[Federal Register: January 19, 2001 (Volume 66, Number 13)]
[Rules and Regulations]
[Page 6065-6114]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ja01-24]
[[pp. 6065-6114]] Occupational Injury and Illness Recording and Reporting
Requirements
[[Continued from page 6064]]
[[Page 6065]]
clearly not going to make an investigation. When a worker is killed or
injured in a motor vehicle accident on a public highway or street, OSHA
is only likely to investigate the incident if it occurred in a highway
construction zone. Likewise, when a worker is killed or injured in an
airplane crash, a train wreck, or a subway accident, OSHA does not
investigate, and there is thus no need for the employer to report the
incident to OSHA. The text of paragraphs 1904.39(b)(3) and (4) of the
final rule clarifies that an employer is not required to report these
incidents to OSHA. These incidents are normally investigated by other
agencies, including local transit authorities, local or State police,
State transportation officials, and the U.S. Department of
Transportation.
However, although there is no need to report these incidents to
OSHA under the 8-hour reporting requirement, any fatalities and
hospitalizations caused by motor vehicle accidents, as well as
commercial or public transportation accidents, are recordable if they
meet OSHA's recordability criteria. These cases should be captured by
the Nation's occupational fatality and injury statistics and be
included on the employer's injury and illness forms. The statistics
need to be complete, so that OSHA, BLS, and the public can see where
and how employees are being made ill, injured and killed. Accordingly,
the final rule includes a sentence clarifying that employers are still
required to record work-related fatalities and injuries that occur as a
result of public transportation accidents and injuries.
Although commenters are correct that OSHA only rarely investigates
motor vehicle accidents, the Agency does investigate motor vehicle
accidents that occur at street or highway construction sites. Such
accidents are of concern to the Agency, and OSHA seeks to learn new
ways to prevent these accidents and protect employees who are exposed
to them. For example, OSHA is currently participating in a Local
Emphasis Program in the State of New Jersey that is designed to protect
highway construction workers who are exposed to traffic hazards while
performing construction work. Therefore, the final rule provides
provisions that require an employer to report a fatality or multiple
hospitalization incident that occurs in a construction zone on a public
highway or street.
Other issues related to the reporting of fatalities and multiple
hospitalization incidents. Commenters also raised several issues not
addressed in the proposed rule. The National Pest Control Association
(NPCA) (Ex. 15: 229) asked OSHA to allow for a longer reporting time in
those rare cases where the owner of a small business was himself or
herself incapacitated in the accident, suggesting that:
[l]anguage be included in the rule revisions to provide for
additional time to report fatalities and multiple hospitalizations
if the employer is hospitalized or otherwise incapacitated. * * *
Typically, pest control companies are very small operations. Many
employ five or less employees. Often times the business owner is out
in the field as much as the employees. So, let's say an employer is
hospitalized during a work-related incident that also claimed the
life of an employee, who happened to be the lone employee. Can the
employer really be expected to report the fatality within eight
hours? In most instances the eight hour requirement is rather
reasonable, however, in this circumstance it is not. NPCA asks that
the agency consider adding language allowing small employers who are
hospitalized additional time to report a multiple hospitalization or
fatality.
OSHA has decided that there is no need to include language to
address this very rare occurrence. If such an unfortunate event were to
occur, OSHA would certainly allow a certain amount of leeway for the
employer or a representative to report the case. The OSHA inspector
can, for good cause, provide the employer with reasonable relief from
citation and penalty for failing to report the incident within 8 hours,
especially if the employer reports it as soon as possible.
Bell Atlantic (Ex. 15: 218) and the Dow Chemical Company (Ex. 15:
335) recommended that OSHA include additional provisions for employees
who are admitted to the hospital for observation only. Bell Atlantic's
comments were: ``Bell Atlantic also recommends that the hospitalization
requirement [for reporting multiple hospitalizations] be limited to
those workers that are hospitalized overnight for treatment. The
current proposal does not address hospitalization for observation, only
that they are non-recordable.''
OSHA disagrees with these comments, as it did when similar comments
were submitted to the record in the 1994 rulemaking on this provision
[59 FR 15596-15597]. If three or more workers are hospitalized
overnight, whether for treatment or observation, the accident is
clearly of a catastrophic nature, and OSHA needs to learn about it
promptly. Additionally, the inpatient distinction provides an easy-to-
understand trigger for reporting. In many instances, a patient who is
admitted for observation as an inpatient later receives treatment after
the true nature and extent of the injury becomes known. At the time of
the incident, when reporting is most useful, the employer is unlikely
to know the details about the treatment that the worker is receiving
(e.g., observation only or medical treatment). However, the employer
will probably know that the employee has been admitted to the hospital
as an inpatient.
The United Parcel Service (UPS) (Ex. 15: 424) suggested that the 8-
hour time period for reporting apply only when a higher ranking
official of the company learns of the fatality or catastrophe, stating:
[U]PS supports this proposal, with one modification: the
provision that the eight-hour limit begins to run on notice to an
employee or agent is over broad. It may happen that workers who
learn of the death or hospitalization of a co-worker do not notify
the employer in sufficient time to enable the manager in charge of
contacting OSHA to meet the deadline. The better rule, therefore, is
to require OSHA modification within eight hours of the incident's
being reported to a supervisor, manager, or company official. This
allowance is particularly necessary for incidents occurring away
from the work site.
The issue of who within the company must learn of the incident
before the reporting deadline was also discussed in the 1994 rulemaking
[59 FR 15597]. As in the former rule, the final rule requires reporting
within 8 hours of the time any agent or employee of the employer
becomes aware of the incident. It is the employer's responsibility to
ensure that appropriate instructions and procedures are in place so
that corporate officers, managers, supervisors, medical/health
personnel, safety officers, receptionists, switchboard personnel, and
other employees or agents of the company who learn of employee deaths
or multiple hospitalizations know that the company must make a timely
report to OSHA.
Section 1904.40 Providing Records to Government Representatives
Under the final rule, employers must provide a complete copy of any
records required by Part 1904 to an authorized government
representative, including the Form 300 (Log), the Form 300A(Summary),
the confidential listing of privacy concern cases along with the names
of the injured or ill privacy case workers, and the Form 301 (Incident
Report), when the representative asks for the records during a
workplace safety and health inspection. This requirement is unchanged
from the corresponding requirement in OSHA's former recordkeeping rule.
However, the
[[Page 6066]]
former rule combined the requirements governing both government
inspectors' and employers' rights of access to the records into a
single section, section 1904.7 ``Access to Records.'' The final rule
separates the two. It places the requirements governing access to the
records by government inspectors in Subpart E, along with other
provisions requiring employers to submit their occupational injury and
illness records to the government or to provide government personnel
access to them. Provisions for employee access to records are now in
section 1904.35, Employee Involvement, in Subpart D of this final rule.
The final regulatory text of paragraph (a) of section 1904.40
requires an employer to provide an authorized government representative
with records kept under Part 1904 within four business hours. As stated
in paragraph 1904.40(b)(1), the authorized government representatives
who have a right to obtain the Part 1904 records are a representative
of the Secretary of Labor conducting an inspection or investigation
under the Act, a representative of the Secretary of Health and Human
Services (including the National Institute for Occupational Safety and
Health (NIOSH) conducting an investigation under Section 20(b) of the
Act, or a representative of a State agency responsible for
administering a State plan approved under section 18 of the Act. The
government's right to ask for such records is limited by the
jurisdiction of that Agency. For example, a representative of an OSHA
approved State plan could only ask for the records when visiting an
establishment within that state.
The final rule allows the employer to take into account
difficulties that may be encountered if the records are kept at a
location in a different time zone from the establishment where the
government representative has asked for the records. If the employer
maintains the records at a location in a different time zone, OSHA will
use the business hours of the establishment at which the records are
located when calculating the deadline, as permitted by paragraph
1904.40(b)(2).
The former rule. Paragraph 1904.7(a) of the former OSHA
recordkeeping rule required employers to provide authorized government
representatives with access to the complete Form 200, without the
removal of any information (unredacted). That paragraph read as
follows:
Each employer shall provide, upon request, records provided for
in Secs. 1904.2, 1904.4, and 1904.5, for inspection and copying by
any representative of the Secretary of Labor for the purpose of
carrying out the provisions of the Act, and by representatives of
the Secretary of Health, Education, and Welfare during any
investigation under section 20(b) of the Act, or by any
representative of a State accorded jurisdiction for occupational
safety and health inspections or for statistical compilation under
sections 18 and 24 of the Act.
The proposal. The proposed regulation was consistent with OSHA's
former recordkeeping regulation in that it continued to require
employers to provide government representatives with access to the
entire OSHA injury and illness Log and Summary (Forms 300 and 300A) and
OSHA Incident Record (Form 301). Proposed paragraph 1904.11(a),
``Access to Records,'' read as follows:
Government Representatives. Each employer shall provide, upon a
request made in person or in writing, copies of the OSHA Forms 300
and 301 or equivalents, and year-end summaries for their own
employees, and injury and illness records for ``subcontractor
employees'' as required under this Part to any authorized
representative of the Secretary of Labor or Secretary of Health and
Human Services or to any authorized representative of a State
accorded jurisdiction for occupational safety and health for the
purposes of carrying out the Act.
(1) When the request is made in person, the information must be
provided in hard copy (paper printout) within 4 hours. If the
information is being transmitted to the establishment from some
other location, using telefax or other electronic transmission, the
employer may provide a copy to the government representative present
at the establishment or to the government representative's office.
(2) When the request is made in writing, the information must be
provided within 21 days of receipt of the written request, unless
the Secretary requests otherwise.
The proposal thus would have continued to combine the records
access provisions for government personnel with the access provisions
for employees, former employees and employee representatives. The
proposed rule would have modified the former rule in several ways,
however (61 FR 4038). First, it would have required the employer to
provide copies of the forms, while the former rule simply required the
employer to provide records for inspection and copying. Second, the
proposal would have required the employer to produce the records within
4 hours, while the former rule did not specify any time period. Third,
the proposed rule would have allowed an employer either to provide the
records at the inspection location, or to fax the records to the
government inspector's home office. This would allow employers to keep
their records at a centralized location as long as the government
inspector could obtain the information promptly. Fourth, the proposed
rule would have required the employer to send Part 1904 information to
OSHA within 21 days of the date on which a written request was received
from the Agency. This time limit for mailed survey forms was
established in section 1904.17 of the former rule and is carried
forward in this final rule at section 1904.40.
The proposal also requested comment on situations where the 4-hour
requirement might be infeasible and posed several questions for the
public to consider:
OSHA solicits input on these time limitations. Are they
reasonable? Should they be shortened or extended? Should the
requirement be restricted to business hours, and if so, to the
business hours of the establishment to which the records pertain or
the establishment where the records are maintained?
Many commenters agreed with OSHA that government representatives
should have access to the records themselves (see, e.g., Exs. 15: 78,
163, 218, 359, 369, 405). For example, Alliant Techsystems remarked
``[c]opies of this data should be given to OSHA personnel'' (Ex. 15:
78). A number of commenters agreed that OSHA personnel should have
access to the OSHA 301 records, even though they did not think that
employees and their representatives should have access to the Form 301
(see, e.g., Exs. 33, 15: 1, 39, 76, 82, 83, 159, 183, 185, 193, 226,
330, 335, 338, 359, 373, 383, 385, 389, 399, 409, 423). For example,
the American Meat Institute (AMI) (Ex. 15: 330) ``[b]elieves that it is
imperative that personal identifiers be explicitly excluded from
information that would be readily available to anyone, with the single
exception of an interested government regulator.'' The Texas Chemical
Council (Ex. 15: 159) argued: ``[L]ogs with employees'' names should
only be accessed by selected individuals (i.e., OSHA inspectors,
medical personnel, etc.). Posting or viewing of OSHA 300 log or 301
reports without names should be the avenue for employees to access
information.''
Other commenters disagreed with one or more of the proposed access
provisions (see, e.g., Exs. 25, 27, 15: 13, 22, 39, 60, 82, 100, 102,
105, 111, 117, 119, 124, 139, 142, 154, 170, 174, 181, 182, 183, 193,
215, 239, 258, 277, 294, 297, 305, 313, 315, 317, 318, 346, 347, 352,
353, 359, 375, 378, 390, 392. 393, 395, 397, 399, 409, 425, 430, 440.)
These commenters raised a wide range of issues. These included the
right of OSHA inspectors to access the records; employers' Fourth
Amendment rights; the way the government handles
[[Page 6067]]
information in its possession; employee privacy concerns; and the
proposed requirement to produce the records within 4 hours. On the
right of OSHA inspectors to access the records, for example, the
Douglas Battery Manufacturing Company (Ex. 15: 82) stated:
[n]one of these records should be * * * used to conduct an OSHA
compliance inspection. Such action would be in direct conflict with
the purpose of the OSHA log which is to track injury and illness
trends so corrective action can be taken by the employer.
OSHA does not agree with this view, because government inspectors
conducting workplace safety and health inspections need these records
to carry out the purposes of the Act, i.e., to identify hazards that
may harm the employees working there. The Part 1904 records provide
information about how workers are injured or made ill at work and help
guide the inspector to the hazards in the workplace that are causing
injury and illness. Although these records may not cover all hazards
that exist in a particular workplace, they help the inspector to
identify hazards more completely during an inspection.
Fourth amendment issues. A number of commenters argued that the
regulatory requirement to provide records to a government inspector
violated Fourth Amendment guarantees against unreasonable searches and
the right to demand a warrant or subpoena before the government can
search a citizen's property (see, e.g., Exs. 25, 27, 15: 124, 139, 154,
174, 193, 215, 258, 305, 315, 318, 346, 375, 390, 392 395, 397). For
example, the Workplace Safety and Health Council (Ex. 15: 313) stated:
[t]his provision would require employers to give OSHA a copy of a
Form 300 and 301. This proposal flies in the face of court decisions
holding that employers may not be penalized for declining to provide
current Form 101 upon request and that, to gain access to them, OSHA
must proceed by subpoena or inspection warrant. Secretary v. Taft
Broadcasting Co., 849 F.2d 990 (6th Cir. 1988); Brock v. Emerson
Electric Co., 834 F.2d 994 (11th Cir. 1987). These decisions are
based on an employer's constitutional rights and they are not
subject to change by OSHA regulation.
These commenters appear to be arguing that including a subpoena or
warrant enforcement mechanism in the text of the rule is necessary to
adequately protect their Fourth Amendment right to privacy. This is not
the case, however. The Fourth Amendment protects against
``unreasonable'' intrusions by the government into private places and
things. Reporting rules that do not depend on subpoena or warrant
powers are not ``unreasonable'' per se. See e.g., California Bankers
Ass'n v. Shultz, 416 U.S. 21, 67 (1974) (upholding reporting regulation
issued under the Bank Secrecy Act of 1970 that did not provide for
subpoenas or warrants where the ``information was sufficiently
described and limited in nature and sufficiently related to a tenable
Congressional determination'' that the information would have a high
degree of usefulness in criminal, tax, or regulatory investigations or
proceedings).
In any event, the text of the rule is silent as to the enforcement
mechanism OSHA will use in what OSHA hopes will be the rare case in
which an employer does not provide a copy of the records on request.
OSHA may proceed by applying for a warrant, or by administrative
subpoena, or by citation where doing so is consistent with the Fourth
Amendment. OSHA notes that employers have a Fourth Amendment right to
require a warrant before an OSHA representative may physically enter a
business establishment for an inspection.
The totality of circumstances surrounding a warrantless or
``subpoena-less'' administrative investigation or investigation program
determines its reasonableness. For example, in McLaughlin v. A.B.
Chance, 842 F.2d at 727 (4th Cir. 1988), the Fourth Circuit upheld a
records access citation against an employer who refused an OSHA
inspector access to its OSHA Logs and forms on the ground that it had a
right to insist on a warrant or subpoena; the Court held that the
inspector had such a right because a summary of the information was
posted annually on the employee bulletin board and the inspector was
lawfully on the premises to investigate a safety complaint. In New York
v. Burger, 482 U.S. 691, 702-703 (1987), the Supreme Court noted that
agencies may gather information without a warrant, subpoena, or consent
if the information would serve a substantial governmental interest, a
warrantless (or subpoena-less) inspection is necessary to further the
regulatory scheme, and the agency acts pursuant to an inspection
program that is limited in time, place, and scope. The Burger court
upheld a warrantless inspection of records during an administrative
inspection of business premises. See also Kings Island (noting that
under Burger a warrantless or subpoena-less inspection of records might
be reasonable, but concluding that the facts of the case did not
satisfy Burger analysis); Emerson Electric (noting that under
California Bankers an agency may gain access to information without a
subpoena or warrant but concluding that the facts of that case were not
comparable to those reviewed in California Bankers).
