STATEMENT OF JOSEPH A. DEAR
ASSISTANT SECRETARY OF LABOR
FOR OCCUPATIONAL SAFETY AND HEALTH
BEFORE THE
COMMITTEE ON LABOR AND HUMAN RESOURCES
UNITED STATES SENATE

NOVEMBER 29, 1995

Madam Chairman and Members of the Committee:

Thank you for this opportunity to discuss S. 1423, the Occupational Safety and Health Reform and Reinvention Act. I am pleased to appear before you today to present the Administration's views on this legislation.

Before addressing S. 1423 I would like to provide a brief update on OSHA's current reinvention activities. During my appearance before the Committee last June I described in some detail the tremendous difference that OSHA has made to millions of America's working families--the large reduction in workplace fatalities, the positive impact of standards such as those for trenching, lead and cotton dust, and the effectiveness of OSHA's inspections in reducing injury rates. I also noted that in spite of these accomplishments, OSHA's work was far from done. Fatalities still occur at a rate of 17 workers a day, and another 16,000 workers are injured on the job every day.

Finally, I told you about the major reforms taking place within the New OSHA to reinvent the way we do business--changing our fundamental operating model from one of command and control to one that provides employers with a real choice between a cooperative partnership and a traditional enforcement relationship; eliminating or fixing out-of-date and confusing standards; and focusing on results rather than red tape. Let me briefly update you on the progress of these initiatives.

First, you may recall our discussion of the "Maine 200" program, which offered employers a choice of working in partnership with OSHA or facing stepped-up enforcement. This program was recently selected as one of the 1995 winners of the prestigious Ford Foundation Innovations in American Government Award. Similar programs have been started in Wisconsin and New Hampshire, and we are planning further expansion in additional states.

Second, the Focused Inspections in Construction Policy has been implemented throughout OSHA. The number of focused inspections rose from 377 in the first half of Fiscal Year 1995 to 996 in the second half of the year. We are convinced that this approach is an effective way (1) to promote the development and implementation of effective worksite safety and health programs and (2) to target the most hazardous operations on a construction worksite. We are developing a focused inspection policy for general industry.

At the same time, OSHA continues to enforce the law vigorously against those employers who ignore their responsibilities under law. In Fiscal Year 1995, for example, OSHA issued initial penalties of $100,000 or more against 122 employers compared with 68 such penalties in Fiscal Year 1994.

Third, OSHA is continuing its effort to reduce regulatory burdens. In December, for example, OSHA will publish a rule to remove more than 200 pages of outdated, duplicative, or problematic regulations from the Code of Federal Regulations (CFR). Altogether, OSHA's regulatory reform projects will eliminate more than 1,000 pages of regulatory text.

Work has also begun on rewriting OSHA's existing safety standards in plain English. Some of these outdated regulations were written more than thirty years ago in highly technical jargon based on industry consensus standards. The initial results of our revision show great promise--making OSHA's standards both shorter and much easier to understand.

In brief, OSHA is continuing to reinvent itself within the confines of our fundamental mission of protecting the health and safety of America's working men and women.

The Occupational Safety and Health Reform and Reinvention Act

Now, let me turn to S. 1423. First, I want to thank Senator Gregg, you Madam Chairman, and the other sponsors of the bill for your interest in improving federal oversight of workplace safety and health. The proposal before us today clearly represents an improvement over the OSHA reform proposals being considered by the House Committee on Economic and Educational Opportunities. While I have many concerns about S. 1423, I do want to recognize your good faith efforts to consider ways of improving the OSH Act.

Improving Worker Protections

Let me now discuss some concerns about the bill. I will begin with two general observations. First and foremost, any effort to improve federal oversight of workplace safety and health must improve worker protection. After all, the very purpose of the original Act was "to assure, so far as possible, every working man and woman in the Nation safe and healthful working conditions." However, while the bill provides employers with inspection exemptions, means of avoiding citations, defenses against citations, penalty reductions and other relief from enforcement, it does not appear to include provisions which would strengthen workers' rights or protections.

For example, millions of federal and state workers have no OSHA protection at all. While some House proposals have attempted to address this shortcoming, this bill does not. Similarly, there is a strong consensus that the Act's whistleblower protection needs improvement; even Representative Ballenger's bill addresses the problem. This bill does not. I believe that in addition to making needed reforms to streamline and target OSHA activities, any serious effort at OSHA reform must address worker rights and protections that lie at the heart of the Act. In that regard, S.1423 is seriously unbalanced.

