Regulations (Preambles to Final Rules) - Table of Contents
• Record Type: Abatement Verification
• Section: 6
• Title: Section 6 - VI. Summary of the Economic Analysis of the Final Abatement Verification Rule

VI. Summary of the Economic Analysis of the Final Abatement Verification Rule

Under Executive Order (EO) 12866, OSHA is required to conduct an economic analysis of the costs, benefits, and economic impacts of major rules promulgated by the Agency. There are several criteria for determining which rules are major, as defined by the EO. The final abatement verification rule does not meet any of the criteria for a major rule. However, to provide employers, employees, and other interested parties with information on the data and reasoning relied on by the Agency, OSHA has analyzed the economic impacts of this rule. The complete Final Economic Analysis is available in the docket for this rulemaking [Docket C-03].

The final abatement verification regulation requires employers who have been cited for violations of the Occupational Safety and Health Act to certify that they have abated the hazardous condition for which they were cited, to document the methods they have used to abate the hazard, and to notify those employees who were exposed to the hazard of the abatement actions they have taken. In most cases, employers will be able to certify abatement using a simple one-page form letter supplied by OSHA. In cases involving more serious violations, additional abatement documentation is required.

OSHA has required employers to provide evidence of abatement for cited hazardous conditions for more than 20 years, following the procedures for abatement verification set forth in the Field Operations Manual and its successor publication, the Field Inspection Reference Manual. When employers did not provide the requested information, or provided insufficient information, the Agency wrote or phoned employers to prompt them to supply the requested information. If necessary, the Agency contacted employers repeatedly or made follow-up inspections to ensure that the cited violations had been abated. These dunning efforts are unnecessarily resource-intensive for both the Agency and cited employers. Employers who have in the past ignored Federal and State-plan agency requests for verification that abatement has taken place will now be required to provide these materials or risk being cited by OSHA.

The final regulation reduces the burden on cited employers by generally requiring less abatement information than before and by providing simple forms to assist employers to comply. (Employers may also use forms of their own design that contain the same information.) Several significant revisions made to the regulation since the proposal have reduced the costs employers will incur to comply. For example, under the final regulation:

* Violations that are immediately abated require no abatement certification.

* For other-than-serious violations, and for most serious violations, only a simple abatement letter is required to verify abatement (a sample format for this letter is provided by OSHA). Overall, OSHA estimates that 90 percent of all violations will require only a simple letter certifying that abatement has occurred.

* Employers are required to provide additional documentation (proof) of abatement only for the more serious violations. The Agency estimates that no more than sixteen percent of all serious violations will require such additional documentation.

* Abatement plans, when required, will generally be simple, one-page documents (see Appendix B).

* Progress reports, when required, have been simplified to require only a single-sentence description of the interim actions taken. OSHA is also providing a sample form for abatement plans and progress reports.

* For employers who have movable equipment that has been cited as a serious hazard by OSHA, the final regulation allows employers either to post a copy of the citation on the cited equipment or to attach a warning tag, supplied by OSHA or devised by the employer, to this equipment to alert affected employees to the presence of the hazard.

Summary of the Costs and Benefits of the Final Regulation

In most cases, OSHA estimates that the final regulation will reduce the costs that cited employers currently incur to verify abatement. This conclusion is based primarily on the fact that the final regulation will only affect those employers who are actually cited for violations (i.e., about two-thirds of inspected employers currently) and on evidence that most of these cited employers already supply Federal and State-plan enforcement agencies with more information on abatement than will be required under the final regulation. Overall, the cost of compliance for employers to verify abatement is estimated to be $2 million less per year than employers are currently incurring (estimated to be $4.4 million) to comply with OSHA's administrative procedures for abatement verification.

The Agency estimates that the final abatement verification regulation will save employers an additional $4 million annually because they will no longer expend their time and money to respond to dunning efforts to ensure that abatement has taken place. The final rule's net benefits, or cost savings, for employers are estimated to be $6 million annually: a $2 million savings in reduced paperwork to complete abatement verification forms and a $4 million savings in reduced personnel time and effort to respond to OSHA phone and mail inquiries about the status of abatement. In addition, the Agency estimates that Federal and State-plan agencies will experience resource savings of $4.5 million annually under the final regulation (i.e., will save this amount in personnel costs formerly expended in dunning activity and follow-up inspections). Other benefits of the final regulation include enhanced worker protection because hazards will be abated more quickly, and gre