Given that some warrantless and subpoena-less searches during an
OSHA inspection may be reasonable while others may not, depending on
the circumstances of the individual inspection, OSHA has decided not to
include a subpoena or warrant enforcement mechanism in the text of the
rule. However, OSHA will continue to enforce the rule within the
parameters of applicable court decisions.
Privacy of medical records. A number of commenters questioned the
right of the government to access information in the records because of
privacy concerns about medical records (see, e.g., Exs. 27, 15: 13, 22,
39, 60, 82, 117, 119, 142, 183, 359, 378, 392, 399.) The National
Association of Manufacturers (NAM) (Ex. 15: 142) stated that ``[t]he
privacy interference as proposed that opens up medical records to most
anyone is inconceivable, and should be eliminated.'' The National
Oilseed Processors Association (Ex. 15: 119) recommended:
[t]he issue of privacy is an important one that should be handled
carefully and with sensitivity to individual rights. We believe that
the release of medical records of a specific employee should only be
done after the employee whose records may be released has provided
written permission to the employer to do so.
This section of the final rule does not give unfettered access to
the records by the public, but simply allows a government inspector to
use the records during the course of a safety and health inspection. As
discussed above in the section covering access to the records for
employees, former employees, and employee representatives (Section
1904.35), OSHA does not consider the Forms 300 and 301 to be medical
records, for the following reasons. First, they do not have to be
completed by a physician or other licensed health care professional.
Second, they do not contain the detailed diagnostic and treatment
information usually found in medical records. Finally, the injuries and
illnesses found in the records are usually widely known among other
employees at the workplace where the injured or ill worker works; in
fact, these co-workers may even have witnessed the accident that gave
rise to the injury or illness.
OSHA does not agree that its inspectors should be required to
obtain permission from all injured or ill employees before accessing
the full records. Gaining this permission would make it essentially
impossible to obtain
[[Page 6068]]
full access to the records, which is needed to perform a meaningful
workplace investigation. For example, an inspector would not be able to
obtain the names of employees who were no longer working for the
company to perform follow-up interviews about the specifics of their
injuries and illnesses. The names of the injured or ill workers are
needed to allow the government inspector to interview the injured and
ill workers and determine the hazardous circumstances that led to their
injury or illness. The government inspector may also need the
employee's names to access personnel and medical records if needed
(medical records can only be accessed after the inspector obtains a
medical access order). Additionally, refusing the inspector access to
the names of the injured and ill workers would effectively prohibit any
audit of the Part 1904 records by the government, a practice necessary
to verify the accuracy of employer recordkeeping in general and to
identify problems that employers may be having in keeping records under
OSHA's recordkeeping rules. Adopting the inefficient access method
suggested by these commenters would also place a substantial
administrative burden on the employer, the employees, and the
government. Further, since OSHA inspectors do not allow others to see
the medical records they have accessed, the privacy of employees is not
compromised by CSHO access to the records.
Time for response to requests for records. Paragraphs 1904.40(a)
and (b) of the final rule require records to be made available to a
government inspector within 4 business hours of an oral request for the
records, using the business hours of the establishment at which the
records are located.
A number of commenters opposed the proposed 4-hour records
production requirement as being unreasonable and burdensome (see, e.g.,
Exs. 15: 89, 182, 185, 204, 213, 226, 260, 262, 265, 277, 294, 297,
317, 324, 348, 392, 401, 409, 425). Several of these commenters
recommended longer intervals, ranging from 8 hours (see, e.g., Exs. 15:
9, 133, 204, 271, 294, 343), the ``next business day,'' or 24 hours
(see, e.g., Exs. 15: 200, 225, 277, 394, 425), 72 hours (see, e.g.,
Exs. 15: 65, 154), 6 days (Ex. 15: 226), and 21 days (Ex. 15: 317). On
the other hand, some commenters were concerned that access not be
unduly delayed (see, e.g., Exs. 15: 350, 369, 418, 429). Two commenters
(Exs. 15: 418, 429) recommended that the 4-hour requirement be reduced
to two hours, except when the request would extend the reply period
beyond regular business hours, when 4 hours would be acceptable.
OSHA has concluded that 4 hours is a reasonable and workable length
of time for employers to respond to governmental requests for records.
The 4-hour time period for providing records from a centralized source
strikes a balance between the practical limitations inherent in record
maintenance and the government official's need to obtain these records
and use the information to conduct a workplace inspection.
Some commenters noted that temporary computer or fax failures could
interfere with an employer's ability to comply with the 4-hour
requirement (see, e.g., Exs. 15: 203, 254, 423). One commenter felt
that additional time should be given to employers if equipment failure
prevented the retrieval of the records within four hours (Ex. 15: 423).
The American Society of Safety Engineers (ASSE) questioned whether four
hours is a reasonable time frame for employers who use independent
third parties to maintain their records (Ex. 15: 182).
Several commenters raised concerns that other difficulties might
make it difficult to produce the records in the allotted time. Some
noted that the 4-hour time limit might not be adequate for large
facilities with voluminous records (see, e.g., Exs. 15: 181, 297, 425).
For example, the American Automobile Manufacturers Association (AAMA)
(Ex. 15: 409) stated:
[m]any of our members' locations have only one medical person
working, and to disrupt the normal medical care of injured or ill
employees to produce records within a four hour period is not in the
best interests of the health and safety of all concerned. Many
additional factors must be taken into account in terms of the
production of records such as locating the files, copying the files,
having appropriate staffing to do the copying, and if the records
are on a computer, the computer must not be on down time.
OSHA believes that it is essential for employers to have systems
and procedures that can produce the records within the 4-hour time.
However, the Agency realizes that there may be unusual or unique
circumstances where the employer cannot comply. For example, if the
records are kept by a health care professional and that person is
providing emergency care to an injured worker, the employer may need to
delay production of the records. In such a situation, the OSHA
inspector may allow the employer additional time.
If a government representative requests records of an
establishment, but those records are kept at another location, the 4-
hour period can be measured in accordance with the normal business
hours at the location where the records are being kept. Some commenters
observed that personnel at the centralized location might not be
available to respond to requests if the 4-hour period extended outside
the regular business hours of that location (see, e.g., Exs. 15: 105,
111, 159, 170, 225, 239, 272, 294, 303, 332, 336, 343, 356, 359, 389,
393, 430). This problem could arise under two different scenarios.
First, if the centralized location were in a different time zone than
the site whose records are requested, the business hours of the
respective locations may differ by three or even more hours. Second,
the business hours of a manufacturing plant or a construction site
might differ from the business hours of the company's central offices,
even if the operations are in the same time zone. Under the final rule,
the employer has 4 regular business hours at the location at which the
records are kept in which to comply with the request of a government
representative.
OSHA has designed the final rule to give each employer considerable
flexibility in maintaining records. It permits an employer to
centralize its records, to use computer and facsimile technologies, and
to hire a third party to keep its records. However, an employer who
chooses these options must also ensure that they are sufficiently
reliable to comply with this rule. In other words, the flexibility
provided to employers for recordkeeping must not impede the Agency's
ability to obtain and use the records.
Provide copies. Several commenters objected to the proposed
requirement that employers provide copies of the records to government
personnel without charging the government to do so (see, e.g., Exs. 15:
69, 86, 100, 179, 347, 389, 397, 409). Most of these commenters cited
the paperwork burden on employers as the primary reason for objecting.
Several suggested that the employer be allowed to charge for copies, or
that the government representative make their own copies (see, e.g.,
Exs. 15: 179, 347, 389, 409). This view was expressed in a comment from
the Ford Motor Company (Ex. 15: 347):
[a]n undue burden may be placed on the establishment should a
compliance officer ask for an inordinate amount of records or
records which will not be utilized. Authorized government
representatives should make their own copies and therefore will be
diligent in asking only for those materials they will be utilizing.
[[Page 6069]]
OSHA's experience has been that the vast majority of employers
willingly provide copies to government representatives during safety
and health inspections. Making copies is a routine office function in
almost every modern workplace. With the widespread availability of
copying technology, most workplaces have copy machines on-site or
readily available. The cost of providing copies is minimal, usually
less than five cents per copy. In addition, the government
representative needs to obtain copes of records promptly, so that he or
she can analyze the data and identify workplace hazards. Therefore, in
this final rule, OSHA requires the employer to provide copies of the
records requested to authorized government representatives.
Other Section 1904.40 issues. Commenters raised additional issues
about providing occupational illness and injury information to OSHA
during an inspection. The American Ambulance Association (Ex. 15: 226)
recommended that OSHA ``[p]lace greater emphasis on the fact that
employers do not have to provide Forms 300 and 301 unless OSHA
specifically asks for their submission.'' OSHA believes that the final
rule is clear on this point, because it states that the employer must
provide the records only when asked by an authorized government
representative to do so.
Several commenters stated that all requests for occupational safety
and health information should be made in writing (see, e.g., Exs. 15:
69, 317, 397). OSHA believes that it is neither appropriate nor
necessary to require a government representative to request the
information in writing. Government officials who are conducting
workplace inspections may ask for any number of materials or ask
verbally for information about various matters during the course of an
inspection. Putting these requests in writing would impede workplace
inspections and delay efforts to address workplace hazards.
Section 1904.41 Annual OSHA Injury and Illness Survey of Ten or More
Employers
Section 1904.41 of this final rule replaces section 1904.17,
``Annual OSHA Injury and Illness Survey of Ten or More Employers,'' of
the former rule issued on February 11, 1997. The final rule does not
change the contents or policies of the corresponding section of the
former rule in any way. Instead, the final rule simply rephrases the
language of the former rule in the plain language question-and-answer
format used in the rest of this rule. The following table shows the
text of Section 1904.17 of the former rule, followed by the text of
Section 1904.41 of this final rule.
------------------------------------------------------------------------
Former sections 1904.17 New section 1904.41
------------------------------------------------------------------------
``Annual OSHA Injury and Illness Survey ``Annual OSHA Injury and
of Ten or More Employers'' Illness Survey of Ten or more
Employers''
1904.17(a) Each employer shall, upon 1904.41(a) Basic Requirement.
receipt of OSHA's Annual Survey Form, If you receive OSHA's annual
report to OSHA or OSHA's designee the survey from, you must fill it
number of workers it employed and out and send it to OSHA or
number of hours worked by its OSHA's designee, as stated on
employees for periods designated in the survey form. You must
the Survey Form and such information report the following
as OSHA may request from records information for the year
required to be created and maintained described on the form: (1) the
pursuant to 29 CFR Part 1904. number of workers you
employed; (2) the number of
hours worked by your
employees; and (3) the
requested information from the
records that you keep under
Part 1904.
No comparable provision................ 1904.41(b)(1) Does every
employer have to send data to
OSHA?
No. Each year, OSHA sends
injury and illness survey
forms to employers in certain
industries. In any year, some
employers will receive an OSHA
survey form and others will
not. You do not have to send
injury and illness data to
OSHA unless you receive a
survey form.
1904.17(b) Survey reports shall be 1904.41(b)(2) How quickly do I
transmitted to OSHA by mail or other need to respond to an OSHA
remote transmission authorized by the survey form?
Survey Form within the time period You must send the survey
specified in the Survey Form, or 30 reports to OSHA, or OSHA's
calendar days, whichever is longer.. designee, by mail or other
means described in the survey
form, within 30 calendar days,
or by the date stated in the
survey form, whichever is
later.
1904.17(c) Employers exempted from 1904.41(b)(3) Do I have to
keeping injury and illness records respond to an OSHA survey form
under Secs. 1904.15 and 1904.16 shall if I am normally exempt from
maintain injury and illness records keeping OSHA injury and
required by Secs. 1904.2 and 1904.4, illness records?
and make Survey Reports pursuant to Yes. Even if you are exempt
this Section, upon being notified in from keeping injury and
writing by OSHA, in advance of the illness records under Sec.
year for which injury and illness 1904.1 to Sec. 1904.3, OSHA
records will be required, that the may inform you in writing that
employer has been selected to it will be collecting injury
participate in an information and illness information from
collection.''. you in the following year. If
you receive such a survey
form, you must keep the injury
and illness records required
by Sec. 1904.5 to Sec.
1904.15 and make survey
reports for the year covered
by the survey.
1904.17(d) Nothing in any State plan 1904.41(b)(4) Do I have to
approved under Section 18 of the Act answer the OSHA survey form if
shall affect the duties of employers I am located in a State-Plan
to comply with this section.. State?
Yes. All employers who receive
survey forms must respond to
the survey, even those in
State-Plan States
1904.17(e) Nothing in this section 1904.41(b)(5) Does this section
shall affect OSHA's exercise of its affect OSHA's authority to
statutory authorities to investigate inspect my workplace?
conditions related to occupational No. Nothing in this section
safety and health. affects OSHA's statutory
authority to investigate
conditions related to
occupational safety and
health.
------------------------------------------------------------------------
Thus, section 1904.41 of the final rule merely restates, in a plain
language question-and-answer format, the requirements of former rule
section 1904.17, with one minor change. The final rule adds paragraph
1904.41(b)(1), which contains no requirements or prohibitions but
simply informs the employer that there is no need to send in the Part
1904 injury and illness data until the government asks for it.
Section 1904.42 Requests From the Bureau of Labor Statistics for Data
Section 1904.42 of the final rule derives from the subpart of the
former rule titled ``Statistical Reporting of Occupational Injuries and
Illnesses.'' The former rule described the Bureau of Labor Statistics
annual survey of occupational injuries and illnesses, discussed the
duty of employers to answer the survey, and explained the effect of the
BLS survey on the States operating their own State plans.
[[Page 6070]]
Both OSHA and the BLS collect occupational injury and illness
information, each for separate purposes. The BLS collects data from a
statistical sample of employers in all industries and across all size
classes, using the data to compile the occupational injury and illness
statistics for the Nation. The Bureau gives each respondent a pledge of
confidentiality (as it does on all BLS surveys), and the establishment-
specific injury and illness data are not shared with the public, other
government agencies, or OSHA. The BLS's sole purpose is to create
statistical data.
OSHA collects data from employers from specific size and industry
classes, but collects from each and every employer within those
parameters. The establishment-specific data collected by OSHA are used
to administer OSHA's various programs and to measure the performance of
those programs at individual workplaces.
OSHA proposed to replace sections 1904.20, .21, and .22 of the
former rule with a single reporting provision that would combine the
requirements for BLS and OSHA survey reports into a single section (61
FR 4039). However, since the time of the proposal, OSHA has determined
that the BLS and OSHA information collections warrant separate coverage
because they occur at different times and collect data for different
purposes. When OSHA published final Section 1904.17, Annual OSHA Injury
and Illness Surveys (62 FR 6434, Feb. 11, 1997), the Agency made clear
that its surveys are separate from any collections of injury and
illness data by the BLS. Accordingly, the final rule includes two
separate sections: section 1904.41, which is devoted entirely to the
collection of employer-generated injury and illness data by OSHA, and
section 1904.42, which is devoted to the collection of such data by the
Bureau of Labor Statistics.
Many commenters discussed the need for accurate government
statistics about occupational death, injury and illness; however, very
few of the comments specifically addressed the proposed provisions
relating to employer participation in the BLS survey. The comments OSHA
did receive on this point addressed the burden imposed by requests for
employer records and the potential duplication between the data
collections of OSHA and the BLS (see, e.g., Exs. 15: 9, 163, 184, 390,
402). The comments of the U.S. West Company (Ex. 15: 184) are typical:
[U]S WEST acknowledges the need for the Secretary of Labor to
periodically request reports, including recordkeeping data, from
employers. However, US WEST does ask that OSHA carefully consider
the need for such reports and work to streamline the process and
reduce redundancies. Specifically, US WEST requests that OSHA move
to implement systems that will allow employers to electronically
provide data, such as the data requested in the BLS Survey of
Occupational Injuries and Illnesses. Such a method will be more
effective, in terms of receiving consistently formatted data, and
will be more cost efficient for both employers and the Department of
Labor.
In addition, the DOL should work to avoid duplicate internal
efforts that are costly and time-consuming for the government and
employers. By way of example, US WEST has in the past received
requests from BLS to complete the Survey and from OSHA to complete
the Occupational Injury and Illness Report (Form 196B) for the same
facility. Both surveys collect similar information.