Comparing S. 1423 to the "New OSHA"

Second, there are important parallels between the Administration's recent efforts to reinvent OSHA and the bill's provisions. We concur with the intent of S.1423 in providing incentives to improve the safety and health of their workers. However, there are distinct differences as well. First and foremost, while OSHA's many reinvention initiatives foster cooperative partnerships with employers, they are also premised on a credible enforcement program that serves as an additional incentive for employers to choose partnership.

In contrast, S. 1423's combination of exemptions, means of avoiding citations, defenses to citations, and penalty reductions would greatly weaken OSHA's enforcement program. Moreover, I am concerned that the bill would give future Administrations that may be less concerned with workers' safety the ability to weaken the agency's enforcement program even further.

In addition, I would urge a great deal of caution before casting even OSHA's own reinvention initiatives in legislative stone. For example, the principle of the Maine 200 Program--leveraging our limited resources by offering employers a choice between a cooperative partnership and traditional enforcement--is a sound one, but two years after beginning the program we are still defining the appropriate parameters for similar programs. Frankly, there are many good ideas for improving federal protection of worker safety and health, and many of these ideas can be translated into actual programs through a careful process of refinement based on pilot programs, stakeholder involvement, and simple trial and error. Many of S.1423's provisions, however, would impose new statutory changes without adequate consideration, testing or dialogue with stakeholders.

The dangers of precipitous change are illustrated by OSHA's former policy on recordkeeping. In the early 1980s the agency adopted a policy of exempting employers with "good" safety and health records from a workplace inspection. OSHA allowed employers to demonstrate their success simply by the number of injuries and illnesses recorded on their logs. Some members of Congress even wanted to enact this records-check exemption into law. However, OSHA soon found that a sizable number of employers were under-reporting injuries and illnesses at their work establishments and that many dangerous workplaces were not inspected as a result. In some cases we found that workers had been seriously injured or killed at workplaces that OSHA visited but, because the employers' record did not reflect actual injury experience, failed to inspect. The agency subsequently eliminated the records-check exemption. If this policy had been enacted into law it would have been much more difficult to change. Thus, I urge caution.

Conclusion

Madam Chairman, let me close by reiterating that any OSHA reform must improve worker protection. I appreciate the work you and your colleagues have done to develop this legislation, and recognize that it represents a significant improvement over legislation being considered in the House. However, I am deeply concerned by some of the bill's specific provisions as well as the non-inclusion of items such as increased public worker coverage. I look forward to working with you and the Committee to address our specific concerns.

This concludes my oral presentation. I would now like to submit for the record a more detailed analysis of the provisions of S. 1423. Further, I would be pleased to respond to questions from the Committee.

ANALYSIS OF S. 1423
ATTACHMENT TO TESTIMONY OF JOSEPH A. DEAR
ASSISTANT SECRETARY FOR OCCUPATIONAL SAFETY AND HEALTH
U.S. DEPARTMENT OF LABOR

November 29, 1995

Section 2. Employee Participation

Section 8(a)(2) of the National Labor Relations Act protects workers against employer-dominated company or sham unions. Section 2 of S. 1423 would exempt from the statutory protection of the NLRA any employee participation mechanism which deals at least in part with worker safety and health conditions and which does not involve the negotiation of a collective bargaining agreement. The Administration has opposed enactment of similar legislation (H.R. 743) in the House because it would undermine employee protection; this provision is objectionable on the same grounds.

Employee participation is vital to a safe work environment. But current interpretations of the NLRA allow the creation of employee involvement programs with appropriate protections. However, OSHA is concerned that this provision of S. 1423 would jeopardize a workers' right to choose a bargaining representative independent of their employer's influence.

Indeed, employers would be free to dominate, interfere with, or otherwise control any such entity provided that no collective bargaining agreement is negotiated. Employers could take advantage of this broad exception to NLRA section 8(a)(2) to exert undue influence on workers to deprive them of their statutory rights.

Section 3. Inspections

Small Business Exemption

Section 3 would exempt from inspection farms with fewer than 11 employees and establishments of fewer than 11 employees within industries that have injury or lost workday case rates below the national average. As a general matter, OSHA recognizes that small businesses face unique challenges and are deserving of special treatment from OSHA. But in our view, that should come in the form of compliance assistance and penalty reductions, where appropriate, not in the form of across-the-board exemptions from inspections. OSHA has serious concerns about this provision of S. 1423.

