Is OSHA Killing the American Dream?

One month after President Obama took office he signed a budget blueprint seeking to increase funding to OSHA, to enable to "vigorously enforce workplace safety laws and whistleblower protections, and ensure the safety and health of American workers." OSHA's 2011 budget includes another increase of $14 million of this year's budget, and more than half of that $14 million will go to boost enforcement.

In a June 2009 speech at the American Society of Safety Engineers' annual conference, Secretary of Labor Hilda Solis said: "There is a new sheriff in town.... Make no mistake about it; the Department of Labor is back in the enforcement business. We are serious, very serious." And true to her word, Solis dispatched her new SWAT teams to show that she means business. The new sheriff's activities are further evidenced by the majority of news releases issued under OSHA's new leadership: enforcement reports with company names, a list of violations, and proposed monetary penalties.

While no one wants to come home in a body bag after a day of work and no one condones bad safety practices, the question is, how much compliance is too much compliance? In today's economy it's difficult to run a shop, keep up with payroll, and accommodate all of OSHA's requirements while others in that industry outsource to foreign countries and enjoy lax labor laws.

Our company, Legend Safety, has recently represented a printing company (a struggling and rapidly disappearing U.S. industry) that was cited by OSHA more than $100,000 for violations (some of which were well deserved). Part of the corrective measures was to convert to an outside dust collection system, claiming that having it in the building creates a combustible dust hazard. Never mind the $4,500 fine for this violation; this move would have cost our client $300,000. True, our client over-capacitated the dust collection system, and something had to be done -- but with the stroke of a pen, a superfluous corrective measure was in order at a price of $300,000 to a struggling company. We were able to successfully challenge that charge by having our compliance engineers show hard, cold engineering figures to OSHA. (We sat with OSHA throughout the mitigation process, and while our client had their attorney present, as well, OSHA agreed to go ahead with lessening the fines only if Legend Safety stays on retainer for at least a year.)

Compliance officers cannot possibly be equipped with the engineering factors of each piece of equipment out there, but when the burden of proof is not on them, nothing stands in their way.

OSHA has hit the U.S. Postal Service hard, with millions in fines for failure to protect workers from arc flash hazards in many facilities. Let's not forget that the U.S. Postal Service has 29 facilities that have participated in OSHA's model Voluntary Protection Programs and are designated as OSHA VPP sites. If OSHA would be solution-driven, wouldn't it make more sense to fine the U.S. Postal Service for one facility and give them a grace period to fix the problem at other facilities? (Word to the wise: Don't stock up on $0.44 stamps.)

David Michaels, assistant secretary of Labor for OSHA, boasts that "by the end of the current fiscal year, OSHA will have issued more egregious and significant cases than it has at any time in the last decade." Did I hear Quota? Wouldn't it make more sense to boast a declining injury rate (if true) rather than boasting about citations issued? Should enforcement really be the primary goal? While there is no doubt that companies with robust safety programs have a better shot at the American dream, the question is what happens to the smaller, struggling companies who do need a push. Should they be slapped to a point where they go into survival mode?

While safety consulting firms such as ours make money from companies hit hard by OSHA (both for fine mitigation and corrective measure implementation), most of us would rather earn our money by having our clients be proactive rather than reactive. And while it may take a reminder from OSHA to get serious, I have found that being entirely thrown under the bus by OSHA is counterproductive. Small companies want to do the right thing but may need some hand-holding. When railroaded by OSHA, they generally lose touch with their employees and simply go into survival mode.

Michaels further bemoans the fact that he doesn't have enough footsoldiers on the ground: "with our state partners we have about 2,000 inspectors responsible for the health and safety of 130 million workers, employed at 7 million worksites around the nation - which translates to about one compliance officer for every 60,000 workers." And he also complains about OSHA's challenges in its limited budget, many outdated standards, and weak penalties.

On the same week that the EPA grudgingly -— after heavy gun lobby pressure —- rejected a petition seeking to ban all lead in ammunition, OSHA slapped a Miami-based gun range builder with more than $2 million in fines, alleging the company knowingly neglected to protect employees who clean gun ranges from serious overexposure to lead. While no conspiracies are suggested here, it does raise an eyebrow as to this new "We'll shut you down" attitude. Let's face it: $2 million for a small company with just a handful of employees is as good as a death sentence. While there is no question that a company with many willful violations should be hit hard, it's not like they had an explosion with fatalities. As for Michaels' "weak penalties" worries, well, he predicts that this month, OSHA will formally launch a new policy that increases proposed penalties.

While overcoming obstacles is standard for any business, it sure can become a deterrent to entrepreneurs seeking to materialize their vision when these hurdles are not directly related to bettering their product or increasing their bottom line. With confusing tax laws, tough labor union negotiations, tougher bank lending policies, a tariff-free open market incentivizing offshore production, and now a new OSHA resolution, can any new business plan realistically add up? Can any existing, struggling industry actually survive?

While no one is against enforcement, let's not forget that law enforcement agents take an oath to protect "and to serve." I suggest that the new sheriffs in town take a breather and ponder both aspects of their call of duty.

Posted by Mordy Neuman on Oct 12, 2010