OSHA and the BLS have worked together for many years to reduce the
number of establishments that receive both surveys. These efforts have
largely been successful. However, OSHA and BLS use different databases
to select employers for their surveys. This makes it difficult to
eliminate the overlap completely. We are continuing to work on methods
to reduce further the numbers of employers who receive both BLS and
OSHA survey requests.
OSHA and BLS are also pursuing ways to allow employers to submit
occupational injury and illness data electronically. In 1998, the OSHA
survey allowed employers for the first time to submit their data
electronically, and this practice will continue in future OSHA surveys.
The BLS has not yet allowed electronic submission of these data due to
security concerns, but continues to search for appropriate methods of
electronic submission, and hopes to allow it in the near future.
In this final rule, OSHA has replaced former sections 1904.20 to
1904.22 with a new section 1904.42, which is stated in the form of a
basic requirement and four implementing questions and answers about the
BLS survey. Former section 1904.20 ``Description of statistical
program,'' is not carried forward in the final rule because it merely
described BLS's general legal authority and sampling methodology and
contained no regulatory requirements.
Section 1904.21 of the former rule, titled ``Duties of employers,''
required an employer to respond to the BLS annual survey: ``Upon
receipt of an Occupational Injuries and Illnesses Survey Form, the
employer shall promptly complete the form in accordance with the
instructions contained therein, and return it in accordance with the
aforesaid instructions.''
Paragraphs 1904.42(a), (b)(1) and (b)(2) of the final rule being
published today replace former section 1904.21. Paragraph 1904.42(a)
states the general obligation of employers to report data to the BLS or
a BLS designee. Paragraph 1904.42(b)(1) states that some employers will
receive a BLS survey form and others will not, and that the employer
should not send data unless asked to do so. Paragraph 1904.42(b)(2)
directs the employer to follow the instructions on the survey form when
completing the information and return it promptly.
Paragraph 1904.42(b)(3) of this final rule notes that the BLS is
authorized to collect data from all employers, even those who would
otherwise be exempt, under section 1904.1 to section 1904.3, from
keeping OSHA injury and illness records. This enables the BLS to
produce comprehensive injury and illness statistics for the entire
private sector. Paragraph 1904.42(b)(3) combines the requirements of
former rule paragraphs 1904.15(b) and 1904.16(b) into this paragraph of
the final rule.
In response to the question ``Am I required to respond to a BLS
survey form if I am normally exempt from keeping OSHA injury and
illness records?,'' the final rule states ``Yes. Even if you are exempt
from keeping injury and illness records under Sec. 1904.1 to
Sec. 1904.3, the BLS may inform you in writing that it will be
collecting injury and illness information from you in the coming year.
If you receive such a survey form, you must keep the injury and illness
records required by Sec. 1904.4 to Sec. 1904.12 and make survey reports
for the year covered by the survey.''
Paragraph 1904.42(b)(4) of this final rule replaces section 1904.22
of the former rule. It provides that employers in the State-plan States
are also required to fill out and submit survey forms if the BLS
requests that they do so. The final rule thus specifies that the BLS
has the authority to collect information on occupational fatalities,
injuries and illnesses from: (1) employers who are required to keep
records at all times; (2) employers who are normally exempt from
keeping records; and (3) employers under both Federal and State plan
jurisdiction. The information collected in the annual survey enables
BLS to generate consistent statistics on occupational death, injury and
illness for the entire Nation.
Subpart F. Transition From the Former Rule to the New Rule
The transition interval from the former rule to the new rule
involves several issues, including training and outreach to familiarize
employers and employees about the now forms and
[[Page 6071]]
requirements, and informing employers in newly covered industries that
they are now required to keep OSHA Part 1904 records. OSHA intends to
make a major outreach effort, including the development of an expert
software system, a forms package, and a compliance assistance guide, to
assist employers and recordkeepers with the transition to the new rule.
An additional transition issue for employers who kept records under the
former system and will also keep records under the new system is how to
handle the data collected under the former system during the transition
year. Subpart F of the final rule addresses some of these transition
issues.
Subpart F of the new rule (sections 1904.43 and 1904.44), addresses
what employers must do to keep the required OSHA records during the
first five years the new system required by this final rule is in
effect. This five-year period is called the transition period in this
subpart. The majority of the transition requirements apply only to the
first year, when the data from the previous year (collected under the
former rule) must be summarized and posted during the month of
February. For the remainder of the transition period, the employer is
simply required to retain the records created under the former rule for
five years and provide access to those records for the government, the
employer's employees, and employee representatives, as required by the
final rule at sections 1904.43 and 44.
The proposal did not spell out the procedures that the employer
would have to follow in the transition from the former recordkeeping
rule to the new rule. OSHA realizes that employers will have questions
about how they are required to handle the data collected under the
former system during this transition interval. The final rule maintains
the basic structure and recordkeeping practices of the former system,
but it employs new forms and somewhat different requirements for
recording, maintaining, posting, retaining and reporting occupational
injury and illness information. Information collection and reporting
under the final rule will continue to be done on a calendar year basis.
The effective date for the new rule is January 1, 2001. OSHA agrees
with the commenter who stated that beginning the new recordkeeping
system on ``Any other date [but January 1] would create an
insurmountable number of problems * * *'' (Ex. 27). Accordingly,
employers must begin to use the new OSHA 300 and 301 forms and to
comply with the requirements of this final rule on January 1, 2002.
Some commenters stressed the need for an orderly transition from
the former system to the new system, and pointed out that adequate lead
time is needed to understand and assimilate the changes, make
adjustments in their data management systems, and train personnel who
have recordkeeping responsibilities (see, e.g., Exs. 15: 9, 36, 119,
347, 409).
The transition also raises questions about what should be done in
the year 2002 with respect to posting, updating, and retaining the
records employers compiled in 2001 and previous years. In the
transition from the former rule to the present rule, OSHA intends
employers to make a clean break with the former system. The new rule
will replace the old rule on the effective date of the new rule, and
OSHA will discontinue the use of all previous forms, interpretations
and guidance on that date (see, e.g., Exs. 21, 22, 15: 184, 423).
Employers will be required to prepare a summary of the OSHA Form 200
for the year 2001 and to certify and post it in the same manner and for
the same time (one month) as they have in the past. The following time
table shows the sequence of events and postings that will occur:
------------------------------------------------------------------------
Date Activity
------------------------------------------------------------------------
2001........................................ Employers keep injury and
illness information on
the OSHA 200 form
January 1, 2002............................. Employers begin keeping
data on the OSHA 300 form
February 1, 2002............................ Employers post the 2001
data on the OSHA 200 Form
March 1, 2002............................... Employers may remove the
2001 posting
February 1, 2003............................ Employers post the 2002
data on the OSHA 300A
form
May 1, 2003................................. Employers may remove the
2002 posting
------------------------------------------------------------------------
The final rule's new requirements for dual certification and a 3-
month posting period will not apply to the Year 2000 Log and summary.
Employers still must retain the OSHA records from 2001 and previous
years for five years from the end of the year to which they refer. The
employer must provide copies of the retained records to authorized
government representatives, and to his or her employees and employee
representatives, as required by the new rule.
However, OSHA will no longer require employers to update the OSHA
Log and summary forms for years before the year 2002. The former rule
required employers to correct errors to the data on the OSHA 200 Logs
during the five-year retention period and to add new information about
recorded cases. The former rule also required the employer to adjust
the totals on the Logs if changes were made to cases on them (Ex. 2, p.
23). OSHA believes it would be confusing and burdensome for employers
to update and adjust previous years' Logs and Summaries under the
former system at the same time as they are learning to use the new OSHA
occupational injury and illness recordkeeping system.
Subpart G. Definitions
The Definitions section of the final rule contains definitions for
five terms: ``the Act,'' ``establishment,'' ``health care
professional,'' ``injury and illness,'' and ``you.'' To reduce the need
for readers to move back and forth from the regulatory text to the
Definitions section of this preamble, all other definitions used in the
final rule are defined in the regulatory text as the term is used. OSHA
defines the five terms in this section here because they are used in
several places in the regulatory text.
The Act
The Occupational Safety and Health Act of 1970 (the ``OSH Act'') is
defined because the term is used in many places in the regulatory text.
The final rule's definition is essentially identical to the definition
in the proposal. OSHA received no comments on this definition. The
definition of ``the Act'' follows:
The Act means the Occupational Safety and Health Act of 1970 (84
Stat. 1590 et seq., 29 U.S. 651 et seq.), as amended. The definitions
contained in section (3) of the Act and related interpretations shall
be applicable to such terms when used in this Part 1904.
Employee
The proposed rule defined ``employee'' as that term is defined in
section 3 of the Act and added a Note describing the various types of
employees covered by this
[[Page 6072]]
recordkeeping rule (e.g., ``leased employees,'' ``seasonal
employees''). In the final rule, OSHA has decided that it is not
necessary to define ``employee'' because the term is defined in section
3 of the Act and is used in this rule in accordance with that
definition.
Employer
The proposed rule included a definition of ``employer'' that was
taken from section 3 of the Act's definition of that term. Because the
final rule uses the term ``employer'' just as it is defined in the Act,
no separate definition is included in the final rule.
Establishment
The final rule defines an establishment as a single physical
location where business is conducted or where services or industrial
operations are performed. For activities where employees do not work at
a single physical location, such as construction; transportation;
communications, electric, gas and sanitary services; and similar
operations, the establishment is represented by main or branch offices,
terminals, stations, etc. that either supervise such activities or are
the base from which personnel carry out these activities.
The final rule also addresses whether one business location can
include two or more establishments. Normally, one business location has
only one establishment. However, under limited conditions, the employer
may consider two or more separate businesses that share a single
location to be separate establishments for recordkeeping purposes. An
employer may divide one location into two or more establishments only
when: each of the proposed establishments represents a distinctly
separate business; each business is engaged in a different economic
activity; no one industry description in the Standard Industrial
Classification Manual (1987) applies to the joint activities of the
proposed establishments; and separate reports are routinely prepared
for each establishment on the number of employees, their wages and
salaries, sales or receipts, and other business information. For
example, if an employer operates a construction company at the same
location as a lumber yard, the employer may consider each business to
be a separate establishment.
The final rule also deals with the opposite situation, and explains
when an establishment includes more than one physical location. An
employer may combine two or more physical locations into a single
establishment only when the employer operates the locations as a single
business operation under common management; the locations are all
located in close proximity to each other; and the employer keeps one
set of business records for the locations, such as records on the
number of employees, their wages and salaries, sales or receipts, and
other kinds of business information. For example, one manufacturing
establishment might include the main plant, a warehouse serving the
plant a block away, and an administrative services building across the
street. The final rule also makes it clear that when an employee
telecommutes from home, the employee's home is not a business
establishment for recordkeeping purposes, and a separate OSHA 300 Log
is not required.
The definition of ``establishment'' is important in OSHA's
recordkeeping system for many reasons. First, the establishment is the
basic unit for which records are maintained and summarized. The
employer must keep a separate injury and illness Log (the OSHA Form
300), and prepare a single summary (Form 300A), for each establishment.
Establishment-specific records are a key component of the recordkeeping
system because each separate record represents the injury and illness
experience of a given location, and therefore reflects the particular
circumstances and hazards that led to the injuries and illnesses at
that location. The establishment-specific summary, which totals the
establishment's injury and illness experience for the preceding year,
is posted for employees at that establishment and may also be collected
by the government for statistical or administrative purposes.
Second, the definition of establishment is important because
injuries and illnesses are presumed to be work-related if they result
from events or exposures occurring in the work environment, which
includes the employer's establishment. The presumption that injuries
and illnesses occurring in the work environment are by definition work-
related may be rebutted under certain circumstances, which are listed
in the final rule and discussed in the section of this preamble devoted
to section 1904.5, Determination of work-relatedness. Third, the
establishment is the unit that determines whether the partial exemption
from recordkeeping requirements permitted by the final rule for
establishments of certain sizes or in certain industry sectors applies
(see Subpart B of the final rule). Under the final rule's partial
exemption, establishments classified in certain Standard Industrial
Classification codes (SIC codes) are not required to keep injury and
illness records except when asked by the government to do so. Because a
given employer may operate establishments that are classified in
different SIC codes, some employers may be required to keep OSHA injury
and illness records for some establishments but not for others, e.g. if
one or more of the employer's establishments falls under the final
rule's partial exemption but others do not.
Fourth, the definition of establishment is used to determine which
records an employee, former employee, or authorized employee
representative may access. According to the final rule, employees may
ask for, and must be given, injury and illness records for the
establishment they currently work in, or one they have worked in,
during their employment.
The proposed rule defined an establishment as:
(1) A single physical location that is in operation for 60
calendar days or longer where business is conducted or where
services or industrial operations are performed. (For example: A
factory, mill, grocery store, construction site, hotel, farm, ranch,
hospital, central administrative office, or warehouse.) The
establishment includes the primary work facility and other areas
such as recreational and storage facilities, restrooms, hallways,
etc. The establishment does not include company parking lots.
(2) When distinct and separate economic activities are performed
at a single physical location, each activity may represent a
separate establishment. For example, contract construction
activities conducted at the same physical location as a lumber yard
may be treated as separate establishments. According to the Standard
Industrial Classification (SIC) Manual, Executive Office of the
President, Office of Management and Budget, (1987) each distinct and
separate activity should be considered an establishment when no one
industry description from the SIC manual includes such combined
activities, and the employment in each such economic activity is
significant, and separate reports can be prepared on the number of
employees, their wages and salaries, sales or receipts, or other
types of establishment information.
The final rule modifies this definition in several ways: it deletes
the ``60 days in operation'' threshold, adds language to the definition
to address the concerns of employers who operate geographically
dispersed establishments, describes in greater detail what OSHA means
by separate establishments at one location, and defines which locations
must be considered part of the establishment, and which employee
activities must be considered work-related, for
[[Page 6073]]
recordkeeping purposes. Each of these topics is discussed below.
Subpart G of the final rule defines ``establishment'' as ``a single
physical location where business is conducted or where services or
industrial operations are performed. For activities such as
construction; transportation; communications, electric and gas utility,
and sanitary services; and similar operations, the establishment is
represented for recordkeeping purposes by main or branch offices,
terminals, stations, etc. that either supervise such activities or are
the base from which personnel carry out these activities.'' This part
of the definition of ``establishment'' provides flexibility for
employers whose employees (such as repairmen, meter readers, and
construction superintendents) do not work at the same workplace but
instead move between many different workplaces, often in the course of
a single day.
How the definition of ``establishment'' must be used by employers
for recordkeeping purposes is set forth in the answers to the questions
posed in this paragraph of Subpart G:
(1) Can one business location include two or more establishments?
(2) Can an establishment include more than one physical location?
(3) If an employee telecommutes from home, is his or her home
considered a separate establishment?
The employer may consider two or more economic activities at a
single location to be separate establishments (and thus keep separate
OSHA Form 300s and Form 301s for each activity) only when: (1) Each
such economic activity represents a separate business, (2) no one
industry description in the Standard Industrial Classification Manual
(1987) applies to the activities carried out at the separate locations;
and (3) separate reports are routinely prepared on the number of
employees, their wages and salaries, sales or receipts, and other
business information. This part of the definition of ``establishment''
allows for separate establishments when an employer uses a common
facility to house two or more separate businesses, but does not allow
different departments or divisions of a single business to be
considered separate establishments. However, even if the establishment
meets the three criteria above, the employer may, if it chooses,
consider the physical location to be one establishment.
The definition also permits an employer to combine two or more
physical locations into a single establishment for recordkeeping
purposes (and thus to keep only one Form 300 and Form 301 for all of
the locations) only when (1) the locations are all geographically close
to each other, (2) the employer operates the locations as a single
business operation under common management, and (3) the employer keeps
one set of business records for the locations, such as records on the
number of employees, their wages and salaries, sales or receipts, and
other business information. However, even for locations meeting these
three criteria, the employer may, if it chooses, consider the separate
physical locations to be separate establishments. This part of the
definition allows an employer to consider a single business operation
to be a single establishment even when some of his or her business
operations are carried out on separate properties, but does not allow
for separate businesses to be joined together. For example, an employer
operating a manufacturing business would not be allowed to consider a
nearby storage facility to be a separate establishment, while an
employer who operates two separate retail outlets would be required to
consider each to be a separate establishment.
OSHA received many comments on the proposed definition of
``establishment.'' These are organized by topic and discussed below.
How long must an establishment exist to have a separate OSHA Log.