Although a similar exemption has been added to OSHA's appropriations bill for a number of years, workers at smaller establishments should be entitled to the same rights and protections as workers at larger establishments. In fact, workers at small establishments may be in increased danger; businesses with fewer than 11 workers account for 33% of all fatalities even though they account for less than 20% of all employees. Moreover, even small employers with poor safety and health records could qualify for the exemption if their industry has a low injury rate overall. Workers at these establishments need and deserve the protections of OSHA's targeted inspection program.

Even worse, S. 1423 would expand the current exemptions to ban targeted health inspections for the first time, without regard for the employer's occupational illness record. In enacting the small business appropriations rider in past years, Congress has repeatedly recognized the importance of such inspections by excluding them from the scope of the rider. Indeed, health inspections protect workers from latent hazards that many small employers may not even recognize. OSHA is not aware of any new justification or evidence which would warrant depriving millions of workers at small establishments of this critical protection against health hazards.

Employee Complaints

Section 3 would amend section 8(f)(1) of the OSH Act to require employees submitting written complaints to state (1) whether the alleged violation has been brought to the employer's attention, and (2) whether the employer has refused to remove the hazard. OSHA is concerned that this provision might discourage workers from filing complaints.

While in current practice OSHA typically asks employees whether they have alerted employers about the hazard in question, the agency does not require workers to respond. Many workers are afraid of retaliation by their employers, and experience with antidiscrimination complaints tells us that in many cases their fears are well-founded. Establishing the above statutory requirements--including a requirement that the worker indicate "whether the employer has refused to take any action" to correct the hazard--could easily be misunderstood as requiring workers to alert their employers as a prerequisite to filing a complaint. As such, this provision may cause a chilling effect on the filing of worker complaints, and a consequent reduction of worker protections. Alternatively, if workers were unaware of these provisions, employers would file procedural challenges to complaints which failed to provide the required responses, and OSHA might be precluded from conducting an inspection even when workers were facing substantial risks.

Disclosure of Complainant's Identity In Contested Cases

Section 3 would allow OSHA to disclose the complainant's name during prehearing discovery in a contested case. Currently, federal case law authorizes the protection of the complainant's identity. The courts have recognized that disclosure of the complainant's identity could have a chilling effect on employees' willingness to provide information to the government. While this provision is worded permissively and seems to allow this Administration to maintain that policy, future Administrations which may be less concerned with workers' rights could use this provision to disclose the complainant's name in all contested cases. More significantly, however, by allowing the disclosure of the complainant's identity, the bill significantly undermines the legal principle of confidentiality. Disclosure of a complainant's name against his or her wishes would have a substantial chilling effect on the filing of such complaints, to the detriment of worker safety, and accordingly, OSHA opposes any effort to weaken the protection of informant's identities under the law.

Complaints by Former Employees, Family Members, and Others

S. 1423 would allow OSHA to conduct a complaint inspection only if it is requested by an employee or employee representative. Although the full effects of this provision are unclear, it could be read to bar the agency from conducting inspections following complaints by former employees, family members of employees, physicians, or other concerned citizens. OSHA strongly opposes this provision.

The OSH Act requires OSHA to protect workers from workplace risks. As such, agency decisionmaking on whether to inspect following a complaint should be premised on the likelihood that such risks exist at the workplace in question, rather than on the identity of the complainant.

In fact, in a number of cases OSHA has found serious hazards after responding to complaints filed by family members of employees or former employees. For example, in Pittsburgh, Pennsylvania, the wife of an employee of the E. Smalis Painting Company filed a complaint after her husband was hospitalized with blood lead levels of 160 micrograms per deciliter. (OSHA's lead standard requires that workers be removed from the workplace and given medical attention when blood lead levels reach 50 micrograms.) Upon inspection, OSHA found that more than 20 other workers performing abrasive blasting and painting work on a bridge were also exposed to excessive lead levels. OSHA issued citations for numerous violations, including nine of an egregious nature, and proposed penalties of $5.1 million.

