There are a couple of stories here.
Recent headlines report on an OSHA letter warning Arizona OSHA that it is following inappropriate enforcement procedures. Underlying this situation is the question of how OSHA will enforce its legal duty to ensure that OSHA state plans are “at least as effective” as the national program. The Arizona case may present the Trump administration with its first state plan conflict, testing whether federal OSHA still has the will to take strong action to ensure that workers in state plans have the same right to a safe workplace that employees in federal states have.
Earlier this month, OSHA’s Arizona Area Director Zach Barnett notified James Ashley, Director of the Arizona Division of Occupational Safety and Health (ADOSH) that the state is not following appropriate procedures and guidelines in allowing the Industrial Commission of Arizona (ICA) to inappropriately reclassify violations and make penalty adjustments to citations issued by ADOSH inspectors. Barnett told Ashley that the ICA must cease reclassifying violations and that the agency must determine criteria by which the ICA can approve citations or adjust penalties.
Last December, an Arizona Star investigation found that the Industrial Commission of Arizona, which has authority to review ADOSH penalties that exceed $2,500, was routinely and arbitrarily reducing the penalties recommended by inspectors. The five members of the Industrial Commission of Arizona are appointed by the Governor for 5-year terms. (There are currently only four members) They are not required to have any particular expertise in workplace safety and health, nor is there any requirement to balance the Commission between labor and management.
The test now is whether the Trump administration will continue on that path to ensure state plans are “at least as effective” as federal OSHA or whether they will let some states use weak OSHA programs to attract more business.
Arizona is one of twenty one states and Puerto Rico that have full, OSHA-approved state plans that cover private and public sector employees in those states. (Five states and the Virgin Islands have “public employee” state plans where federal OSHA covers the private sector and a state program covers the public sector.) The Occupational Safety and Health Act (OSHAct) states that state plans must have standards and enforcement programs that are “at least as effective” as the federal program. If a state wants to issue a standard or enforcement policy that’s different from the federal standard or policy, federal OSHA must approve the different version to ensure that it as at least as effective as OSHA’s standards, policies and procedures. If workers, employers or others feel that the state plan is not “at least as effective” in any way, they may file a Complaint Against a State Program Administration (CASPA), asking OSHA to investigate the complaint, and if necessary, force the state to fix any problems that federal OSHA has identified.
The article highlighted several examples:
- The ICA cut a penalty against Hale’s Roofing from $3,500 to $1,250 and deleted Hale’s Roofing’s two serious citations and changed a third from serious to non-serious. ADOSH had found that ” untrained laborers were working on a 23-foot roof without fall-protection gear. The company also didn’t provide an enclosed chute to safely drop roof debris into a ground-level dumpster.” The ICA based its action on the company’s immediate abatement of the violations, that “a serious citation would impact a company’s ability to acquire contracts,” and the company’s allegations that the employees “chose not to use fall-protection gear provided by the company.”
- The ICA cut the penalty for American Roofing from the $44,000 recommended by ADOSH to $7,000 and downgraded the severity of ADOSH’s citations. The company’s co-owner, Ray Byrne, said. “I can’t speak highly enough of what the commission has done.” Byrne complained that despite spending $250,000 on safety equipment and training, he has “fired dozens of employees for misconduct….But the company still gets cited by ADOSH for the actions of employees.”
Following the article, Peter Dooley, representing National COSH, and others filed a CASPA against the state. Federal OSHA followed up with a letter to ADOSH asking them to explain what criteria the Industrial Commission was using to reduce penalties and reclassify violations, and conducted an investigation which found that the state was engaging in a process that deviated from established procedures and had not been approved by federal OSHA .
What’s the Normal Enforcement Process vs. the Arizona Process
In order to understand where Arizona went wrong, it’s necessary to understand the basic OSHA enforcement process. (or if you can’t handle the details, skip down to “What Can We Expect Now?”)