The proposed rule would have required an establishment to be in
operation for 60 days to be considered an ``establishment'' for
recordkeeping purposes. Under the proposed definition, employers with
establishments in operation for a lesser period would not have been
required to keep a log for that operation. The proposed 60-day
threshold would have changed the definition of ``establishment'' used
in OSHA's former recordkeeping rule, because that rule included a one-
year-in-operation threshold for defining establishments required to
keep a separate OSHA log (Ex. 2, p. 21). The effect of the proposed
change in the threshold would have been to increase the number of
short-duration operations required to maintain separate injury and
illnesses records. In particular, the proposed change would have
affected construction employers and utility companies.
The majority of the comments OSHA received on this issue opposed
the decrease in the duration of the threshold from one year to 60
calendar days. A few commenters, however, supported the proposed 60-day
rule (see, e.g., Exs. 15: 9, 133, 310, 369, 425), and some urged OSHA
to adopt an even shorter time-in-operation threshold (see, e.g., Exs.
15: 369, 418, 429). Typical of the comments favoring an even shorter
period was one from the International Brotherhood of Teamsters (IBT):
[t]he International Brotherhood of Teamsters is encouraged by OSHA's
modification to the definition of an establishment, especially
reducing the requirement for an operation in a particular location
from one year to sixty days. The IBT would strongly support reducing
the requirement to thirty days to cover many low level housing
construction sites, and transient operations, similar to mobile
amusement parks (Ex. 15: 369).
The AFL-CIO agreed: ``* * * [t]he 60-day time period is still too
long. We believe that to truly capture a majority of these transient
worksites, a 30-day time period would be more realistic. A 30-day time
period as the trigger would capture construction activities such as
trenching, roofing, and painting projects which will continue to be
missed if a 60-day time period is used'' (Ex. 15: 418).
Those commenters objecting to the proposed 60-day threshold usually
did so on grounds that requiring temporary facilities to maintain
records would be burdensome and costly and would not increase the
utility of the records (see, e.g., Exs. 21, 15: 21, 43, 78, 116, 122,
123, 145, 170, 199, 213, 225, 254, 272, 288, 303, 304, 305, 308, 338,
346, 349, 350, 356, 358, 359, 363, 364, 375, 389, 392, 404, 412, 413,
423, 424, 433, 437, 443, 475). For example, the Associated Builders and
Contractors, Inc. (ABC) remarked:
ABC agrees with OSHA's sentiment of making injury and illness
records useful, but disagrees that sites in existence for as little
as 60 days need separate injury and illness records. The
redefinition of ``establishment'' will cause enormous problems for
subcontractors in a variety of construction industries. Even
employers with small workforces could be on the site of several
projects at any one time, and in the course of the year could have
sent crews to hundreds of sites. Though they may be on such sites
for only brief periods of time, they will be required under this
proposal to create separate logs for each site, increasing greatly
their paperwork requirements without increasing the amount of
information available to their employees. Projects which last less
than 90 days do not need separate logs. Requiring separate logs for
short-term projects only increases inefficiency and costs, while
doing nothing for safety (Ex. 15: 412).
Many of these commenters argued that a 60-day threshold would be
especially burdensome if it captured small work sites where posting of
the annual summary or mailing the summary to employees would make
little sense because so few cases would
[[Page 6074]]
be captured on each Log. The majority of these commenters suggested
that OSHA retain the former one-year duration threshold in the
definition of establishment (see, e.g., Exs. 15: 78, 123, 225, 254,
305, 356, 389, 404).
Other commenters expressed concern that the proposed 60-day
threshold would create an unreasonable burden on employers in service
industries like telecommunications and other utilities, whose employees
typically report to a fixed location but perform tasks at transient
locations that remain in existence for more than 60 days and would thus
be classified as new ``establishments'' for OSHA recordkeeping purposes
(see, e.g., Exs. 15: 65, 170, 199, 213, 218, 332, 336, 409, 424).
OSHA has reviewed all of the comments on this issue and has
responded by deleting any reference to a time-in-operation threshold in
the definition of establishment but specifying a one-year threshold in
section 1904.30 of the final rule. In response to comments, OSHA has
thus continued the former one-year threshold rather than adopting the
60-day threshold proposed. Under the final rule, employers will be
required to maintain establishment-specific records for any workplace
that is, or is expected to be, in operation for one year or longer.
Employers may group injuries and illnesses occurring to workers who are
employed at shorter term establishments onto one or more consolidated
logs. These logs may cover the entire company; geographic regions such
as a county, state or multi-state area; or individual divisions of the
company. For example, a construction company with multi-state
operations might have separate logs for each state to show the injuries
and illnesses of short-term projects, as well as separate logs for each
construction project expected to last for more than one year.
OSHA finds, based on the record evidence, that the one-year
threshold will create useful records for stable establishments without
imposing an unnecessary burden on the many establishments that remain
in existence for only a few months. OSHA concludes that the one-year
threshold and permitting employers to keep one Log for geographically
dispersed or short-term facilities will also provide more useful injury
and illness records for workers employed in transient establishments.
This will be the case because the records will capture more cases,
which enhances the informational value of the data and permits analysis
of trends.
Geographically Dispersed Workplaces. A number of commenters raised
issues of particular importance to the construction and utility
industries (see, e.g., Exs. 15: 43, 116, 122, 123, 145, 170, 199, 213,
225, 272, 288, 303, 305, 350, 359, 364, 392, 412, 433, 443). In
addition to objections about the 60-days-in-operation threshold in the
definition of establishment, these commenters raised concerns about the
difficulty of keeping records for a mobile and dispersed workforce.
Representative of these comments is the statement by Con Edison (Ex.
15: 213):
Con Edison believes that OSHA's proposal to tie its redefinition
of a permanent establishment to a 60-day time frame, as opposed to
the present one-year limit, would be costly, overly burdensome and
in some cases unworkable. On many occasions work must be performed
on city streets or in out of the way areas during the erection of
overhead transmission and distribution lines. These projects may
carry on for periods greater than the 60-day period specified above
for designation as an establishment. No permanent structures are
erected at these sites and to require maintenance of records there
is impractical. Con Edison believes that the definition of
establishment as set forth in the 1987 Standard Industrial
Classification Manual (see below) should apply.
``For activities such as * * * electric * * * and similar
physically dispersed operations, establishments are represented by
those relatively permanent main or branch offices, terminals,
stations, etc. that are (2) the base from which personnel operate to
carry out these activities. Hence, the individual sites, projects,
fields, networks, lines, or system of such dispersed activities are
not ordinarily considered to be establishments.'' (SIC Manual, 1987,
p. 265).
OSHA agrees that the recordkeeping system must recognize the needs
of operations of this type and has adopted language in the final rule
to provide some flexibility for employers in the construction,
transportation, communications, electric and gas utility, and sanitary
services industries, as well as other employers with geographically
dispersed operations. The final rule specifies, in Subpart G, that
employers may consider main or branch offices, terminals, stations,
etc. that are either (1) responsible for supervising such activities,
or (2) the base from which personnel operate to carry out these
activities, as individual establishments for recordkeeping purposes.
This addition to the final rule's definition of establishment allows an
employer to keep records for geographically dispersed operations using
the existing management structure of the company as the recording unit.
Use of this option will also mean that each Log will capture more
cases, which will, as discussed above, improve the chances of
discovering patterns of occupational injury and illness that can be
used to make safety and health improvements. At the same time, by
requiring records to be kept for any individual construction project
that is expected to last for one year or longer, the final rule ensures
that useful records are generated for more permanent facilities.
More than one establishment at a single location. OSHA's former
rule recognized, for recordkeeping purposes, that more than one
establishment can exist at a single location, although most workplaces
consist of a single establishment at a single location. The final rule
also recognizes that, in some narrowly defined situations, a business
may have side-by-side operations at a single location that are operated
as separate businesses because they are engaged in different lines of
business. In these situations, the Standard Industrial Classification
Manual (OMB 1987) allows a single business location to be classified as
two separate establishments, each with its own SIC code. Like all
government agencies, OSHA follows the OMB classification method and
makes allowances for such circumstances.
The proposal stated that distinct, separate economic activities
performed at a single physical location may each be classified, for
recordkeeping purposes, as a separate establishment. The proposed
definition stated that each distinct and separate economic activity may
be considered an establishment when (1) no one industry description
from the Standard Industrial Classification (SIC) manual includes such
combined activities, (2) the employment in each economic activity is
significant, and (3) separate reports can be prepared on the number of
employees, their wages and salaries, sales or receipts, or other types
of establishment information. The final rule is essentially unchanged
from the proposal on this point, but the language has been modified to
make it clear that the employer may employ this option only in the
enumerated circumstances.
Several commenters were in favor of OSHA's proposed definition of
separate establishments as places engaged in separate economic
activities (see, e.g., Exs. 15: 185, 297, 375) and agreed that when
distinct and separate economic activities are performed at a single
physical location, each activity should be considered a separate
establishment.
Others, however, disagreed with the proposed definition of multiple
establishments at a single location (see, e.g., Exs. 15: 194, 305, 322,
346, 347, 348, 389, 409, 424, 431). The comments
[[Page 6075]]
of the Ford Motor Company (Ex. 15: 347) and the American Automobile
Manufacturing Association (AAMA) (Ex. 15: 409) are representative:
[a]ll economic activities performed at a single location should be
allowed to be placed on a single log. Many of these locations have
only one medical department, payroll, or management. At many of
these locations, separate reports cannot be prepared on the number
of employees per establishment, and at times many of the employees
will work at separate sites within the same single physical
location. To break down the economic activities to record injuries
and illness on different logs is confusing, difficult, and overly
burdensome.
United Parcel Service (UPS) (Ex. 15: 424) added:
[t]he proposal should be amended to make clear that treatment of a
different activity as a separate establishment is optional, not
mandatory--the proposal currently results in unnecessary ambiguity
by saying first that separate activities ``may'' be separate
establishments, and then describing situations in which they
``should be'' considered an establishment. A requirement that such
vaguely defined ``economic activities'' be treated as separate
``establishments'' would be mistaken: employers would be left to
guess what is an ``economic activity'' and when it is ``separate''
from another. Moreover, such mandatory separate recordkeeping would
unnecessarily burden employers with determining when separate
records are required, and with maintaining such separate records.
These commenters understood the proposed language as requiring
employers to keep separate logs if separate economic activities were
being conducted at a single establishment; what OSHA intended, and the
final rule makes clear in Subpart G, is that an employer whose
activities meet the final rule's definition may keep separate logs if
he or she chooses to do so. Thus the final rule includes a provision
that allows an employer to define a single business location as two
separate establishments only under specific, narrow conditions. The
final rule allows the employer to keep separate records only when the
location is shared by completely separate business operations involved
in different business activities (Standard Industrial Classifications)
for which separate business records are available. By providing
specific, narrow criteria, the final rule reduces ambiguity and
confusion about what is required and sets out the conditions that must
be met in order for employers to deviate from the one place-one
establishment concept.
OSHA expects that the overwhelming majority of workplaces will
continue to be classified as one establishment for recordkeeping
purposes, and will keep just one Log. However, allowing some
flexibility for the rare cases that meet the specified criteria is
appropriate. The employer is responsible for determining whether a
given workplace meets the criteria; OSHA will consider an employer
meeting these criteria to be in compliance with the final rule if he or
she keeps one set of records per facility. This policy allows an
employer to keep one set of records for a given location and avoid the
additional burden or inconvenience associated with keeping separate
records.
The McDonnell Douglas Corporation (Ex. 15: 297) and the American
Textile Manufacturers Institute (ATMI) (Ex. 15: 156) commented on a
different scenario, one in which a single establishment could encompass
more than one physical location. ATMI remarked that:
[O]SHA's definition of establishment as ``a single physical
location'' is too restrictive. We believe that OSHA should be more
flexible since many industries have primary facilities with
secondary work facilities that have the same local management. For
example, in the textile industry, a plant may use a warehouse that
is not physically attached but the plant manager is responsible for
the both facilities. We suggest that the text of the rule be
modified to read: ``A single physical location or multiple physical
locations under the same management * * *.''
OSHA agrees that there are situations where a single establishment
that has a satellite operation in close physical proximity to the
primary operation may together constitute a single business operation
and thus be a single establishment. For example, a business may have a
storage facility in a nearby building that is simply an adjunct to the
business operation and is not a separate business location.
OSHA believes that there are situations where establishments in
separate physical locations constitute a single establishment. However,
under the final rule, employers will only be allowed to combine
separated physical locations into a single establishment when they
operate the combined locations as a single business operation under
common management and keep a single set of business records for the
combined locations, such as records on the number of employees, their
wages and salaries, sales or receipts, and other types of business
information.
How OSHA defines an establishment also has implications for the way
company parking lots and recreation facilities, such as company-
provided gymnasiums, ball fields, and the like are treated for
recordkeeping purposes. The 1986 Guidelines excluded these areas from
the definition of establishment and thus did not require injuries and
illnesses occurring to employees at these locations to be recorded
unless the employee was actually performing work in those areas (Ex. 2,
p. 33). The final rule includes these areas in the definition of
establishment but does not require employers to record cases occurring
to employees engaged in certain activities at these locations. For
example, injuries and illnesses occurring at the establishment while
the employee is voluntarily engaged in recreation activities or
resulting from a motor vehicle accident while the employee is commuting
to or from work would not have to be recorded (see section 1904.5). The
following paragraphs discuss OSHA's reasons for taking this approach to
the recording of injuries and illnesses occurring in these locations.
Company Parking Lots and Access Roads. Because the former rule
excluded company parking lots and access roads from the definition of
establishment, injuries and illnesses that occurred to their employees
while on such parking lots and access roads were not considered work-
related and did not have to be recorded on the Log; the proposed rule
would have continued this practice. Many commenters urged OSHA not to
consider injuries and illnesses occurring in these locations work-
related, principally because, in the view of these commenters,
employers have little control over safety and health conditions in
their parking lots (see, e.g., Exs. 15: 9, 65, 78, 95, 105, 107, 111,
119, 136, 137, 141, 154, 159, 194, 203, 204, 218, 224, 225, 260, 262,
265, 266, 277, 278, 288, 304, 337, 389, 401). The comments of the
American Gas Association (AGA) are representative: ``AGA agrees with
OSHA that parking lots and access roads should be excluded from the
definition of establishment and therefore injuries occurring there are
not work-related. Likewise, injuries and illnesses that occur during
commuting must also continue to be excluded'' (Ex. 15: 225). The Texas
Chemical Council (TCC) agreed with this position: ``[T]CC supports
continuing these exceptions. Employers have limited to no control over
variables that contribute to incidents occurring in parking lots or
during commutes to and from work'' (Ex. 15: 159).
Other commenters, however, argued that cases occurring on company
parking lots and access roads should be included in the establishment's
Log (see, e.g., Exs. 15: 61, 157, 310, 407, 432). The Laborer's Health
and Safety
[[Page 6076]]
Fund of North America pointed to the difficulty of separating cases
occurring on the parking lot from those occurring at other locations
within the establishment:
[w]e do not believe that company parking lots should be excluded
from the definition of establishment. The parking lot exclusion
seems to be based on the assumption that parking lots are separate
from loading dock and other work areas. On road construction sites,
``parking lots'' are sometimes right in the middle of the work zones
where heavy equipment is operating. Pedestrian employees being hit
by traffic and moving machinery are responsible for about 41.5% of
the yearly fatalities in road construction and maintenance work. We
believe that excluding parking lots from the definition of
establishment would open the door to under reporting of workplace
fatalities on construction sites, and discourage construction
employers from establishing safe parking areas for their employees
(Ex. 15: 310).
The National Institute for Occupational Safety and Health (NIOSH)
presented statistical data demonstrating the importance of safety and
health measures in employer-owned parking lots:
[N]IOSH does not support continuing the exemption of employer-
owned parking lots from the definition of an establishment. NIOSH
recommends that OSHA require employers to record cases meeting the
work relationship criteria that occur in employer-owned parking
areas. Employers have extensive control over the environmental
conditions in their own parking areas. Environmental conditions that
are under employer control include snow and ice accumulation in walk
areas, vicinity lighting around parked cars and entrance ways, and
security provisions in parking areas. In 1993, parking lots and
garages were identified in a study of violence in the workplace as
the location where 211 fatal injuries occurred [Toscano and Weber
1995]. Eighty-two of these deaths were homicides. Parking lots and
garages accounted for 3.4% of fatal injuries and 7.8% of homicides.
Data on the total number of injuries and illnesses occurring in
parking lots and garages is unknown. However, in 1992 the category
``parking lots'' was listed as the source of injury or illness for
10,000 cases involving days away from work [U.S. Department of Labor
l995a]. The proportion of parking lots and garages owned by the
employer where fatal and nonfatal injuries occurred is not known
(Ex. 15: 407).
