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OSHA Rules Impact Construction Industry

This article originally appeared in the March/April 2016 issue of Contractor’s Tool Source. Click here to read the original article. 

Late last year the U.S. Office of Information and Regulatory Affairs published its fall agenda for rule changes or additions for federal agencies in 2016, 31 of which directly relate to the regulations enforced by the Occupational Safety and Health Administration (OSHA).  While not all of these new rules or rule changes will go into effect immediately, several of the rules that are slated to become effective this year will have a significant impact for both the construction industry specifically, as well as the wider business community.

Here are the top five changes that construction companies and contractors need to be aware of in 2016:

Increases to OSHA’s fine structure.

Section 701 of the Bipartisan Budget Act of 2015, which President Obama signed into law on November 2, requires OSHA to increase its fine structure to keep up with inflation.  As a result, OSHA is set to increase civil penalties for the first time since 1990, and will be required to adjust fine rates every year based on the Consumer Price Index.  To accomplish this, there will be a one-time “Catch Up Adjustment” for 2016 as part of an interim final rule that must go into effect by August 1.

This means that, as of August 1, OSHA fines will increase by a staggering 80 percent. To give you a better idea of the impact of this rule, consider this: The penalty for a serious violation penalty is currently $7,000.  Once the new rule goes into effect, that cost will jump to $12,600.  The penalties for willful and repeat violations will go from costing an employer $70,000 to costing them $126,000.  Per violation.

While the rule only applies to states with a federal OSHA program, like Texas, there is a caveat in all state-run OSHA programs that they be as effective as the federal program, so employers will likely see the costs in state-run programs go up as well.

As you can imagine, these penalty increases will have a significant impact on the construction industry, due simply to the number of citations employers in the industry receive.  Two of the top 10 most frequently cited OSHA standards violations for 2015, fall protection and scaffolding requirements, are specific to the construction industry.  (The other eight are all general industry.)

At the same time, OSHA is changing the way they conduct inspections from a frequency-based approach to one that favors more rigorous inspections, which makes it all but certain that the number of citations will increase.  This means that not only will employers be required to pay more in penalties for any violations for which they are cited, but also that they’re likely to receive more citations than ever before.

Enhanced definitions and training requirements for confined spaces.

Technically speaking, the Confined Spaces In Construction Standard (29 CFR 1926.1207) went into effect in August 2015, but OSHA later announced that it would delay its enforcement until January 8, 2016, which is why it’s included in this list.

According to OSHA, a “confined space” is one that a person can fit into that has limited or restricted means of entry or exit and is not designed for continuous occupancy.

Under the new ruling, employers are required to train employees on the existence, location, and dangers posed by each confined space and prohibit unauthorized workers from entering such spaces.  OSHA also expanded the definition of confined spaces to include attics and crawlspaces.  Employees who work in confined spaces must also be trained in how to recognize, isolate, control and or protect themselves and others from these dangerous conditions, including providing emergency rescue procedures.  These employees must also be equipped with adequate personal protective equipment and rescue gear to perform a rescue, is so trained.  Workers not authorized to perform rescue procedures must be trained on the dangers of attempting such rescues.

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While employers whose workers regularly work in more industrial confined spaces such as tunnels or ductwork, the inclusion of attics and crawlspaces makes this ruling a particular concern for mechanical construction contractors like residential HVAC contractors, as HVAC equipment is frequently located in one of these two spaces.

This new standard also includes a permit program for particularly dangerous confined spaces that meet one of the following specifications outlined by OSHA:

  • It contains or has the potential to contain a hazardous atmosphere;
  • It contains material that has the potential to engulf an entrant;
  • It has walls that converge inward or floors that slope downward and taper into a smaller area which could trap or asphyxiate an entrant; or
  • It contains any other recognized safety or health hazards, such as unguarded machinery, exposed live wires or heat stress.

The standard requires that employers not only provide training on the existence, location and potential dangers of such spaces, but also that employees obtain authorization in the form of a permit before entering such a space.