Similarly, last year a Troy, Ohio doctor reported to OSHA that a local hospital had been treating several people a day for injuries such as flashburns to the eyes, burns to the extremities and serious lacerations. OSHA's subsequent inspection uncovered amputations, smashed fingers, broken bones, lacerations, back injuries and flashburns. Under S. 1423, OSHA would have been precluded from inspecting these employers because the complaints were not filed by employees, despite the obvious risks faced by workers at the two facilities.

A Worker's Right to an OSHA Inspection

In enacting the OSH Act in 1970, Congress established two important principles: first, that employers have an obligation to provide a safe workplace, and second, that workers have a right to an OSHA inspection where dangerous hazards are present. Section 3 of S. 1423 would repeal this second principle. OSHA opposes the elimination of this important worker right.

Currently, OSHA is required to conduct an inspection in response to a complaint when the agency determines that there are reasonable grounds to believe that a violation exists that threatens physical harm. S. 1423 would give OSHA the discretion to decline to inspect even where there are clear dangers to workers. While this Administration would continue to inspect in such situations, OSHA is deeply concerned about the abrogation of this fundamental right by future Administrations less committed to worker safety and health.

Moreover, workers have had the right to an OSHA inspection for 25 years, and no evidence has been offered to warrant its wholesale repeal. Nor is it an ineffective use of the agency's resources. In fact, OSHA finds serious hazards at the same rate for complaint-based inspections as it does for targeted inspections.

Limiting the Scope of Inspections

Section 3 of S. 1423 would also prohibit OSHA from expanding a complaint inspection beyond the hazards identified in the complaint. The only exception would be for violations "observed" during the inspection. This would exclude worksite areas not covered by the complaint, as well as many hazards (such as airborne toxins) which cannot be observed. Thus, if a compliance officer, responding to a complaint, encountered an employer who blatantly disregarded worker safety, or discovered a pattern of serious injuries by reviewing the employer's injury log, he or she would be precluded from expanding the inspection to assure protection of all workers at the facility.

This provision would substantially impede OSHA's ability to protect workers. For example, last January OSHA responded to a complaint at Glacier Vandervill, a manufacturer of fluid film bearings located near Columbus, Ohio. The complaint alleged that employees exposed to lead were not receiving blood lead level evaluations as required by the standard. When OSHA entered the plant and examined the injury/illness logs, the compliance officer discovered large numbers of lead exposure violations-- but also found that workers had suffered amputations and crushing injuries from mechanical power presses. In response, OSHA then expanded the investigation to include the entire facility. The agency eventually cited the company for overexposure to lead, failure to establish a hearing conservation program, deficiencies in power press guarding and safety controls, violations of the standard on confined spaces, fall protection violations, as well as an inadequate lockout/tagout program. Under S. 1423, however, OSHA's inspection would have been limited to checking for blood lead problems and the agency would have been precluded from protecting workers from other substantial hazards.

Similarly, when OSHA expanded a complaint-based inspection at Eastern Prestressed Concrete in Hatfield, Pennsylvania, the agency found serious hazards such as unsafe industrial trucks, improper use of cranes, unguarded floor openings, and unguarded conveyor belts, saws and grinders. The OSHA Area Director commented that "with 30 years' experience inspecting heavy equipment I have never observed equipment that was operated in such a hazardous condition." Many of these hazards were not raised in the initial complaint, as a result, under S. 1423, OSHA would have been precluded from identifying many of these hazards and protecting workers from them.

The Use of Telephone and Facsimile Machines

S. 1423 would allow OSHA to investigate complaints by telephone, facsimile or other appropriate methods instead of conducting an inspection. While OSHA has itself found these investigation methods desirable in many situations, they should not be used at the expense of the fundamental worker right to an inspection.

In the past two years, OSHA has reduced the time from the filing of a complaint to abatement of hazards by using telephone and facsimile methods for investigating informal complaints. In addition, several offices have experimented with these methods for investigating formal worker complaints, but only where the complaining worker agrees. These methods should not be acceptable where a worker seeks to exercise his or her statutory right to an inspection.

Determining the Complainant's Motivation

Section 3 of S. 1423 would allow OSHA to forego a complaint inspection if it determines that the complaint was made for reasons other than safety and health--even where the workers in question are at substantial risk. Again, the agency's determination as to whether to inspect following a complaint should be based on the likelihood that workers are at risk--not on the motivation of the complainant. Where workers face substantial hazards, OSHA should act--and is compelled by statute to act--to protect them.