OSHA agrees with NIOSH that company parking lots can be highly
hazardous and that employers have considerable control over conditions
in such lots. In addition, OSHA believes that having data on the kinds
of injuries and illnesses occurring on company parking lots and access
roads will permit employers to address the causes of these injuries and
illnesses and thus to provide their employees with better protection.
Accordingly, for recordkeeping purposes, the final rule includes
company parking lots and access roads in the definition of
establishment. However, the final rule recognizes that some injuries
and illnesses occurring on company parking lots and access roads are
not work-related and delineates those that are work-related from those
that are not work-related on the basis of the activity the employee was
performing at the time the injury or illness occurred. For example,
when an employee is injured in a motor vehicle accident that occurs
during that employee's commute to or from work, the injury is not
considered work-related. Thus, the final rule allows the employer to
exclude from the Log injuries and illnesses occurring on company
parking lots and access roads while employees are commuting to or from
work or running personal errands in their motor vehicles (see section
1904.5). However, other injuries and illnesses occurring in parking
lots and on access roads (such as accidents at loading docks, while
removing snow, falls on ice, assaults, etc.) are considered work-
related and must be recorded on the establishment's Log if they meet
the other recording criteria of the final rule (e.g., if they involve
medical treatment, lost time, etc.).
OSHA concludes that the activity-based approach taken in the final
rule will be simpler for employers to use than the former rule's
location-based approach and will result in the collection of better
data. First, the activity-based approach eliminates the need for
employers to determine where a parking lot begins and ends, i.e., what
specific areas constitute the parking lot, which can be difficult in
the case of combined, interspersed, or poorly defined parking areas.
Second, it ensures the recording of those injuries and illnesses that
are work-related but simply happen to occur in these areas. If parking
lots and access roads are totally excluded from the definition of
establishment, employers would not record any injury or illness
occurring in such locations. For example, employers could fail to
record an injury occurring to an employee performing work, such as
building an attendant's booth or demarcating parking spaces, from the
Log.
Recreation facilities. Although the proposed rule would have
included recreational facilities in the definition of establishment, it
would have excluded, for recordkeeping purposes, injuries and illnesses
occurring to employees who were voluntarily participating in wellness
activities at fitness or recreational facilities maintained by the
employer. As discussed above, OSHA believes that including in the final
rule a list of activities that employers can use to rebut the
presumption of work-relatedness for recordkeeping purposes will greatly
simplify the system for employers and result in the collection of more
meaningful data. Including a list of such activities in the final rule
was supported by many commenters (see, e.g., Exs. 15: 65, 151, 152,
170, 179, 180, 204, 246, 350, 392). The comments of the Tosco
Corporation are representative: ``[w]e agree that the recreational
facilities should not be automatically excluded, but rather that the
voluntary use of the facilities govern the work relatedness as OSHA has
indicated. This will make the OSHA regulation consistent with workers
compensation rulings'' (Ex. 15: 246).
An even larger number of commenters disagreed with OSHA's proposed
approach, however, arguing that a location-based, rather than activity-
based, exclusion was more appropriate for recordkeeping purposes (see,
e.g., Exs. 15: 9, 95, 111, 119, 136, 137, 141, 154, 156, 184, 194, 203,
213, 218, 224, 232, 266, 271, 277, 278, 288, 304, 317, 345, 347, 389,
409, 414, 423, 428, 431). For example, the law firm of Constangy,
Brooks & Smith, LLC, argued that excluding facilities is simpler than
excluding activities: ``* * * [t]he current requirements allow a more
simplified analysis of the recreational facility issue and this
analysis should be retained in place of the more complicated analysis
that would be imposed under the Proposed Recordkeeping Rule'' (Ex. 15:
345).
Other employers stressed the concept that changing the exclusion
for recreational facilities would reduce the incentive for employers to
provide such facilities for their employees' use (see, e.g., Exs. 15:
136, 137, 141, 213, 224, 266, 278). The remarks of the Society for
Human Resource Management (SHRM) are typical: ``[t]o presume that the
employee's usage of weight room facilities is involuntary may be
unrealistic and would likely result in the closure of employer provided
weight rooms, golf courses, and other facilities which benefit the
employees * * *'' (Ex. 15: 431).
In the final rule, OSHA has decided to include recreational areas
in the definition of establishment but to include voluntary fitness and
recreational activities, and other wellness activities, on the list of
excepted activities employers may use to rebut the presumption of work-
relatedness in paragraph 1904.5(b)(2). OSHA finds that this approach is
[[Page 6077]]
simpler and will provide better injury and illness data because
recreational facilities are often multi-use areas that are sometimes
used as work zones and sometimes as recreational areas. Several of the
interpretations OSHA has provided over the years address this problem.
For example, the loading dock or warehouse at some establishments has
an area with a basketball hoop that is used for impromptu ball games
during breaks, while at other establishments employees may use a grassy
area to play softball, an empty meeting room for aerobics classes, or
the perimeter of the property as a jogging or bicycling track.
Providing an exception based on activity will make it easier for
employers to evaluate injuries and illnesses that occur in mixed-use
areas of the facility.
This approach is also consistent with OSHA's overall approach in
the final rule of using specific activity-based exemptions to allow the
employer to rebut the presumption of work relationship rather than
providing exemptions by modifying the definition of establishment. OSHA
also does not believe that this approach will provide an incentive for
employers to eliminate recreational and fitness opportunities for their
employees. Both approaches exempt the same injuries from recording, but
the final rule's approach provides employers with a more
straightforward mechanism for rebutting the presumption of work
relationship.
OSHA believes that injuries and illnesses occurring to employees
who are present in recreational areas as part of their assigned work
duties should be recorded on the Log; the final rule thus only permits
employers to exclude recreational activities that are being performed
by the employee voluntarily from their Logs. For example, an injury to
an exercise instructor hired by the company to conduct classes and
demonstrate exercises would be considered work related, as would an
injury or illness sustained by an employee who is required to exercise
to maintain specific fitness levels, such as a security guard.
Private homes as an establishment. Two commenters raised the issue
of whether or not private homes could constitute an establishment (see,
e.g., Exs. 21, 15: 304, 358). The National Federation of Independent
Business (NFIB) stated: ``[N]FIB believes that the definition of
establishment as applied to extremely small work sites, including
private homes, needs to be reexamined'' (Ex. 15: 304). The Organization
Resource Counselors (ORC) added: ``[d]efinition of establishment as
applied to extremely small work sites including private homes needs to
be reexamined. The sixty day rule by itself does not seem unreasonable
except that it captures these small work sites where the requirements
for posting or mailing summaries make little sense'' (Ex. 21).
In the final rule, OSHA has not excluded private homes from the
definition of establishment because many private homes contain home
offices or other home-based worksites, and injuries and illnesses
occurring to employees during work activities performed there on behalf
of their employer are recordable if the employer is required to keep a
Log. However, the final rule makes clear that, in the case of an
employee who telecommutes from his or her home, the home is not
considered an establishment for OSHA recordkeeping purposes and the
employer is not required to keep a separate Log for the home office.
For these workers, the worker's establishment is the office to which
they report, receive direction or supervision, collect pay, and
otherwise stay in contact with their employer, and it is at this
establishment that the Log is kept. For workers who are simply working
at home instead of at the company's office, i.e., for employees who are
telecommuting, OSHA does not consider the worker's home to be an
establishment for recordkeeping purposes, and the definition of
establishment makes this fact clear. OSHA has recently issued a
compliance directive clarifying that OSHA does not and will not inspect
home offices in the employee's home and would inspect a home-based
worksite other than a home office only if the Agency received a
complaint or referral. A fuller discussion concerning the determination
of the work-relatedness of injuries and illnesses that occur when
employees are working in their homes can be found in the discussion of
Sec. 1904.5 Determination of work-relatedness.
Miscellaneous issues. Two commenters recommended that OSHA consider
excluding injuries and illnesses occurring to employees while they were
present in other areas as well (Exs. 15: 203, 389). The International
Dairy Foods Association (IDFA) suggested:
[i]n addition, facilities such as cafeterias/lunch/break/rest/locker
rooms should be exempted except for the employees who work in those
areas. While it is true that other workers may occasionally be
injured in these areas, the inclusion of all injury/illness
information that occurs in these areas only distorts the data. OSHA
should be concerned with the accuracy of any information it requires
and/or collects and should eliminate any non-relevant or extraneous
information. We believe that this anomaly is easily correctable, and
the result will be a more accurate assessment of hazards associated
with a specific workplace (Ex. 15: 203).
OSHA does not agree with this commenter that injuries and illnesses
occurring in such areas are not work-related. For example, many
injuries occurring in lunch rooms involve slippery floors, which the
employer can address by establishing a system for immediate spill
cleanup. However, the final rule does contain an exception from
recordability of cases where the employee, for example, chokes on his
or her food, is burned by spilling hot coffee, etc. (see paragraph
1904.5(b)).
The United Parcel Service (UPS) recommended that OSHA craft its
rule to coincide with the company's personnel records system, stating
``[t]he unit for which an employer maintains personnel records is
presumptively appropriate and efficient; accordingly, OSHA should not
mandate a rule that conflicts with a company's current personnel units
policy'' (Ex. 15: 424). OSHA recognizes that employers would prefer
OSHA to allow companies to keep records in any way they choose.
However, OSHA believes that allowing each company to decide how and in
what format to keep injury and illness records would erode the value of
the injury and illness records in describing the safety and health
experience of individual workplaces and across different workplaces and
industries. OSHA has therefore decided not to adopt this approach in
the final rule.
Two commenters raised the issue of centralized recordkeeping as it
related to the proposed definition of establishment. The General
Electric Company (GE) stated:
[G]E does not support the redefinition of establishment to mean
a single physical location that is in operation for 60 calendar days
or longer. GE field staff frequently establish such establishments
and the illness and injury recording and reporting for these sites
has been done at central locations. The required data therefore is
already collected but the new definition would substantially
increase the administrative burden for employers, without providing
any additional value. Currently, field employees can report an
injury to one well-trained individual who is able to properly
administer the program and keep all required documentation. Under
this new rule, the employer would need to train a significantly
greater number of employees on the proper method for recording
injuries and illnesses, keeping documentation, and ensuring the
submission of this information to the central office for long-term
retention. Further, turnover in the field service operations
necessitates an ongoing training program. GE would prefer to train
field service employees on GE's
[[Page 6078]]
expectations for safe performance and how to perform their jobs
safely, rather then training field service employees on OSHA
recordkeeping regulations (Ex. 15: 349).
OSHA will continue to allow employers to keep their records
centrally and on computer equipment, and nothing in the final rule
would preclude such electronic centralization. OSHA believes that the
definition of establishment in the final rule will have no impact on
the ability of the employer to keep records centrally; however, the
final rule does continue to require employers to summarize and post the
records for each establishment at the end of the year.
The North Carolina Department of Labor (Ex. 15: 186) suggested that
OSHA add a note cross-referencing the rule's exceptions for work
relationship in parking lots, to assist readers in locating them. OSHA
has not added a note to the definition but believes that the list of
exceptions to the presumption of work-relationship will achieve the
objective this commenter intended. In addition, OSHA has included a
table showing changes from the former system to the new system in the
compliance assistance and training materials it is distributing to
employers and employees.
Health Care Professional
The final rule defines health care professional (HCP) as ``a
physician or other state licensed health care professional whose
legally permitted scope of practice (i.e. license, registration or
certification) allows the professional independently to provide or be
delegated the responsibility to provide some or all of the health care
services described by this regulation.''
The proposed rule used the term ``health care provider,'' defined
as a person operating within the scope of his or her health care
license, registration or certification. The final rule uses the term
``health care professional'' to be consistent with definitions used in
the medical surveillance provisions of other OSHA standards (see, e.g.,
the methylene chloride final rule (29 CFR 1910.1052).
OSHA recognizes that injured employees may be treated by a broad
range of health care practitioners, especially if the establishment is
located in a rural area or if the worker is employed by a small company
that does not have the means to provide on-site access to an
occupational nurse or a physician. Although the rule does not specify
what medical specialty or training is necessary to provide care for
injured or ill employees, the rule's use of the term health care
professional is intended to ensure that those professionals providing
treatment and making determinations about the recordability of certain
complex cases are operating within the scope of their license, as
defined by the appropriate state licensing agency.
The rulemaking record reflects a wide diversity of views on this
topic. Many commenters thought the proposed definition was much too
broad, leaving ``[t]he door open for unqualified individuals to make
medical diagnoses'' (see, e.g., Exs. 15: 342, 201). Many commenters
also argued that the proposed definition could be misinterpreted (see,
e.g., Exs. 31, 15: 131, 342, 397). Specifically, many employers thought
the definition could be interpreted to permit untrained or unlicensed
individuals to treat employees or to make medical diagnoses that would
determine the recordability of certain an injuries or illnesses (see,
e.g., Exs. 15: 304, 355, 433). Additionally, some commenters
interpreted the proposed definition to mean that any time an individual
who was certified or trained in cardiopulmonary resuscitation (CPR) or
first aid administered treatment, the case would automatically be
recordable (see, e.g., Exs. 15: 116, 132, 323, 341, 356). For example,
the National Federation of Independent Business noted:
[u]nlike licensed practitioners, those who are registered or
certified are not consistently judged against stringent objective
criteria. Oftentimes registration is obtained by paying a fee and
certification usually entails attending training courses on how to
administer first aid. In any given place of employment it is common
to find at least one employee who is trained and certified in first
aid care. Simple actions on the part of such an employee could
become recordable instances under this proposal. This would only
serve to erroneously inflate statistics thus making the work site
log an inaccurate reflection of occupational injuries and illnesses
(Ex. 15: 304).
Consequently, many commenters advocated qualifying the proposed
definition by limiting it to providers with specific types of training,
such as licensed physicians (see, e.g., Exs. 15: 42, 105) or other
providers, such as dentists, psychiatrists, or clinical psychologists
(see, e.g., Exs. 15: 126, 312, 342, 410, 433, 443) and/or practitioners
operating under their direction, such as physician assistants and
nurses (see, e.g., Exs. 15: 116, 131, 334, 344, 441).
Some commenters proposed eliminating the words ``registration'' and
``certification'' from the definition because these terms have
different meanings in different states, and in some states, some
providers can pay to be certified or registered even though their
credentials are inadequate (see, e.g., Exs. 15: 199, 272, 303, 375). A
few commenters also noted that some registrations and certifications
are given by professional associations rather than state agencies. For
example, according to the American Academy of Physician Assistants:
[w]hile many health care providers receive professional
certification through a private certifying body (e.g. board
certification in cardiology for a doctor), this ``certificate'' is
not automatically tied to any state recognized credential or scope
of practice permitting the provision of health care services. PAs,
for example, are certified by the National Commission on
Certification of Physician Assistants. This certification is not
synonymous with a state certificate or license. As the proposed rule
is currently worded, an NCCPA-certified PA or a physician who is
board certified in cardiology would qualify as a ``health care
provider.'' However, OSHA would not be assured that the PA or
physician was practicing medicine with a license and in compliance
with their state scope of practice. Further, it would be illegal in
all states for a PA or a physician to provide health care services
based solely on their professional certification (Ex. 15: 81).
Still others feared that registered or certified ``alternative
medicine'' providers, such as acupuncturists and massage therapists,
might influence an employer's recordkeeping decision (see, e.g., Exs.
15: 184, 317, 430).
The proposed definition was, however, supported by several unions,
large and small employers, and professional associations representing
those health care personnel who might be excluded by a more restrictive
definition (see, e.g., Exs. 15: 9, 72, 137, 170, 204, 278). These
commenters generally advocated a broader definition because such a
definition would recognize the various types of health care personnel
who may be called on to attend an injured employee (see, e.g., Exs. 15:
181, 350, 376, 392, 417). Typical of these comments was one from The
Fertilizer Institute:
[O]SHA should not qualify and limit this definition to personnel
with specific training due to the wide variation in health care
support and training available throughout the country. Because not
all facilities are located in large metropolitan areas where a wide
variety of medical training is available, it may be difficult, if
not impossible to satisfy Administration-specified minimal training
(Ex. 15: 154).
These commenters did agree, however, that to ensure the availability of
quality health care to employees, health care professionals must be
licensed or
[[Page 6079]]
certified by the state(s) in which they practice and must operate
within the scope of that license or certification (see, e.g., Exs. 24,
15: 81, 181, 350, 417). In particular, several commenters stressed the
need to define the term ``health care professional'' as one practicing
``in accordance with the laws of the applicable jurisdiction'' (Ex. 15:
409; see also Exs. 15: 308, 349).