Greatly simplified, after an inspection is completed, the normal enforcement procedure is for the OSHA inspector (possibly with assistance of managers and DOL attorneys, depending on the size of the case) to issue a citation with violations and fines determined by procedures defined in the Field Operations Manual, a 280 page document which details the enforcement, citation, penalty and settlement process. States are required to have their own FOM that is at least as effective as OSHA’s.
OK, so at this point, you’re just about to click on something more interesting, thinking blech! Three hundred pages of procedures! Boring government gobbledygook! Why do I need to know anything about that? Right?
Well, not really. Hold on and read a bit more.
Large, complicated enforcement agencies need procedures so that the enforcement process is not arbitrary. From a management and fairness perspective you pretty much want all of your two thousand or so inspectors to be doing the same thing so that an employer in Pennsylvania can expect roughly the same citations and penalties for a violation as an employer in Idaho. Or for that matter, an employer in the federal state of Massachusetts and an employer in the state plan state of Arizona should have roughly the same expectations. And it’s important for workers to know that states aren’t going to be competing with each other for new business by making their enforcement program weaker than their neighbors’ . And if you don’t have written procedures (along with some built-in flexibility), everyone is all over the place and there is no equal justice under the law for employers, and equal protections under the law for workers.
So for those who are still reading this, let’s follow the process forward for the average serious citation, which currently has a maximum penalty is $12,675. OSHA will generally reduce the penalty down from the maximum after factoring in the gravity (severity and probability of potential injury) of the violation along with a possible 70% discount for size (small employers), 10% for history (has the employer been cited before) and 25% for good faith (e.g., does the employer have a health and safety program.) The average OSHA “initial” penalty at this point in the process was just over $5,000 in FY 2016.
But that’s only the beginning of the story.
After the citation is issued, the employer has 15 days to contest the citation, during which time they can work out an informal settlement with the local OSHA office. If no settlement is reached and the employer decides to contest the citation, the case can either move through the legal process or the employer may reach a formal settlement with OSHA, reducing the fines and possibly reclassifying the violations in return for the employer taking actions above and beyond compliance with the law. The legal or settlement process can take between months and years to reach completion.
Because the OSHAct states that the employer doesn’t have to fix (or abate) the cited problem during the contest period, OSHA is often willing to reduce fines and enter into a settlement order to get faster abatement of the hazard threatening workers. After settlements and court decisions are factored in, federal OSHA’s average “current” penalty for a serious violation in FY 2016 was $2,455.
So What Was the Problem in Arizona?
Now that we are all experts on the federal enforcement process and procedures, let’s take a look at Arizona. Unlike federal OSHA, Arizona has been adding another step between the inspector’s determination of the appropriate penalty using Arizona FOM procedures, and actual issuance of the citation and penalty. Arizona had basically adopted the federal FOM. One difference is that the ICA has the authority to approve the issuance of occupational safety and health citations with penalties in excess of$2,500. Federal OSHA approved that difference with the understanding that the ICA would simply ensure that penalty reduction factors specified in the FOM were being correctly applied. And until recently, that’s what the ICA did: simply ensure that the inspectors were following the rules in Arizona’s FOM. In his December 2015 letter, Barnett asked if the ICA was using different criteria than contained in the FOM, and if so, to see those criteria, so OSHA could determine if they were at least as effective.
Arizona Industrial Commission chairman Dale Schultz responded in February, using the same justifications that state plans often use when OSHA challenges their effectiveness: that no one really knows what “at least as effective” means, that injuries and illnesses in Arizona are lower than the national average and that State Plans are supposed to be laboratories of innovation. Schultz stated that Federal OSHA’s action will only “discourage state innovation by attempting to force Arizona to become a monolithic superimposed federal system”
Schultz also assured Barnett that while ICA commissioners have received supplemental training about OSHA’s penalty and enforcement procedures as they are often “not OSHA or FOM experts.”
In its response the ADOSH’s February letter, Federal OSHA found, however, that there were no OSHA-approved criteria in the FOM, outside of those for size, good faith and history — which had already been applied by the inspectors — that give the ICA authority to reduce penalties.