Moreover, it would be very difficult for OSHA to determine the complainant's motivation. This exercise would consume scarce agency resources and delay inspections. Ultimately, the agency should continue to inspect where it has reasonable cause to believe that workers are at risk.

Section 4. Worksite-Based Initiatives

Section 4 of S. 1423 would authorize exemptions from scheduled inspections if an employer (1) had been inspected under a consultation program or independent audit by a certified auditor during the preceding year, or (2) has an "exemplary" safety and health record and maintains a safety and health program. OSHA has a number of significant concerns about this provision.

The Use of Broad-Based Exemptions

This provision--like many of OSHA's own reinvention initiatives--seeks to leverage the agency's limited resources, encourage employer/employee cooperation, and reduce the adversarial nature of the relationship between OSHA and employers. Nevertheless, the broad exemption described above does not represent the best balancing of these goals with our statutory mission to protect workers.

Currently, OSHA allows an exemption from scheduled inspections only under limited circumstances, when an employer demonstrates a superior commitment to worker safety and health. Under the VPP program, for example, participants must meet stringent criteria that demonstrate continued excellence in safety and health as a prerequisite to an exemption. Moreover, VPP sites receive a comprehensive on-site inspection by OSHA representatives and are subject to periodic monitoring as a condition of continuing VPP approval.

By contrast, S. 1423 would grant a broad exemption whenever an employer undergoes even a very limited consultative visit. Unfortunately, all too often such visits do not reflect employer commitment to protect workers. For example, MIT Tank Wash of Garden City, Georgia, received a state consultation visit in 1990, and was told to purchase a retrieval system to rescue workers cleaning tanks. The employer purchased the equipment, but returned it three months later. Subsequently an employee cleaning a chemical tank was overcome by toxic fumes and died. The employer was sentenced to 6 months in prison and fined $190,000.

Third-Party Certification

In addition, there are many unresolved issues surrounding third-party certification. The Vice President's National Performance Review recommended that OSHA consider the use of employer self-audits as a leveraging device, with the audits being performed by employees or by third parties.

Last year, however, at an OSHA stakeholder meeting, representatives of industry and labor expressed concern about the use of third-party certification in the area of occupational safety and health. They raised questions such as: Who would certify the third parties? What would the certification criteria be? Should OSHA divert its limited resources to facilitate a costly certification process? Who would pay for the audit? If the employer pays, would it create a conflict of interest? What is the legal liability of private sector experts certifying a workplace which later suffers a serious accident? Would third-party auditors be agents of OSHA, employees or the employer?

Some urged OSHA to restrict third party audits to the employer's safety and health program rather than to the entire workplace. Others encouraged us to evaluate the effectiveness of existing audit programs in the context of corporate-wide settlements and existing safety and health committees before embarking on the untested waters of third-party certification.

OSHA is particularly concerned about the resource issues. Requiring OSHA to certify individuals to provide a worksite evaluation leading to exemption from inspection would place an enormous burden on the agency, both in the pre-certification process and in quality control. Certification is a time-consuming process, as OSHA has seen when it accredits testing laboratories under existing statutory authority. At the same time, reliance on the private sector for such certifications, while at the same time exempting the employer's worksite from the possibility of on-site inspection, would deprive the agency of sufficient "quality control" over both certifications and the safety and health audits performed by certified individuals.

Ultimately, the concept of third-party certification may have some utility as a means of leveraging scarce resources--but it is simply too early to tell. Rather than enacting a broad-scale statutory scheme, this concept should be explored further through pilot programs. For example, the State of Virginia is testing a consultant certification process in which state personnel will accompany the private consultant during the workplace visit to verify the consultant's knowledge and skills. The results of this and other similar initiatives should be reviewed and the necessary monitoring and quality control mechanisms must be in place before decisions are made as to whether third-party certification should be used on a broader scale.

"Exemplary" Safety and Health Records

Section 4 also allows exemptions for employers who have an "exemplary" safety and health record (fewer lost workdays than the applicable industry average) and a safety and health program (including procedures for assessing and correcting hazards, employee participation, and employee training). While the bill's sponsors are to be applauded for recognizing the importance and effectiveness of safety and health programs, a broad-scale exemption is not warranted in these circumstances. Instead, such programs should be promoted through penalty reductions, through incentive programs such as Maine 200 and Focused Inspections in Construction, and through the development of a Safety and Health Program Standard.

