In May 2016, the Occupational Safety and Health Administration amended 29 CFR §1904.35 to prohibit employers from retaliating against employees for reporting work-related injuries or illnesses. This revision to the recordkeeping regulations became immediately controversial when OSHA interpreted it to limit employers’ use of safety incentive policies and post-incident drug testing. After very limited enforcement of §1904.35(b)(1)(iv), OSHA has now issued a Memorandum to Regional Administrators, which the Agency represents is a clarification of its position on safety incentive policies and post-incident drug testing. The new Memorandum, issued October 11, appears to represent a change in tone rather than a substantive change in position, but it suggests a softer enforcement approach.

Safety incentive policies

OSHA’s May 2016 amendment made it clear that employee safety incentive policies premised on OSHA-recordable cases were suspect because they could have the effect, whether intended or not, of discouraging or deterring employees from reporting work-related injuries or illnesses. OSHA acknowledged at the time that such policies could be well-intended efforts by employers to encourage employees to work safely, but stated that there were better ways to accomplish that goal. Rather than tying safety incentives to recordable cases, OSHA suggested rewarding employees who participate in safety-related activities, such as identifying hazards or participating in accident investigations.

In the new Memorandum, OSHA again acknowledges that such policies may be motivated by an employer’s good faith intent to promote safety and health. OSHA emphasizes that rewarding employees for their participation in these types of proactive safety efforts will not violate § 1904.35(b)(1). According to the Memorandum, a safety incentive policy premised on OSHA recordables is not by itself prohibited. Rather, such policies will be considered violations only if they penalize employees for reporting work-related injuries or illnesses, or are implemented in a way that discourages reporting. The Memorandum does not directly address the value of possible rewards for achieving an accident-free period of time or meeting a recordable case target. (For example, offering a television as a reward instead of a pizza party.) Instead, OSHA clarifies that employees can use a safety incentive policy premised on OSHA recordables as long as the employer “has implemented adequate precautions to ensure that employees feel free to report an injury or illness.” These “adequate precautions” include a statement encouraging employees to report such cases, training employees about the importance of reporting such cases, offering other incentives that reward employees for identifying unsafe conditions or other proactive efforts, and evaluating or monitoring employees’ willingness to report injuries and illnesses. OSHA also says that in assessing an employer’s use of safety incentive programs, the Agency will look at whether “the consequence for reporting will be a lost opportunity to receive a substantial reward.” OSHA does not define what it considers to be a “substantial” reward.

Post-incident drug testing

When OSHA amended § 1904.35 in May 2016, some employers had mistakenly believed that the Agency intended to prohibit post-accident drug testing. Although OSHA’s initial guidance raised doubts about what type of drug testing would be permissible, it became clear that OSHA never intended to prohibit post-accident or random drug testing since § 1904.35 addresses only whether employees are being retaliated or discriminated against for exercising the right of reporting work-related injuries and illnesses. Post-accident testing usually occurs independent of the reporting of such cases, and random testing always does. To clarify its position, OSHA lists the following permissible drug testing:

  • Random drug testing.
  • Drug testing unrelated to the reporting of a work-related injury or illness.
  • Drug testing under a state workers’ compensation law.
  • Drug testing under other federal law, such as U.S. Department of Transportation regulations.
  • Drug testing to evaluate the root cause of a workplace incident that harmed or could have harmed employees.  If the employer chooses to use drug testing to investigate the incident, the employer should test all employees whose conduct could have contributed to the incident, not just employees who reported injuries.

Employer lessons

Although the new Memorandum at first blush appears to be a change in the Agency’s direction, upon a closer read, it largely restates the Agency’s positions, albeit arguably in a friendlier tone. Employers can continue to base safety incentive policies on OSHA recordables, but the rewards should be of relatively nominal value, such as pizza parties, tee shirts, or hats. Employers should avoid offering expensive gifts that an OSHA inspector would view as a “substantial” reward that would encourage employees not to report. Employers who provide incentives based on recordable cases should also balance those with other incentives based on proactive employee participation, like identifying unsafe conditions. And, of course, employers should provide training and monitoring, to be able to show that they have tried in good faith to ensure that employees are not being discouraged from reporting injuries or illnesses.

As to drug testing, OSHA has provided a list of permissible testing.  As a general rule, post-incident drug testing will be viewed favorably by OSHA if it either is specifically permitted by some federal or state legal requirement or provision, or if it is limited to testing individuals whose conduct could have contributed to the incident.

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