Absent any specified OSHA-approved criteria, the ICA can only act to apply the penalty reduction factors set-forth in the FOM. However, OSHA finds that the ICA is currently reducing penalties in a seemingly arbitrary manner, without regard for the factors in the FOM. This practice reduces the deterrent effect of higher penalties and fails to ensure that employers within the state are treated equally. (emphasis added)
If the whole point of penalties is to deter employers from workers by violating health and safety standards. By that measure, Arizona is failing, according to health and safety experts.
Without any real threat to their bottom line, unscrupulous employers have little incentive to invest in training, procedures and equipment that put worker safety over profits, said Terry Stobbe, associate professor of public health at the University of Arizona. He teaches industrial hygiene, industrial safety and ergonomics.
Penalties are supposed to have a deterrent effect, but “the reality is, they’re so small it’s a joke,” Stobbe said. “ADOSH has a huge responsibility and they’re not living up to it.”
According to observers in Arizona, the role of the Industrial Commission review has changed. The original role served a purposed, according to OSHA Area Director Zach Barnett:
Any Industrial Commission penalty reductions, and changes in the severity of citations imposed, are supposed to be based on doubt concerning “legal sufficiency” for the proposed citations or concern about whether the ADOSH inspection was conducted properly, Barnett said. The commission’s reductions don’t appear to be limited to those situations, he said.
Instead, according to Barnett, it’s evolved into an “extrajudicial proceeding.” For example, it does not appear that the ICA considered “legal sufficiency” in reducing the Hale’s Roofing case mentioned above
The other problem is that ICA’s current procedures effectively cut workers out of the process. Although workers are also allowed to present their case, that’s not likely according to safety and health activist and former OSHA analyst, Celeste Monforton:
But employees would be unlikely to publicly oppose their boss, said Monforton, the former OSHA analyst.
“Most of them are not represented by a union,” she said. “The situation is set up very much to hear the point of view of the employer. It seems very one-sided to me.”
What Can We Expect Now?
The results of the investigation have been delivered to Arizona OSHA on May 4, along with instructions that the ICA must cease reclassifying violations and that the agency must determine criteria by which the ICA can approve citations or adjust penalties. Industrial Commission spokesman Bob Charles said the commission is reviewing federal OSHA’s findings. The state has 30 days to respond.
The hope is that Arizona will take the ICA back to its approved and traditional role of ensuring that inspectors’ findings are legally sufficient and comply with the FOM procedures. The question is what OSHA will do if the state refuses to comply with federal OSHA’s directions, and whether they will continue with the tough stance that the Obama administration took with state plans.
At the beginning of the Obama Administration, for example, Nevada OSHA was facing serious problems after a series of fatalities on a major construction job on the Las Vegas strip. In 2009, OSHA launched a special study of the Nevada program which found serious deficiencies. OSHA went on to take a closer look at all of the other state programs and launched a number of initiatives to ensure that they were operating in a manner at least as effective as the federal program.
While many OSHA observers noted that OSHA has limited tools for dealing with recalcitrant states, mainly the death penalty — terminating a state program — OSHA under the Obama administration developed a series of more flexible strategies to ensure that the states were running effective programs, including threatening to take over all or part of the state’s enforcement program or withholding federal contributions until the state had met certain benchmarks.
OSHA has already had one major run-in with Arizona OSHA when the state refused to comply with OSHA’s resurrection of fall protection requirements for residential construction. OSHA came close to taking over enforcement of the state’s construction sector before the state relented at the last minute and adopted the federal requirements. The situation in Arizona and a number of other cases where federal OSHA stepped in to ensure that state plans were operating effectively sent a strong message to the state plans that the federal government took seriously the OSHAct’s requirement that states run programs that are at least as effective as the federal government’s.
The test now is whether the Trump administration will continue on that path or whether they will allow some states to weaken their OSHA programs to attract more business. Unfortunately, the families of the workers killed on the Las Vegas strip can testify about the cost of that strategy.