Unlike building permits or other typical permit systems, the permits required to enter these confined spaces (aptly referred to as “permit-required confined spaces”) are issued by the employer, not some other third party.  This puts the burden of documenting potential hazards and ensuring employees are properly equipped for whatever they may encounter in the space on the employer.

All in all, the Confined Spaces In Construction Standard has created a need for increased oversight when it comes to these types of workspaces and environments in order to adhere to the new requirements.

Increased safety responsibilities for companies using temporary labor.

This is another case, like the confined spaces update, in which although the rule has technically been effective for a while, is likely to see heavier enforcement this year.  Back in 2013, OSHA implemented what it called its “Temporary Worker Initiative” as part of its efforts to focus more on rules and regulations affecting staffing agency employees.  In 2015, OSHA updated the safety responsibilities for those companies that use temporary labor or staffing agencies.

Under the new rules, both host employers and the staffing agencies now share the burden of a safe workplace.  In general terms, this means that the temporary staffing business or agency is responsible for providing their staff with general safety training, while the host employer (i.e. the company with whom the temporary employees are placed) is responsible for site-specific safety, including the proper use of appropriate PPE.  OSHA also required that temporary workers injured at a host company be placed on the host employer’s OSHA log.

In reviewing a number of citations issued over the past year, it is clear that OSHA continues to have a keen interest in cases involving joint employers, and has demonstrated a willingness to cite both staffing agencies and host employers when they have found violations.  OSHA will likely continue to view joint-employer cases with increased scrutiny in 2016, which means that host companies can no longer abdicate by contract their responsibilities for keeping all employees safe at their workplace.

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Final rule for silica exposure expected to be released.

Just last week, OSHA published its long-awaited final rule regarding crystalline silica. This is significant, since OSHA first began working on a rule to reduce exposure to silica dust, a mineral substance often created during work operations involving stone, rock, brick, industrial sand and concrete, back under the George W. Bush’s administration.  For years, the US Centers for Disease Control and Prevention (CDC) has recommended that OSHA issue stronger regulations regarding silica exposure because breathing silica dust has been shown to cause pulmonary disease and lung cancer.

The final rule cuts the permissible exposure limit (PEL) in half, from 100 micrograms to 50 micrograms over the course of an eight-hour work day.  The lower PEL not only increases the need for added respiratory protection, but also requires employers to make investments in training programs, medical testing and ongoing monitoring, all of which will add to the cost of a company’s safety program.

Updated electronic recordkeeping and reporting regulations.

OSHA’s “Improve Tracking of Workplace Injuries and Illnesses” rule is also expected to be finalized shortly.  This rule adds new electronic reporting obligations for employers who are required to keep records of serious occupational injuries and illnesses.

Specifically, this rule is expected to require applicable employers with more than 250 employees per establishment to electronically submit their OSHA 300 Logs on a quarterly basis, while applicable employers with more than 20 employees per establishment in certain industries would be required to submit their OSHA 300 Logs on an annual basis.  Upon submission and review, OSHA would then publish these logs publicly on its website.

Although the quarterly reporting requirement for employers with 250 or more employees will force these companies to be even more vigilant when it comes to their recordkeeping habits, it is not clear what other direct effects this rule may have on employers, besides from a bit of public shaming for those with the most reported injuries.  The main backlash this rule has received is in regards to the possibility that individual employee information may be accidentally made public when the logs are published online.  The agency has previously said that private information will be scrubbed from these reports prior to them being published online, but they have not specifically said how they plan to go about doing this.

Conclusion

While this isn’t a comprehensive analysis of all the proposed OSHA rules that might be going into effect in 2016, they represent the most significant causes of concern for the construction and contractor industries this year.  These new rules touch almost every aspect of a company’s existing safety program, including training, protective equipment, procedures and recordkeeping.

Employers should consult with their internal safety professionals and counsel for more information, or consider bringing in additional resources, like an outside safety consultant, to help them identify areas of weakness in their existing safety programs and policies.  Employers who don’t already have a safety plan in place should make implementing one a top priority for 2016, or risk costly (and increasing) penalties for non-compliance.

This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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