Additionally, the AFL-CIO cautioned that using a broad definition
of the term ``health care provider'' in this recordkeeping rule should
not supersede or in any way affect the provisions of many OSHA health
standards that specifically require a physician to perform medical
surveillance of occupationally exposed employees:
[a]ll of OSHA's 6(b) health standards, except for Bloodborne
Pathogens, require that the medical examinations required by the
rules be carried out by a physician or under the supervision of a
licensed physician. Many of these standards further require that a
physician evaluate the results of the exam and provide a diagnosis
and opinion as to whether any adverse medical condition has been
detected. Some standards such as lead, benzene, and formaldehyde
also require the physician to determine whether or not an employee
should be removed from his or her job due to occupational exposures.
[In contrast], the proposed recordkeeping rule would allow
diagnoses for conditions covered by these standards (e.g., lead
poisoning, asbestosis, byssinosis) to be made by any health care
provider operating within the scope of their license. We are
concerned that this discrepancy and inconsistency may lead to
confusion about the requirements for medical surveillance under
OSHA's health standards (Ex. 15: 418).
Therefore, the AFL-CIO recommended that OSHA insert a provision in
the proposed recordkeeping rule that would ensure that it is not
interpreted as superseding the requirements of those standards. OSHA
shares this concern and does not intend the use of the term ``health
care professional'' in this rule to modify or supersede any requirement
of any other OSHA regulation or standard.
On the basis of the record, OSHA finds that there is a broad
consensus among commenters that only qualified health care
professionals should make diagnoses and treat injured employees, and
that state licensing agencies are best suited to determine who may
practice and the legal scope of that practice (see, e.g., Exs. 15: 31,
65, 95, 154, 184, 201, 288, 308, 335, 349, 409, 425). The definition in
the final rule ensures that, although decisions about the recordability
of a particular case may be made by a wide range of health care
professionals, the professionals making those decisions must be
operating within the scope of their license or certification when they
make such decisions.
Injury or Illness
The final rule's definition of injury or illness is based on the
definitions of injury and illness used under the former recordkeeping
regulation, except that it combines both definitions into a single term
``injury or illness.'' Under the final rule, an injury or illness is an
abnormal condition or disorder. Injuries include cases such as, but not
limited to, a cut, fracture, sprain, or amputation. Illnesses include
both acute and chronic illnesses, such as, but not limited to, a skin
disease, respiratory disorder, or systemic poisoning. The definition
also includes a note to inform employers that some injuries and
illnesses are recordable and others are not, and that injuries and
illnesses are recordable only if they are new, work-related cases that
meet one or more of the final rule's recording criteria.
Former rule's definition. The former rule also defined these terms
broadly, as did the proposal. The text of the former recordkeeping rule
did not include a definition of injury or illness; instead, the
definitions for these terms were found on the back of the OSHA 200 Log
and in the former Recordkeeping Guidelines (Ex. 2, p. 37). The
definition of occupational injury found in the Guidelines was:
Occupational injury is any injury such as a cut, fracture,
sprain, amputation, etc., which results from a work accident or from
an exposure involving a single incident in the work environment.
Note: Conditions resulting from animal bites, such as insect or
snake bites, or from one-time exposure to chemicals are considered
to be injuries.
An occupational illness was defined as:
[a]ny abnormal condition or disorder, other than one resulting from
an occupational injury, caused by exposure to environmental factors
associated with employment. It includes acute and chronic illnesses
or diseases which may be caused by inhalation, absorption,
ingestion, or direct contact.
The former rule's definitions of injury and illness captured a very
broad range of injuries, including minor injuries such as scratches,
bruises and so forth, which the employer then tested for work-
relatedness and their relationship to the recording criteria. The
former rule's definition of illness was even broader, including
virtually any abnormal occupational condition or disorder that was not
an occupational injury. However, the recording of illnesses under the
former rule was more inclusive than is the case for the final rule
being published today because the former rule required employers to
record every occupational illness, regardless of severity. The final
rule applies the same recording criteria to occupational illnesses as
to occupational injuries, and thus rules out minor illnesses (see the
Legal Authority section and the preamble discussion accompanying
section1904.4).
The former rule's broad definition of illness was upheld in a 1989
Occupational Safety and Health Review Commission decision concerning
the recording of elevated levels of lead in the blood of workers
employed at a battery plant operated by the Johnson Controls Company.
In that decision (OSHRC 89-2614), the Occupational Safety and Health
Review Commission found that:
[a]s the Secretary states in his brief on review ``The broad
applicability of the term ``illness'' adopted in the BLS Guidelines
serves this purpose [to set explicit and comprehensive recording
requirements designed to obtain accurate and beneficial statistics
regarding the causes of occupational disease] by including health
related conditions which may not look like, or may not yet be,
treatable illnesses.'' Accordingly, for the purposes of the
Secretary's recordkeeping regulations promulgated pursuant to
sections 8(c)(1) and (2) of the Act, we accept the Secretary's
interpretation of ``illness'' that includes blood lead levels at or
above 50 ug/100g.
Proposed rule's definition. OSHA proposed a new, broad definition
that encompassed both occupational injury and occupational illness.
This approach was consistent with one of the goals of the proposal, to
eliminate the distinction between injury and illness entirely for
recordkeeping purposes. OSHA's proposed definition of an injury or
illness was:
``Injury or illness'' is any sign, symptom, or laboratory
abnormality which indicates an adverse change in an employee's
anatomical, biochemical, physiological, functional, or psychological
condition (61 FR 4058).
Comments on the proposed definition. Many commenters remarked that
the proposed definition of injury and illness was too broad and all
encompassing (see, e.g., Exs. 25, 33, 15: 95, 120, 156, 174, 176, 199,
201, 213, 231, 273, 282, 301, 305, 318, 331, 346, 348, 375, 383, 386,
395, 420, 424, 425, 430). The views of the National Association of
Manufacturers (NAM) are representative of this view:
[a] second option is to re-examine the scope of the proposed
definition of the term ``injury or illness,'' which appears to go
well beyond the normal understanding of the medical profession. That
definition is so broad it includes virtually any change in the
status of the employee. In contrast, Dorland's
[[Page 6080]]
Illustrated Medical Dictionary defines the term ``illness'' as a
condition marked by ``pronounced deviation from the normal healthy
state.'' Accordingly, the NAM believes the proposed definition of
the term ``injury or illness'' would be far more accurate and
credible if it were modified to read substantially as follows ``Any
sign, symptom, or laboratory abnormality which evidences a
significant adverse change in an employee's anatomical, biochemical,
physiological, functional, or psychological condition, and which
evidences a state of ill-health or a reasonable probability that
ill-health will result (Exs. 25, 15: 305).
The American Iron and Steel Instute (AISI) also objected to the
definition, stating that:
OSHA also fails to provide any guidance as to what constitutes a
``change'' in an employee's condition. If a person is tired at the
end of the day, does that constitute a change in his physical
condition? If a person is grumpy at the end of a long shift, has he
undergone a change in his psychological condition? If a person gains
weight, has his ``anatomical'' condition ``changed''? OSHA's
proposed definition would force employers to address these questions
but provides none of the answers. * * * Finally, in addition to
inviting gross intrusions into employees' lives, the concept of an
``adverse'' psychological change is so vague and burdened with value
judgments that it simply is beyond definition.
Several other commenters urged OSHA to add the word ``significant''
and the phrase ``and which evidences a state of ill-health or a
reasonable probability that ill-health will result'' to the final
rule's definition of injury or illness (see, e.g., Exs. 15: 169, 174,
199, 282, 305, 318, 346, 348, 375, 386, 420, 425).
A number of commenters stated that they did not understand the word
``functional'' in the definition, and particularly how its meaning
differs from that of the word ``physiological'' in the definition (see,
e.g., Exs. 15: 313, 352, 353, 424). Several commenters also suggested
the deletion from the definition of an occupational injury or illness
any reference to signs, symptoms or laboratory abnormalities (see,
e.g., Exs. 33, 15: 176, 231, 273, 301). The Pacific Maritime
Association (Ex. 15: 95) suggested that OSHA delete the proposed
definition of injury or illness and replace it with the following:
``[an injury or illness] is any condition diagnosed by a health care
provider.'' Two commenters suggested excluding psychological conditions
from the definition of injury or illness (Exs. 15: 395, 424). A
discussion of mental conditions and OSHA's reasons for including them
in the definition is included in the preamble discussion of work-
relationship at section 1904.5, Determination of work relatedness. OSHA
has decided to continue to include psychological conditions in the
final rule's definition of injury and illness because many such
conditions are caused, contributed to, or significantly aggravated by
events or exposures in the work environment, and the Agency would be
remiss if it did not collect injury and illness information about
conditions of these types that meet one or more of the final rule's
recording criteria.
In the final rule, OSHA has relied primarily on the former rule's
concept of an abnormal condition or disorder. Although injury and
illness are broadly defined, they capture only those changes that
reflect an adverse change in the employee's condition that is of some
significance i.e. that reach the level of an abnormal condition or
disorder. For example, a mere change in mood or experiencing normal
end-of-the-day tiredness would not be considered an abnormal condition
or disorder. Similarly, a cut or obvious wound, breathing problems,
skin rashes, blood tests with abnormal results, and the like are
clearly abnormal conditions and disorders. Pain and other symptoms that
are wholly subjective are also considered an abnormal condition or
disorder. There is no need for the abnormal condition to include
objective signs to be considered an injury or illness. However, it is
important for employers to remember that identifying a workplace
incident as an occupational injury or illness is only the first step in
the determination an employer makes about the recordability of a given
case.
OSHA finds that this definition provides an appropriate starting
point for decision-making about recordability, and that the
requirements for determining which cases are work-related and which are
not (section 1904.5), for determining which work-related cases reflect
new injuries or illnesses rather than recurrences (section 1904.6), and
for determining which new, work-related cases meet one or more of the
general recording criteria or the additional criteria (sections 1904.7
to 1904.12) together constitute a system that ensures that those cases
that should be recorded are captured and that minor injuries and
illnesses are excluded. In response to the desire of many commenters
for greater clarity, OSHA has added language to the definition of
injury and illness to make it clear that many injuries and illnesses
are not recordable, either because they are not work-related or because
they do not meet any of the final rule's recording criteria.
In general, all of those commenters who opposed the proposed
definition wished OSHA to revise the definition so that it would
provide an initial screening mechanism for excluding minor injuries and
illnesses, even before the status of the case vis-a-vis the geographic
presumption or recording criteria was assessed. OSHA recognizes that
the proposed language referring to any adverse change was too broad,
and has returned to the former language requiring that the change reach
the ``abnormal condition'' level. OSHA recognizes that this is still a
broad definition--deliberately so. After reviewing this issue
thoroughly, OSHA finds that a system that initially defines injury and
illness broadly and then applies a series of screening mechanisms to
narrow the number of recordable incidents to those meeting OSHA and
statutory criteria has several advantages. First, by being inclusive,
this system avoids the problem associated with any ``narrow gate''
approach: that some cases that should be evaluated are lost even before
the evaluation process begins. Second, this approach is consistent with
the broad definitions of these terms that OSHA has used for more than
20 years, which means that the approach is already familiar to
employers and their recordkeepers. Third, adding terminology like
``significant'' and ``reasonable probability that ill-health will
result,'' as commenters suggested, would unnecessarily complicate the
first step in the evaluation process.
Accordingly, the definition of injury and illness in the final rule
differs from the former definition only in minor respects. The
definition is based on the former rule's definitions, simply combining
the separate definitions of injury and illness into a single category,
to be consistent with the elimination of separate recording thresholds
for occupational injuries and occupational illnesses. As discussed
above, OSHA has elected to continue to use a broad definition of
illness or injury. The definition in the final rule also makes it clear
that each injury and illness must be evaluated for work-relatedness, to
decide if it a new case, and to determine if it is recordable before a
covered employer must enter the case in the OSHA recordkeeping system.
``You''
The last definition in the final rule, of the pronoun ``you,'' has
been added because the final rule uses the ``you'' form of the
question-and-answer plain-language format recommended in Federal plain-
language guidance. ``You,'' as used in this rule, mean the employer, as
that term is defined in the Act. This definition makes it clear that
employers are responsible for implementing the requirements of this
[[Page 6081]]
final rule, as mandated by the Occupational Safety and Health Act of
1970 (29 U.S.C. 651 et seq.)
VIII. Forms
This section of the preamble includes a copy of the final forms
package. For a discussion of the contents, the old forms, the proposed
forms, and comments to the proposed forms, refer to the preamble
discussion of Subpart C. 1904.6 Forms. The forms fit on 11" by 14"
legal sized paper. The forms do not appear in the Federal Register due
to printing considerations. To obtain a copy contact OSHA's
Publications Office at (202) 693-1888, order the forms from the OSHA
Internet home page (http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.osha.gov) or download the forms from the
OSHA home page.
IX. State Plans
The 25 States and territories with their own OSHA approved
occupational safety and health plans must adopt a rule comparable to
the 29 CFR part 1904 recordkeeping and reporting occupational injuries
and illnesses regulation being published today, with the exception of
the requirements of Sec. 1904.41 Annual OSHA Injury and Illness Survey
of Ten or More Employers. These 25 States are: Alaska, Arizona,
California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan,
Minnesota, Nevada, New Mexico, North Carolina, Oregon, Puerto Rico,
South Carolina, Tennessee, Utah, Vermont, Virginia, Virgin Islands,
Washington, and Wyoming; and Connecticut and New York (for State and
local Government employees only).
The former 29 CFR 1952.4 regulation required that States with
approved State-Plans under section 18 of the OSH Act (29 U.S.C. 667)
must adopt occupational injury and illness recording and reporting
regulations which were ``substantially identical'' to those set forth
in 29 CFR part 1904 because the definitions used by the Federal and
State governments for recordkeeping purposes must be identical to
ensure the uniformity of the collected information. In addition, former
Sec. 1952.4 provided that employer variances or exceptions to State
recordkeeping or reporting requirements in a State-Plan State would be
approved by the Bureau of Labor Statistics. Similarly, a State was
permitted to require supplemental reporting or recordkeeping data, but
that State was required to obtain approval from the Bureau of Labor
Statistics to ensure that the additional data would not interfere with
``the primary uniform reporting objectives.''
The proposed revision of 29 CFR 1952.4 would have retained the same
substantive requirements for the State-Plan States, but reflected the
organizational shift of some recordkeeping responsibilities from the
Bureau of Labor Statistics to OSHA in 1990. See also the memorandum of
understanding between OSHA and BLS effective July, 1990 (Ex. 6).
OSHA received no comments directed specifically to proposed section
1952.4. Section 1952.4 of the final rule parallels the provisions of
Sec. 1904.37, State Recordkeeping Regulations, the section of the final
rule implementing the requirements proposed as Sec. 1904.14,
Recordkeeping Under Approved State Plans. The discussion of the
comments and OSHA's decisions on the few issues associated with this
section can be found in the preamble discussion for Sec. 1904.37, State
Recordkeeping Regulations. Section 1952.4 of the final regulation
differs from that of the former regulation in that (1) the final rule
requires the States to consult with and obtain approval from OSHA
rather than BLS when promulgating supplementary fatality, injury or
illness recording and reporting requirements; (2) the final rule allows
the State to grant variances from the fatality, injury and illness
reporting and recording requirements for State and local governments
with Federal approval; and (3) Federal OSHA rather than the BLS is
responsible for issuing all private sector and federal variances from
the 29 CFR part 1904 requirements.
OSHA Data Initiative Surveys
In 1997, OSHA issued a final rule at Sec. 1904.17, OSHA Surveys of
10 or More Employers that required employers to submit occupational
injury and illness data to OSHA when sent a survey form. The 1904.17
rule enabled the Agency to conduct a mandatory survey of the 1904 data,
which has been named the OSHA Data Initiative. Section 1904.41 of the
final rule, Annual OSHA Injury and Illness Survey of Ten or More
Employers, simply carries forward the employer reporting requirements
of the former Sec. 1904.17, with only minor editorial changes.
When OSHA issued the 1997 rule, the Agency determined that the
States were not required to adopt a rule comparable to the federal
Sec. 1904.17 rule (62 FR 6441). Paragraph 1952.4(d) has been added to
the final rule to continue to provide the States with the flexibility
to participate in the OSHA Data Initiative under the Federal
requirements or the State's own regulation. At its outset, Federal OSHA
conducted the OSHA data collection in all of the states, including
those which administer approved State-Plans. However, in recent years,
Federal OSHA has collected data only in the State-Plan States that wish
to participate. For example, in 2000, the states of Oregon, South
Carolina, Washington, and Wyoming elected not to participate in the
annual OSHA survey and employers in those States were not surveyed.
