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Employer-sponsored pizza parties for employees who perform work safely may soon be in vogue again, per a memorandum issued by the U.S. Occupational Safety and Health Administration.
The Oct. 11 memo sought to clarify the agency’s enforcement stance on the anti-retaliation provisions of its electronic record-keeping rule, which discouraged employers from any activities that could deter employee reporting of injuries and illnesses. This included incentive programs offering prizes such as pizza parties for a certain period of time without a workplace injury or illness.
OSHA’s Improve Tracking of Workplace Injuries and Illnesses regulation, otherwise known as the electronic record-keeping rule, was a source of consternation for employers and their representatives in large part because of the anti-retaliation provisions featured in the rule’s preamble.
The regulation did not ban drug testing of employees, but it prohibited employers from using drug testing or the threat of it as a form of adverse action against employees who report injuries or illnesses, according to the final rule published in 2016.
OSHA’s recent memo clarified that the regulation does not prohibit employers from establishing workplace safety incentive programs or post-incident drug testing.
Action taken under a safety incentive program or post-incident drug testing policy would only violate the anti-retaliation provisions of the rule “if the employer took the action to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health,” OSHA officials said in the memorandum sent to the agency’s regional administrators.
Safety professionals were concerned about whether they could implement and enforce post-accident drug testing and employee incentive programs, said James D. Smith, regional leader of national risk control services for Arthur J. Gallagher & Co. in West Palm Beach, Florida, and former president of Park Ridge, Illinois-based American Society of Safety Professionals.
“There was so much misunderstanding of the application of the rule,” he said. “It’s a bad rule when it’s too confusing for the professionals to come to some conclusion. If you’re going to write a rule like that, it should be very well understood.”
Those who collect and decipher injury data often worry that changes to OSHA’s electronic record-keeping rule further confuse safety professionals trying to better understand all aspects of injuries, including contributing causes, said Kenneth Kolosh, Itasca, Illinois-based manager of the statistics department for the National Safety Council. “OSHA record-keeping standards are really confusing,” he said. “Every time there’s a change in OSHA reporting, there’s a breakdown” in data collection.
Experts who viewed the memo as a positive development for employers highlighted its clarification that rate-based incentive programs focusing on reducing the number of reported injuries and illnesses and typically rewarding employees with a prize or bonus at the end of an injury-free month are permissible as long as they are not implemented in a manner that discourages reporting. If an employer takes a negative action against an employee under a rate-based incentive program, such as withholding a prize or bonus because of a reported injury, OSHA would not cite the employer under the regulation as long as the employer has implemented adequate precautions to ensure that employees feel free to report an injury or illness, according to the memo.
“The OSHA memo clarifies that employers need not worry about the common incentives of a pizza dinner, T-shirts, etc.,” Howard Mavity, Atlanta-based partner in the workplace safety and catastrophe management practice of Fisher & Phillips LLP, said via email. “Common sense tells you when the magnitude of the incentive would in fact discourage reporting.”
Similarly, employers who test all employees involved in a workplace incident rather than just the injured or reporting employee should be comfortable that they won’t be cited for such testing, experts say.
“It’s a little bit of a cautious optimism for at least the next two years that your post-accident drug testing and alcohol testing is safe provided you’re drug-testing everybody,” said Taylor White, Dallas-based senior counsel who represents employers in safety and other matters for Foley & Lardner LLP. “Their memo, to me, is helpful to employers to give them some level of comfort that they can have incentive programs, even rate-based incentive programs, provided they’re not just punishing the reporting of an injury or accidents. I think employers’ pizza parties for a good safety culture are safe.”
But employers should continue to be wary about the agency’s stance because changes implemented by guidance, directive or enforcement memo could easily be rescinded if a new administration comes in and takes a different position.
“That’s not the way rule-making is supposed to be done,” said Eric Conn, founding partner of Conn Maciel Carey LLP in Washington and chair of the firm’s national OSHA workplace safety practice. “That’s not the way regulatory requirements are supposed to be established and enforced.”
Employers should pay more attention to complying with electronic record-keeping requirements now that the U.S. Occupational Safety and Health Administration is launching a site-specific inspection program targeting employers the agency believes should have, but did not, electronically submit certain injury and illness data for calendar year 2016, experts say.