In addition, an employer with a distinctly average safety record should not be deemed "exemplary" or rewarded with an exemption from scheduled inspections on that basis alone. This is a particular problem in high-hazard industries where injury rates are excessive across the board. For example, it would be unwise to exempt meatpacking employers with average safety records, because their industry "average" is five times the national average.

In fact, the use of an employer's injury data as a primary or exclusive basis for enforcement relief poses problems in and of itself. First, as OSHA learned first-hand in the 1980s, such a practice encourages some employers to falsify their records. (The bill allows OSHA to conduct random audits to guard against this problem, but would only allow the agency to audit an employer's records, not actual working conditions.) Second, it ignores hazards that pose long-term health risks to workers. While an employer's injury data is relevant to assessing the need for an OSHA inspection, it would be unwise to use it as the sole or primary basis for an inspection exemption.

OSHA Access to Employer Self-Audit Records

S. 1423 would also prohibit OSHA access to an employer's self-audit records unless a worker was killed or injured on the job. (The bill includes another exception--allowing OSHA access when the employer has not corrected the hazards identified in the self-audit--but it would be impossible for OSHA to know whether this was the case without first having access to the records.) This provision does not represent an appropriate balance between an employer's desire for confidentiality and OSHA's need to determine whether employers were aware of serious hazards prior to an inspection. Moreover, this provision could be read to deny OSHA access to a host of records required by the agency's own standards and regulations, including exposure monitoring, process hazard evaluation reports, hearing conservation tests, and other similar records.

Reasonable access to employer self-audit records is essential to the Department's health and safety efforts. In some cases, this information will be critical to OSHA for enforcement purposes. More significantly, at a time when promising initiatives are underway at OSHA to evaluate and reward efforts by employers to improve employee health and safety, OSHA would be completely unable to assess the effectiveness or good faith of employer-initiated safety programs without access to underlying documentation. Finally, allowing employers to refuse to disclose their health and safety records will, for some employers, remove the incentive to take prompt and effective action to eliminate any hazards disclosed by these in-house reports.

In practice, an employer's self-audit records are not used against employers who have made good faith efforts to protect their workers. As a result, this provision would only protect employers who have identified hazards and consciously failed to correct them.

Section 5. Employer Defenses

Employer Knowledge

Current law prevents OSHA from issuing citations for serious violations unless the employer knew or "could" have known of the violation. Section 5 of S. 1423 would prevent OSHA from issuing a citation for any violation unless the employer "knew, or with reasonable diligence would have known" of the violation.

Although the impact of these changes is not altogether clear, they appear to be intended to increase the agency's burden of proving violations of the Act or OSHA standards. The agency's ability to protect workers could well be compromised as a result.

Employee Misconduct Defense

Section 5 also attempts to codify the so-called "employee misconduct" defense. As a general matter, OSHA supports the codification of this longstanding employer defense. This provision, as we understand it, would require the employer to prove this affirmative defense, as is now the case. To the extent that the requirements of this provision track existing OSHA case law, OSHA has no objection to this provision.

The "Alternative Methods" Defense

Section 5 would also create an entirely new statutory defense to an OSHA citation, based on an employer's demonstration that employees were protected by alternate methods equally or more protective than those required by the standard the employer violated. This provision could seriously undermine OSHA's standards, and turn every enforcement action into a costly and time-consuming variance proceeding.

The OSH Review Commission and the courts have held repeatedly that when OSHA's standards require employers to adopt specific precautions for protecting employees, employers must comply in the manner specified. Under current law, employers have the right to select alternative means of compliance only when literal compliance is impossible or would pose a greater hazard to employees. In "greater hazard" cases the Commission requires an employer to show that a variance has either been sought or would be inappropriate.

Under these rules, the contest rate has remained relatively low; under 10% of all citations are contested currently. Under this provision of S. 1423, however, virtually every employer cited for violations of the OSH Act or OSHA standards could claim that an alternative means of compliance was as effective as the standard in question. In effect, standards would no longer be mandatory, but would be subject to challenge--and potential waiver--in every individual contested case. This provision could have a substantial impact on agency resources, and greatly increase litigation burdens on OSHA, the OSH Review Commission, and the federal courts.

Section 6. Inspection Quotas

Section 6 of the bill would prohibit the Secretary from establishing "quotas" for inspections, citations or penalties. Since OSHA has never used such quotas, this provision would appear to be unnecessary.