OSHA plans to continue to allow the individual States to decide, on an
annual basis, whether or not they will participate in the OSHA data
collection.
If a State elects to participate, the State may either adopt and
enforce the requirements of section 1904.41 as an identical or more
stringent State regulation, or may defer to the Federal regulation and
Federal enforcement with regard to the mandatory nature of the survey.
If the State defers to the Federal section 1904.41 regulation, OSHA's
authority to implement the survey is not affected either by operational
agreement with a State-Plan State or by the granting of final State-
Plan approval under section 18(e). OSHA's authority under the Act to
take appropriate enforcement action if necessary to compel responses to
the survey and to ensure the accuracy of the data submitted by
employers will be exercised in consultation with the State in State-
Plan states.
X. Final Economic Analysis
1. Introduction
A. Background
OSHA is revising its regulation on Recording and Reporting
Occupational Injuries and Illnesses, which is codified at 29 CFR part
1904. Executive Order 12866, issued by President Clinton on September
30, 1993, requires OSHA to assess the benefits and costs of
regulations, and to design regulations to impose the least burden on
society consistent with achieving the Agency's regulatory objective.
This economic analysis, therefore, was developed to describe the
potential impacts of the final revisions to 29 CFR part 1904.
The final revisions to 29 CFR part 1904 reflect the results of
studies of occupational injury and illness reporting and recordkeeping.
One study of the accuracy and quality of occupational safety and health
statistics was conducted by the National Research Council of the
National Academy of Sciences (NAS), under contract to the Bureau of
Labor Statistics (BLS).4 The NAS report focused on changes to the
[[Page 6082]]
overall strategy for occupational health and safety statistics and
reporting, rather than on specific methods for improving the existing
recordkeeping system. Reform of the occupational health and safety
recordkeeping system was also the topic of a conference convened by the
Keystone Center, an independent, non-profit organization that
specializes in mediating multi-party disputes in the areas of science,
technology, environmental, and health concerns. The Keystone Conference
brought together 46 representatives from labor unions, corporations,
the health professions, government agencies, Congressional staff, and
academia to engage in a year-long dialogue. The Conference's final
report5 was an important source of ideas for some of the changes
being made in OSHA's final recordkeeping rule.
---------------------------------------------------------------------------
4 National Research Council of the National Academy of
Sciences, Counting Injuries and Illnesses in the Workplace: Proposal
for a Better System, 1987.
5 Keystone Center, Keystone National Policy Dialogue on Work-
Related Illness and Injury Recording, 1989.
---------------------------------------------------------------------------
In 1990, the Department of Labor transferred from the Bureau of
Labor Statistics (BLS) to OSHA the responsibility for developing
recordkeeping regulations and their accompanying guidelines. Although
BLS continues to compile occupational injury and illness statistics,
OSHA determines what information needs to be recorded by employers.
This economic analysis measures the potential regulatory impacts of
the final revisions to 29 CFR part 1904. Much of the data for this
analysis derives from a study conducted for OSHA by Meridian
Research.6 The data in the Meridian study, however, have been updated
to reflect more recent data on the numbers of establishments affected
and on rates of occupational illnesses and injuries, as well as the
evidence submitted to the record in the course of this rulemaking.
---------------------------------------------------------------------------
6 Meridian Research, Inc., Economic Analysis of Proposed
Changes to OSHA's Recordkeeping Requirements (29 CFR 1904), 1991.
---------------------------------------------------------------------------
B. Overview of the Final Regulation
The final regulation revises an existing rule, Recording and
Reporting Occupational Injuries and Illnesses (29 CFR part 1904).
Specific changes include changes in coverage, editorial and formatting
changes, and changes in specific provisions that affect the
requirements for recording and reporting. Changes are summarized in
Table X-1.
(1) Editing and Format Changes
Language and Structure of the Rule. The final regulation reflects a
complete rewriting of 29 CFR part 1904. The new version of the rule is
written in plain language, using a question and answer format. This
style is designed to make the rule clearer, more accessible, and easier
to understand. In addition, the final rule contains many questions that
employers frequently ask about recordkeeping, and it provides answers
to those questions. By including these questions and answers in the
rule itself, OSHA has provided employers with a readily available
source of information on how to record particular cases. This means
that the quality of the data being recorded will be higher than was the
case in the past.
Table X-1: Changes in Recordkeeping Requirements
------------------------------------------------------------------------
Section of
Section of final rule former or other Rule change
source
------------------------------------------------------------------------
1904.2............... 1904.16......... Cover parts of SICs 55, 57, 59,
65, 72, 73, 83, & 84; Exempt
parts of SICs 52, 54, 76, 79,
& 80.
1904.5............... Guidelines...... Include specific exemptions
from recording for certain
cases, such as common cold or
flu.
Limit parking lot exemption to
commuting.
Require recording of
preexisting injury or illness
only if workplace exposure
``significantly'' aggravates
the injury or illness.
1904.7............... 1904.12......... Replace term ``lost workdays''
in recording criteria with
``days away'' or ``days
restricted or transferred'';
count days as calendar days,
rather than scheduled work
days; cap count at 180 days;
do not record restricted,
transferred, or lost time
occurring only on day of
injury or illness as
restricted work, job transfer,
or a day away. Define routine
duties for restricted work
purposes as work activities
done at least once per week.
Define medical treatment
beyond first aid to include
all non-prescription drugs
given at prescription strength
and first and subsequent
physical therapy or
chiropractic treatment and to
exclude use of Steri-StripsTM
and hot or cold therapy.
1904.7............... (New)........... Narrow criteria for recording
illnesses by excluding minor
illnesses.
1904.8............... (New)........... Record all needlestick/sharps
injury cases involving
exposure to blood or other
potentially infectious
materials.
1904.10.............. Interpretation.. Record all hearing loss cases
at 10 dB shift, rather than 25
dB shift.
1904.11.............. Interpretation.. Narrow criteria for recording
positive tuberculosis test.
1904.12.............. 1904.12......... Make criteria for recording MSD
cases the same as those for
all other injuries and
illnesses.
1904.29.............. 1904.2.......... Replace old Log form with
simplified Form 300.
Require that cases be recorded
within 7 calendar days rather
than 6 working days.
1904.29.............. 1904.4.......... Require more information on new
Form 301 than on former Form
101.
1904.29.............. (New)........... Define new category of
``privacy concern cases'' and
require maintenance of
separate, confidential list of
names for such.
1904.29.............. (New)........... Require employer to protect
privacy of injured or ill
workers by withholding names,
with certain exceptions.
1904.32.............. 1904.5 (New).... Post Annual Summary for 3
months rather than 1 month.
Review records for accuracy at
end of year.
Require descriptive and
statistical totals in Annual
Summary.
Require certification of
accuracy of the Log by
responsible company official.
1904.34.............. 1904.11......... With change of ownership,
require seller to turn over
OSHA records to buyer.
1904.35.............. (New)........... Inform employees how to report
injuries or illnesses to
employer.
Provide union representative
access to some, but not all,
Form 301 information.
1904.39.............. 1904.8.......... Delete requirement for common
carrier and motor vehicle
incidents to be reported.
------------------------------------------------------------------------
[[Page 6083]]
The rule also has been completely restructured. Its provisions have
been put into a logical sequence, with topics addressed as an employer
would encounter them when complying with the rule. The numbering of
sections within 29 CFR part 1904 has been entirely revised.
The final rule includes considerable detail not found in the former
rule. This detail generally reflects interpretations that OSHA has made
over time. By including these in the rule itself, OSHA intends to make
the rule far clearer. Interpretations and related details are formatted
as check lists, for ease of interpretation.
(2) Specific Changes in Regulatory Provisions
(a) Changes in Coverage
Former rule. The former rule exempted all employers with 10 or
fewer employees and all employers in specific low-hazard retail and
service industry sectors from routinely keeping OSHA records. The
industry exemptions were based on injury and illness data at the 2-
digit SIC code level.
Final rule. The final rule continues the former rule's exemption of
all employers with 10 or fewer employees from routine recordkeeping
requirements. The final rule also exempts all employers in specific
lower-hazard retail and service industry sectors, as the former rule
did, from maintaining OSHA records routinely. The final rule exempts 3-
digit SIC industries if their average lost workday injury (LWDI) rate
was at or below 75% of the overall private sector LWDI average rate in
the most recent BLS occupational injury and illness data.
Change. Updating the list of exempted industry categories by
relying on 3-digit, rather than 2-digit, data in the final rule results
in 17 formerly exempt industries being covered under the final rule
(see Table X-2). Employers in 16 industries that were covered by the
former rule are exempted by the final rule (see Table X-3). The
exemptions in the final rule are better targeted than those in the
former rule, because high-hazard 3-digit industries embedded within
lower-hazard 2-digit industries are not exempted, while low-hazard 3-
digit industries embedded within higher-hazard 2-digit industries are
exempted. Employers in the newly covered industries will experience
additional costs and benefits from these new requirements, while newly
exempted employers will also experience changes in costs and benefits.
These costs and benefits are quantified in this economic analysis.
(b) Changes to the OSHA Forms
Former rule. The former rule required the employer to maintain two
forms, the OSHA 200 Log and Summary of Occupational Injuries and
Illnesses (one form including both a Log and Summary), and the OSHA 101
Supplementary Record of Occupational Injuries and Illnesses. The
employee who supervised the production of the annual summary was
required to certify it.
Final rule. The final rule requires the employer to maintain up to
four records: the OSHA 300 Log of Work-Related Injuries and Illnesses,
the OSHA 300-A Summary of Work-Related Injuries and Illnesses, the OSHA
301 Injury and Illness Incident Report, and, if one or more employees
experiences an injury or illness case classified as a ``privacy
concern'' case, a confidential list of those employees. (See discussion
of privacy provisions below.)
Change. The new OSHA 300 Log is smaller than the Former OSHA 200
Log, fits on legal sized pages (8 1/2'' x 14''), has fewer columns
and a more logical, user friendly design. Each injury and illness must
be recorded within 7 calendar days, rather than the 6 working days
allowed under the former rule. Although the 300 Log requires
essentially the same information as the former 200 Log, it is easier to
complete, which will result in cost savings for employers. These
savings are quantified in this economic analysis.
The OSHA 300-A Summary Form replaces the summary portion of the
former OSHA 200 Log and Summary Form. Each covered employer must
complete the summary at the end of the year and post it for 3 months,
while the former rule required posting for one month. The longer
posting period will result in only minimal additional costs. The final
rule also requires the employer to review the records at year end for
accuracy before summarizing them, requires additional certification of
accuracy by a company executive, and requires additional data on the
average employment and hours worked at the establishment. These changes
will result in higher quality data, and will also add costs for
employers. These costs are quantified in this economic analysis.
The OSHA 301 Incident Report is only slightly different from the
OSHA 101 Form that it replaces. Some data elements have been added to
the form. In addition, the form has been redesigned to obtain better
responses to the questions and to accommodate employee access to the
forms while still protecting privacy (see discussion below). Costs of
recording additional data elements are quantified in this economic
analysis.
(c) Changes in the Recording Criteria
The final rule includes a number of changes that will affect the
number of recorded cases, and thus potentially affect the costs and
costs savings associated with the regulation. Some of these changes
will result in more cases being recorded, as follows: (1) Changes to
the definitions of medical treatment and first aid, (2) change to the
criterion for recording cases of hearing loss, and (3) change to the
criterion for recording needlestick and sharps injuries.
Other changes will result in fewer cases being recorded, as
follows: (1) Exemptions from the requirement to consider certain cases
work-related, (2) elimination of different recording criteria for
injuries and illnesses, (3) changes to the requirements for recording
injuries and illnesses with days away or job restriction/transfer, (4)
changes to the criteria for recording cases of tuberculosis, and (5)
elimination of separate recording criteria for musculoskeletal
disorders.
Because the final rule makes a number of changes, some of which
increase the number of recordable injuries and illnesses and some of
which decrease the number of recordable cases, it is difficult to
estimate the precise impact of each change. OSHA expects that these
changes, with two exceptions, will generally have the effect of
offsetting each other, with the result that approximately the same
number of injury and illness cases will be recorded under the final
rule as were recorded under the former rule. The costs and cost savings
associated with each small definitional change have not been quantified
in this economic analysis. However, the changes made in the recording
of hearing loss cases and the recording of needlestick and sharps
injury cases will result in quantifiable increases in the number of
recorded injuries. The cost effects of these changes are specifically
identified in this economic analysis.
OSHA recognizes that individual employers will be affected
differently by the changes made in the final rule and that some
employers will record more cases under the final rule while others will
record fewer. OSHA also finds that the overall effect of the changes
made to the final rule is to greatly ease the determination of
recordability, and has quantified these cost savings in this economic
analysis.
[[Page 6084]]
(i) Changes to the Determination of Work-Relationship
Former rule. Under the former rule, work-relationship was
established if work either caused or contributed to the injury or
illness, or aggravated a pre-existing condition. Injuries and illnesses
that occurred on the employer's premises were presumed to be work-
related, with three exceptions: cases that occurred in a parking lot or
recreational facility, cases that occurred while the employee was
present at the workplace as a member of the general public and not as
an employee, and cases where injury or illness symptoms arose at work
but were the result of a non-work-related injury or illness were not
required to be recorded.
Final rule. Work relationship is established if work either caused
or contributed to the injury or illness, or significantly aggravated a
pre-existing condition. The final rule continues the former rule's
geographic presumption of work relationship but adds several additional
exceptions to the need to record cases involving: voluntary
participation in wellness programs, eating and drinking food or
beverages for personal consumption, intentionally self-inflicted
wounds, personal grooming, or the common cold or flu. The final rule
also contains an exception that limits the recording of mental illness
cases.
Change. The final rule changes the requirement to record cases in
which any degree of aggravation of a preexisting injury or illness has
occurred; now, the work environment must have significantly aggravated
a pre-existing injury or illness before the case becomes work-related.
The final rule also adds several new exceptions to the geographic
presumption of work relationship. Both of these changes will result in
fewer cases being recorded under the final rule.
(ii) Elimination of Different Recording Criteria for Injuries and
Illnesses
Former rule. Under the former rule, employers were required to
record all work-related deaths, all illnesses, and injuries that
resulted in days away from work, restricted work, transfer to another
job, medical treatment beyond first aid, or loss of consciousness. The
employer was required to decide if the case was either an injury or
illness; injuries included all back cases and any case caused by an
instantaneous event, while illnesses were any abnormal condition or
disorder caused by a non-instantaneous event. The employer was required
to record every illness case, regardless of severity.
Final rule. Under the final rule, the employer is not required to
determine whether a case is an injury or illness to decide whether or
not to record the case. A case is recordable if it results in death,
days away from work, job restriction or transfer, medical treatment
beyond first aid, loss of consciousness, or if the case is a
significant injury or illness diagnosed by a physician or other
licensed health care professional. Additional criteria are included for
cases of hearing loss, tuberculosis, and needlestick injuries and the
rule clarifies how to record musculoskeletal disorders and cases
involving medical removal or work restriction under OSHA's standards.
Change. The new general recording criteria eliminate the recording
of minor illness cases, which will result in fewer cases being recorded
by employers, and lower costs. The new criteria for recording hearing
loss and needlestick cases will increase the number of cases and the
costs associated with recording.
(iii) Days Away and Job Restriction/Transfer
Former rule. Under the former rule, employers were required to
record lost workday cases, which were defined as any case that resulted
in days away from work and/or days of restricted work or job transfer.
Restricted work included any case when because of injury or illness (1)
the employee was assigned to another job on a temporary basis, (2) the
employee worked at a permanent job less than full time, or (3) the
employee worked at his or her permanently assigned job but could not
perform his or her routine duties. Routine duties were defined as any
activity the employee would be expected to perform even once during the
course of the year. The employer was required to record any case that
involved restricted work, even if the restriction occurred only on the
day the injury or illness occurred.
Employers were also required to count days as the number of
scheduled days away or restricted, i.e., to use a counting system that
included only scheduled work days and excluded any days off, such as
weekends and days the plant was closed.
Final Rule. The final rule continues to require employers to record
cases with days away from work, restricted work or transfer to another
job. For restricted work/job transfer, the final rule focuses on
whether or not the employee is permitted to perform his or her routine
job functions, defined as the duties he or she would have performed at
least once per week before the injury or illness. If the work
restriction is limited to the day of the injury or illness, and none of
the other recording criteria are met, the case is not recordable.
