined and the stated reason is the employee has violated an employer rule about the time or manner for reporting injuries and illnesses. Please note we have numerous employers who have “same-shift” or 24-hour reporting requirements.

o   The memo indicates “such cases deserve careful scrutiny. Because the act of reporting the injury directly results in discipline, there is a clear potential for violating section 11(c) or FRSA.”

o   The memo also indicates “such procedures must be reasonable and may not unduly burden the employee's right and ability to report. For example, the rules cannot penalize workers who do not realize immediately that their injuries are serious enough to report, or even that they are injured at all.” Please note claimant attorneys across the U.S. are now certain to tell all of their clients who report events late to say they didn’t think the injury was serious enough to report, even when they lose a toe.

v  In a third situation, an employer may attempt to use a work rule as a pretext for discrimination against a worker who reports an injury. OSHA’s focus is various

o   Does the employer monitor for compliance with the work rule in the absence of an injury?

o   Does the employer consistently impose equivalent discipline against employees who violate the work rule in the absence of an injury?

o   Vague rules, such as a requirement that employees "maintain situational awareness" or "work carefully" may be manipulated and used as a pretext for unlawful discrimination. Where such general safety rules are involved, the investigation must include an especially careful examination of whether and how the employer applies the rule in situations that do not involve an employee injury.

v  Finally, some employers establish programs that unintentionally/intentionally provide employees an incentive to not report injuries. For example, an employer might enter all employees who have not been injured in the previous year in a drawing to win a prize, or a team of employees might be awarded a bonus if no one from the team is injured over some period of time.

o   Such programs might be well-intentioned efforts by employers to encourage their workers to use safe practices.

o   However, OSHA feels there are better ways to encourage safe work practices, such as incentives that promote worker participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents or "near misses".

o   OSHA's VPP Guidance materials refer to positive incentives, including providing T-shirts to workers serving on safety and health committees; offering modest rewards for suggesting ways to strengthen safety and health; or throwing a recognition party at the successful completion of company-wide safety and health training.

o   Incentive programs that discourage employees from reporting injuries are problematic because an employer may not "in any manner discriminate" against an employee because the employee exercises a protected right, such as the right to report an injury.

o   An important factor to consider is whether the incentive involved is of sufficient magnitude that failure to receive it "might have dissuaded reasonable workers from" reporting injuries.

Where OSHA may be going with enforcement of this memo is anyone’s guess. We don’t think the government should tell U.S. business how to run safety programs and what kind of safety bonuses and what color safety t-Shirts to give out. We understand there may be differing views on this controversial topic--we appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.