For many years, Congress used inspections, citations and penalties as measures of OSHA's performance. As a result, the agency used them as performance measures as well. These performance measures may have contributed to OSHA's reputation as a nitpicky, overzealous enforcement agency.

To address this problem, OSHA eliminated these performance measures last year. OSHA is currently in the process of developing a performance measurement system that is more closely tied to improvements in worker safety and health.

Section 7. Warnings in Lieu of Citations

Currently, the OSH Act provides that OSHA "shall" issue a citation for each violation it discovers during an inspection. Section 7 of S. 1423 would change this rule to "may". As a practical matter, the impact of this proposed change is unclear. As a general matter, federal case law demonstrates that OSHA possesses a greater degree of prosecutorial discretion than was recognized in the early years of the agency. The agency has discretion under existing law to establish programs in which it does not issue a citation for every violation it finds. For example, OSHA has used this discretion to establish programs such as Maine 200.

Nonetheless, OSHA is concerned that the changes proposed in this section might be misunderstood by some employers as a limitation on OSHA's authority to issue citations. Among other things, OSHA is particularly troubled by paragraph 2(B), which allows the issuance of a "warning in lieu of a citation" for violations that the employer "acts promptly to abate." Even though it allows OSHA the discretion to issue citations in such circumstances, this provision may signal employers that they need not take preventive steps to protect their workers prior to an OSHA inspection. As such, this provision could undermine both the preventive purpose as well as the deterrent effect of OSHA's enforcement program.

Prompt abatement of hazards should be encouraged, but it should be encouraged through penalty reductions, not by eliminating any citations whatsoever for the violations. Otherwise, employers who made good faith efforts to protect workers before an OSHA inspector arrived at their door would be treated the same as neglectful employers that ignored their workers' safety until the inspection.

Section 8. Penalty Reductions

Section 8 of the bill would make several major changes in OSHA's penalty policies, reducing penalties for nonserious violations, limiting penalties for recordkeeping or "paperwork" violations, revising the factors to be considered in assessing a penalty, and providing for substantial penalty reductions in specific situations. While OSHA's recent changes in its penalty policies bear some resemblance to these provisions of S. 1423, there are many very significant differences. For example, while OSHA's penalty reduction policies generally reward employers for protecting workers before OSHA arrives at the doorstep, many of these changes would reward employers who did little until OSHA arrived. As a result, OSHA does not support the bill's penalty reduction provisions.

$100 Penalty Limit for Non-Serious Violations

Section 8 would reduce the maximum penalty for non-serious violations from $7000 to $100. As a general matter, OSHA typically does not assess penalties against employers for non-serious violations: in FY 1995, for example, employers were not penalized for 92% of all non-serious violations. However, the average penalty for the other 8% of these violations was $739. These violations included such hazards as inadequate fire exits and failure to monitor excessive noise levels. OSHA needs to retain the authority to levy significant penalties for violations which may threaten workers even if they do not technically meet all of the criteria to be classified as serious.

Posting and Paperwork Violations

OSHA is taking steps to limit citations and penalties for paperwork violations unrelated to safety and health. For example, citations for the most common paperwork violations declined 35% between 1991 and 1994. OSHA's compliance officers no longer cite for minor paperwork requirements; they advise and educate the employer instead. To illustrate, for years OSHA issued thousands of violations annually for failing to put up the required OSHA poster. Last year, OSHA decided just to give employers a poster and ask them to put it up. The number of poster violations is now at or near zero. Similarly, if there are no injuries or illnesses to record, OSHA no longer cites an employer for failing to complete the agency's recordkeeping requirements.

At the same time, the agency needs to retain the discretion to penalize employers who under-report injuries and illnesses. Without accurate data, OSHA would be unable to accurately determine the nature of workplace problems, would not know where to target inspections, and would be unable to evaluate the effectiveness of its interventions. Furthermore, the bill fails to recognize that there are many other important "paperwork" requirements that significantly and directly protect workers from serious injury or illness. Penalties for OSHA violations concerning written lockout/tagout programs, process hazard analysis at chemical plants, hearing conservation and toxics exposure monitoring records all would be reduced by the bill. The proposed penalty changes for paperwork violations may unnecessarily restrict the agency's ability to assess penalties in appropriate cases.

