The Chilling Effect of Safety (Dis)Incentive Programs and How Employers Can Avoid Them
OSHA has become increasingly critical of traditional, rate-based safety incentive programs that, according to the agency, actually discourage employees from reporting workplace injuries. OSHA’s favorite example to use is the year-end pizza party for achieving low incidence rates – as OSHA’s argument goes, while seemingly harmless enough, employees are actually incentivized to withhold injury reports to get free pizza. Assistant Secretary of Labor for OSHA, David Michaels most recently highlighted the agency’s concerns over these programs in a February 4, 2013 OSHA Employees All-Hands Meeting, lumping them in with factors that “undermine a workplace culture of safety.”
Since there is no OSHA standard concerning incentive programs, it was unclear how the agency planned to enforce its policy on these “safety disincentive programs.” Fortunately, OSHA has offered guidance that not only informs employers how they may be cited, but how to tailor their safety programs to create positive incentives and avoid any citation, period.
March 12, 2012 Fairfax Memorandum – Whistleblower and Recordkeeping Violations
In an effort to explain OSHA’s thinking on rate-based, safety disincentive programs, former Deputy Assistant Secretary, Richard Fairfax issued the now infamous March 12, 2012 Whistleblower Memorandum that articulates how these programs may violate Section 11(c) of the OSH Act, which “prohibits an employer from discriminating against an employee because the employee reports an injury or illness.” Namely, because they act to chill an employee’s right to report injuries:
“Incentive programs that discourage employees from reporting their injuries are problematic because, under section 11(c), 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.”
But the problem doesn’t end there. According to Fairfax, these programs may also be in violation of OSHA recordkeeping standards:
“[I]f the incentive is great enough that its loss dissuades reasonable workers from reporting injuries, the program would result in the employer’s failure to record injuries that it is required to record under Part 1904. In this case, the employer is violating that rule, and a referral for a recordkeeping investigation should be made.”
How Employers Can Avoid Citations – Rate-Based vs. Behavior-Based Programs
In OSHA’s view, employers should steer clear of safety programs that would give employees any reason to underreport workplace injuries/illnesses. In addition to the proverbial pizza party, OSHA has provided the following examples of problematic rate-based programs:
- Raffles for employees who have not been injured in the previous year;
- Bonuses or paid time off if employees are injury-free over a specified period of time; and
- Rewarding the work team that has the greatest reduction in annual incidence rate with paid time off.
Such programs may lead to OSHA whistleblower or recordkeeping investigations and possible citations.
Instead, OSHA believes employers should instill a culture of reporting injuries/illnesses by encouraging active participation in the safety and health system. According to OSHA, this can be done through behavior-based safety programs such as:
- Offering rewards for safety committee participation (e.g., t-shirts);
- Offering rewards for identifying hazards or participating in injury or near-miss investigations;
- Hosting a party at the successful completion of safety training.
In OSHA’s view, these programs are not only beneficial for a robust and proactive safety program, but also assure compliance.
For more information, please contact Mark Dreux, Head of the Arent Fox OSHA Group, at 202-857-6405.