Consideration of Mitigating Factors

S. 1423 would expand the statutory list of factors to be considered in the assessment of penalties, adding such factors as whether the employer abated the hazard after the inspection, whether the violations involved paperwork requirements, whether employee misconduct contributed to the violation, and whether the penalty might affect the employer's ability to remain in business.

OSHA is currently revising its penalty system to provide for a larger penalty reduction for small employers and for employers demonstrating good faith. Of S. 1423's four proposed factors listed above, three fit within the general parameters of OSHA's enforcement program and would be suitable considerations.

OSHA has serious reservations, however, about proposed factor (G) which requires the agency to consider the effect of the penalty on the employer's ability to stay in business. In practice, many of the most negligent companies are those operating on the margins; they are looking for any means of cutting costs to gain a competitive advantage, and worker protections are often sacrificed. For example, Imperial Foods of Hamlet, North Carolina cut costs by not installing a sprinkler system and by not maintaining its fryer fuel lines. The company saved money, but twenty-five workers paid with their lives when a flash fire started on the fryer line. Under S. 1423, OSHA would be precluded from assessing significant penalties against similar employers operating on the margins by endangering their workers. Minimum Penalty Reductions (25% to 75%)

S. 1423 would reduce penalties by a minimum of 25% if the worksite has either an "exemplary" safety record or a safety and health program (a minimum of 50% if it has both). Again, OSHA is concerned about the definition of "exemplary," which would include hundreds of thousands of employers whose records are not exemplary at all. In addition, stating penalty reductions in terms of a "minimum" reduction leaves the agency unable to take account of qualitative differences in employer behavior. For example, other things being equal, an employer with a superior safety and health program should receive a greater penalty reduction than an employer with merely an adequate program.

Another provision would reduce penalties by a minimum of 75% if the worksite has received a consultation visit or third-party audit within the preceding year and the employer has abated any identified hazards within a reasonable period of time. In addition to OSHA's concern about minimum penalty reductions, and its concern regarding third-party certification, this provision would grant a substantial penalty reduction even for consultation visits with very limited scope. In fact, it would allow such a reduction even where the employer has a substantial history of safety and health violations and workplace injuries. In addition, employers would remain eligible for these reductions even if they allowed safety and health conditions to deteriorate after initially complying with a consultant's recommendations. For these reasons, OSHA does not support these proposed penalty reductions.

Section 9. Consultation Programs

Section 9 would codify the consultation services currently funded by OSHA under section 7(c)(1) of the OSH Act. As a general matter, OSHA supports the codification of current consultation programs.

The requirement for at least 15% of total OSHA appropriations to be spent on education, consultation, and outreach efforts would probably not require any adjustments in OSHA programs. Nevertheless, it may be unwise to tie the agency's consultation efforts to a specific percentage of appropriations. In future years, OSHA's appropriation may increase or decrease, and the appropriate mix of consultation and enforcement might shift as well.

Section 10. VPP Programs

Section 10 would codify the existing Voluntary Protection Program. As a general matter, OSHA supports the codification of current excellence recognition programs.

As you know, OSHA's VPP program has traditionally been reserved for employers that have demonstrated the highest commitment to worker safety and health. Thus OSHA has some concern that this provision of S.1423, as drafted, does not define this primary characteristic of VPP. Nor would the bill require VPP participants to provide meaningful employee involvement in safety and health. Ideally, any codification of this program should limit participation to employers that have truly superior safety and health records, but should allow OSHA the flexibility to define (and modify as necessary) the specific criteria for participation in the program.

Notably, this section would also authorize OSHA to charge an annual fee to VPP participants; the fees would not be available to support administration of the VPP, but would be deposited in the general treasury of the United States.

VPP participants have expressed a preference for "in-kind" contributions to support the VPP rather than participation fees. On that basis, they have worked with OSHA to establish a mentoring program through which participants help candidate companies to improve their safety and health programs and prepare the VPP application so that they may qualify to participate. This greatly reduces the time required of OSHA to assist employers in these processes. In addition, the participants provide "OSHA Volunteers" who are safety and health professionals from their companies who, after OSHA training, assist OSHA in conducting the VPP site reviews that are necessary for approval to participate in the VPP. These volunteers, serving as "Special Government Employees," significantly reduce the demand on OSHA resources for site reviews. This "in-kind" arrangement may be preferable to a fee arrangement.

Section 10 would also require OSHA to establish cooperative agreements to encourage the establishment of comprehensive safety and health management systems. OSHA has no objection to this provision.