The final rule continues to require the employer to count days away
from work and days of restricted work/job transfer. However, the days
are counted using calendar days, and employers may stop the count at
180 days. The employer also may stop counting restricted days if the
employer permanently modifies the employee's job in a way that
eliminate the routine functions the employee was restricted from
performing.
Change. The final rule shifts the focus of the definition of
restricted work to the routine functions of the job and away from the
former rule's focus on any activity the injured or ill employee might
have performed during the work year, and eliminates the requirement to
record cases that involve restrictions only on the day of injury or
illness. These changes will result in fewer cases being recorded, and
will have the effect of reducing costs for employers.
The final rule's changes to the method of counting days, i.e.,
relying on calendar days instead of scheduled work days, will simplify
the counting requirements and produce more reliable information on
injury and illness severity. Both the change to the calendar day
counting method and the capping of days away and days restricted or
transferred at 180 days will have the effect of reducing costs for
employers.
(iv) Changes to the Definitions of Medical Treatment and First Aid
Former rule. The former rule defined medical treatment as any
treatment, other than first aid treatment, administered to injured or
ill employees. Medical treatment involved the provision of medical or
surgical care for injuries through the application of procedures or
systematic therapeutic measures.
The former regulation defined first aid as ``any one-time
treatment, and any follow up visit for the purpose of observation, of
minor scratches, cuts, burns, splinters, and so forth, which do not
ordinarily require medical care. Such one-time treatment, and follow up
visits for the purpose of observation are considered first aid even
though provided by a physician or registered professional personnel.''
The former Recordkeeping Guidelines provided two lists of
treatments employers could use to determine whether a particular
treatment was first aid or medical treatment for recordkeeping
purposes. For example, the use of prescription drugs was generally
considered medical treatment, except when only a single dose was
[[Page 6085]]
prescribed. Physical therapy, hot or cold therapy, or soaking therapy
was considered medical treatment if it was used on a second or
subsequent visit to medical personnel. Treatment of any third or second
degree burn was considered medical treatment. The former rule's lists
provided a useful starting point for determining which treatments were
first aid or medical treatment, but also caused some confusion because,
if a particular treatment was not on either list, the employer was not
sure how to classify the treatment.
Final rule. The final rule defines medical treatment as the
management and care of a patient to combat disease or disorder. For the
purposes of Part 1904, medical treatment does not include: visits to a
physician or other licensed health care professional solely for
observation or counseling; the conduct of diagnostic procedures, such
as x-rays and blood tests, including the administration of prescription
medications used solely for diagnostic purposes (e.g., eye drops to
dilate pupils); or first aid.
The final rule then defines first aid by listing 14 first aid
treatments, such as using non-prescription drugs at non-prescription
strength, using bandages or butterfly bandages, using hot or cold
therapy, using splints or slings to transport an accident victim, and
drinking liquids for relief of heat stress.
Change. The final rule changes the definitions of which treatments
are considered first aid and medical treatment. Each change will result
in some change in the number of cases that are recorded, as shown in
the following table.
------------------------------------------------------------------------
Changes from the former rule to the final Impact on number of cases
rule recorded
------------------------------------------------------------------------
Medical treatment now includes all non- More cases
prescription drugs at prescription
strength and any dose of a prescription
drug.
First aid now includes hot or cold Fewer cases
therapy, regardless of how often applied.
Medical treatment now includes any More cases
physical therapy/chiropractic treatment.
First aid now includes use of butterfly Fewer cases
bandages and Steri-Strips for any purpose.
Medical treatment now includes any use of More cases
oxygen.
Second degree burns are now not Fewer cases
automatically recordable.
------------------------------------------------------------------------
The overall effect of the changes to the definitions of medical
treatment and first aid is difficult to determine. OSHA believes that
they generally offset each other, but data to confirm this are not
available.
(v) Changes in the Recording of Needlestick and Sharps Injuries
Former rule. Under the former rule, an employer was required to
record a needlestick or sharps injury involving human blood or other
potentially infectious material if the case resulted in death, days
away from work, restricted work, medical treatment beyond first aid, or
loss of consciousness, or if the employee seroconverted (contracted HIV
or hepatitis infection).
Final rule. Under the final rule, an employer is required to record
all needlestick or sharps injuries involving human blood or other
potentially infectious material. These cases are recorded as privacy
concern cases.
Change. The final rule will require the recording of an additional
estimated 501,640 needlestick and sharps injury cases. The costs
associated with this change have been quantified in this economic
analysis. This change will also significantly simplify recording for
those employers who recorded 88,925 needlestick and sharps injuries
under the former rule, resulting in cost savings for those cases. These
cost savings have been quantified in this economic analysis.
(vi) Changes in the Recording of Hearing Loss
Former rule. Under OSHA's interpretations of the former rule, an
employer was required to record a hearing loss of 25 decibels in one or
both ears, averaged over three frequencies, compared to the employee's
baseline audiogram. Work-relatedness was presumed if the employee was
exposed to noise at or above an 8-hour time weighted average of 85
decibels.
Final rule. The final rule requires an employer to record any
hearing loss that reaches the level of a standard threshold shift
(STS), defined by the occupational noise standard as a 10 decibel shift
in hearing, averaged over three frequencies, in one or both ears,
compared to the employee's baseline audiogram. Work-relatedness is
presumed if the employee was exposed to noise at or above an 8-hour
time weighted average of 85 decibels.
The employer must check a separate box on the OSHA Log to identify
hearing loss cases.
Change. The additional check box will result in improved
statistical data on occupational hearing loss. The change to a more
sensitive threshold (10 decibel shift rather than 25 decibel shift) for
recording occupational hearing loss will result in the recording of
additional cases. Based on audiometric data collected from 22 companies
in SICs 20 through 29, 33, 34, 35, 39, 49, and 90, OSHA estimated that,
with the new threshold, 250,000 more workers in manufacturing and
25,000 more workers elsewhere in general industry would sustain
recordable hearing loss annually. The costs associated with this
increase have been quantified in this economic analysis.
(vii) Changes in the Recording of Tuberculosis
Former rule. Under OSHA's interpretation of the former rule, an
employer was required to record an active case of tuberculosis (TB) or
a positive TB skin test. If the employee was employed in one of five
high risk industries, as defined by the Centers for Disease Control and
Prevention (CDC), the case was presumed to be work related.
Final rule. Under the final rule, a case of tuberculosis is
recorded if the employee has active TB or has a positive skin test. The
case is considered work-related if the employee has been occupationally
exposed at work to another person (client, patient, co-worker) with a
known, active case of tuberculosis. The employer may subsequently
remove or line out the case if a medical investigation shows that the
case was caused by a non-occupational exposure.
Change. The final rule eliminates the ``special industries''
presumption of work-relatedness. OSHA believes that this change will
reduce the number of recorded TB cases, and thus reduce costs somewhat.
However, data to estimate the cost savings associated with this change
are not available.
(viii) Changes in the Recording of Musculoskeletal Disorders (MSD)
Former rule. Under the former rule, MSD cases were recorded
differently based on whether they were occupational injuries or
occupational illnesses. If the case was an MSD injury, it was recorded
if it resulted in days away from work, restricted work, job transfer,
or medical treatment beyond
[[Page 6086]]
first aid. If the case was an MSD illness, it was recorded if it
resulted in:
(1) Objective findings:
--A diagnosis by a health care provider (carpal tunnel, tendinitis,
etc.)
--Positive test results (Tinel's, Finkelstein's, Phalen's, EMG)
--Signs (redness, swelling, loss of motion, deformity)
OR
(2) Symptoms combined with days away from work, restricted work, or
medical treatment beyond first aid.
Injury MSD cases were considered to be ``new cases'' if they
resulted from new (additional) workplace events or exposures. Illness
MSD cases were treated in the same way or were subjected to a ``30 day
rule'' whereby if an ill employee did not return to the health care
provider for care after 30 days the case was considered resolved. If
the same employee reported later with additional MSD problems, the case
was evaluated for recordability as a new illness.
Final rule. Under the final rule, MSD cases are recorded using the
same criteria as those for other injuries and illnesses. Cases are
recorded if they result in days away from work, restricted work/job
transfer, or medical treatment beyond first aid. Recurrences are also
handled just as other types of injuries and illnesses are.
The employer must check a separate box on the Log for MSD cases to
permit separate data on these disorders to be collected.
Change. The final rule simplifies the recording of MSDs and
collects improved statistical information on these disorders on the 300
Log. Because the final rule does not require the automatic recording of
diagnosed disorders, physical signs, and positive test results, it will
generally require employers to record fewer MSD cases, resulting in
some cost savings. However, the magnitude of these cost savings is not
known.
(d) Change in Ownership
Former rule. Under the former rule an employer who acquired a
business establishment was required to retain the OSHA records of the
prior owner. Each owner was responsible for the records only for that
period of the year that each owned the business.
Final rule. Under the final rule, when a business establishment
changes owners, each owner is responsible for the OSHA records only for
that period of the year that each owned the business. The prior owner
is required to transfer the records to the new owner, and the new owner
is responsible for retaining those records.
Change. The final rule differs from the former rule by requiring
the prior owner to transfer the records to the new owner. Any new costs
imposed by this requirement are extremely small and have not been
quantified in this economic analysis.
(e) Employee Involvement
Former rule. The former rule involved employees in the
recordkeeping process in two ways: through posting of the annual
summary of occupational injuries and illnesses for one month, and by
allowing access to the OSHA 200 Log by employees, former employees, and
their representatives.
Final rule. The final rule involves employees in the process to a
greater extent than formerly: it requires the employer to set up a
system for accepting injury and illness reports from employees and
requires the employer to tell each employee how to report a work-
related injury or illness. The final rule also requires the employer to
post the annual summary for three months. Employees, former employees,
and their representatives have the right to one free copy of the 300
Log, the injured or ill employee or a personal representative has a
right to one free copy of the 301 (Incident Report) for his or her
case, and authorized employee representatives have a right to one free
copy of a portion of the 301 form for all injuries and illnesses at the
establishment he or she represents.
Change. The final rule will improve employee reporting of work-
related injuries and illnesses and allow improved access to the
information in the records, including one free copy of each record
requested. OSHA finds that these provisions will increase costs for
employers, and these costs have been quantified in the economic
analysis.
(f) Privacy Protections
Former rule. The former rule had no provisions to protect the
privacy of injured or ill workers when a coworker or employee
representative was allowed access to the OSHA 200 Log. The employer was
required to provide the Log with names intact.
Final rule. The final rule protects the privacy of injured or ill
workers when a coworker or employee representative accesses the records
by prohibiting the employer from entering the employee's name for
certain ``privacy concern'' cases. A separate, confidential list of
case numbers and employee names must be kept for these cases. An
employee representative can access only part of the information from
the 301 form, and the employer must withhold the remainder of the
information when providing copies. With certain exceptions, if the
employer provides the information to anyone other than a government
representative, an employee, a former employee, or an employee
representative, the names and other personally identifying information
must be removed from the forms. In addition, separation of the summary
form will eliminate accidental disclosure of employee names during the
posting of the summary information.
Change. The final rule protects injured or ill employees' privacy
in several ways, e.g., by limiting the distribution of injured or ill
employees' names, by not recording the employee's name in privacy
concern cases, and by providing employee representatives access to only
part of the Form 301. The costs of keeping a separate, confidential
list for privacy concern cases have been quantified in the economic
analysis.
(g) Computerized and Centralized Records
Former rule. The former rule allowed the employer to keep the OSHA
200 Log on computer equipment or at a location other than the
establishment, and required that the employer have available a copy of
the Log current to within 45 calendar days. The former rule had no
provisions for keeping the OSHA 101 form off site or on computer
equipment.
Final rule. The final rule allows all forms to be kept on computer
equipment or at an alternate location, providing the employer can
produce the data when it is needed to provide access to a government
inspector, employee, or an employee representative. There is no need to
keep records at the establishment at all times.
Change. The final rule provides the employer with greater
flexibility for keeping records on computer equipment and at off-site
locations. These costs savings have been quantified in the economic
analysis.
Reporting of Fatality and Catastrophe Incidents
Former rule. The former rule required the employer to report any
workplace fatality, or any incident involving the hospitalization of 3
or more employees to OSHA within 8 hours.
Final rule. The final rule requires the employer to report any
workplace fatality, or any incident involving the hospitalization of 3
or more employees to OSHA within 8 hours. The final rule does not
require the employer to report to OSHA fatal or multiple
hospitalization incidents that occur on commercial airlines, trains and
buses; or fatality/catastrophe incidents from a
[[Page 6087]]
motor vehicle accident on a public highway.
Change. The final rule requires employers to report fewer incidents
to OSHA, which will result in cost savings. These cost savings have not
been quantified in the economic analysis.
(3) Qualitative Overview of Impacts
Forms
The largest impact of the final rule's revised provisions on
recordkeeping at the individual establishment will be in the direction
of cost savings and will come from the plain language rewriting of the
rule itself and the new forms. These changes in language, organization,
and format will reduce the burden on employers and recordkeepers in
several ways. The clearer language and streamlining will allow the
entire rule to be read more quickly and with greater comprehension. It
will also be possible to obtain a good understanding of the rule in a
single reading (which will be particularly helpful for establishments
with very few or no recordable incidents). Finally, the organization
and format make it far easier to get quick answers to specific
questions, because the answers are part of the final rule itself rather
than being included in a separate document, the Recordkeeping
Guidelines for Occupational Injuries and Illnesses (the ``Blue Book'').
2. Industry Profile
OSHA's former regulation for Recording and Reporting Occupational
Injuries and Illnesses, 29 CFR part 1904, covered most industries in
the economy. The principal exceptions were the finance, insurance, and
real estate sector, some retail trade industries, and some service
industries. This chapter describes the changes in coverage, as well as
key characteristics of the industries that will be covered under the
final rule.
A. Changes in Industries Covered
The former rule (with one exception) covered or exempted industries
at the two-digit SIC level. The final rule fine tunes this coverage in
the finance, insurance, and real estate, retail trade, and service
sectors by extending coverage to some high-hazard three-digit SICs in
two-digit SICs that were not covered by the former rule and exempting
some low-hazard three-digit SICs in two-digit industries that were
covered by the former rule. These changes, by two-digit SICs, are as
follows:
Industries covered under the former rule that would continue to be
covered under the final rule :7\
7 In addition, state and local government employers will
continue to be covered in State Plan states.
---------------------------------------------------------------------------
Agriculture (SIC 01-02),
Forestry, and Fishing (SIC 07-09),
Oil & Gas Extraction (SIC 13),
Sulfur Mining (SIC 1479, part),
Construction (SIC 15-17),
Manufacturing (SIC 20-39),
Transportation (SIC 41-42),
United States Postal Service (SIC 43),
Public Utilities (SIC 44-49),
Wholesale Trade (SIC 50-51),
General Merchandise Stores (SIC 53),
Hotels and Other Lodging Places (SIC 70), and
Automotive Repair, Services, and Parking (SIC 75).
Industries exempted under the former rule that would continue to be
exempted:
Apparel and Accessory Stores (SIC 56),
Eating and Drinking Places (SIC 58),
Depository Institutions (SIC 60),
Nondepository Institutions (SIC 61),
Security and Commodity Brokers (SIC 62),
Insurance Carriers (SIC 63),
Insurance Agents, Brokers, and Services (SIC 64),
Holding and Other Investment Offices (SIC 67),
Motion Pictures (SIC 78),
Legal Services (SIC 81),
Educational Services (SIC 82),
Membership Organizations (SIC 86),
Engineering, Accounting, Research, Management & Related Services (SIC
87), and
Services, not elsewhere classified (SIC 89).
Two-digit industries that were not covered under the former rule
but will have some three-digit industries within them covered under the
final rule:
Automobile Dealers (SIC 55),
Furniture Stores (SIC 57),
Miscellaneous Retail Stores (SIC 59),
Real Estate (SIC 65),
Personal Services (SIC 72),
Business Services (SIC 73),
Social Services (SIC 83), and
Museums (SIC 84).
Two-digit industries that were covered under the former rule but
will have some or all three-digit industries within them exempted under
the final rule:
Building Materials & Garden Supplies (SIC 52),
Food Stores (SIC 54),
Miscellaneous Repair Services (SIC 76),
Amusement and Recreation Services (SIC 79), and
Health Services (SIC 80).
Table X-2 shows the specific three-digit industries that were
formerly exempted and to which the final rule will extend coverage.
Table X-3 shows the specific three-digit industries that were formerly
covered and which the final rule will exempt.
Exempting an industry means that employers with establishments in
that industry do not have to keep the OSHA Form 300 (the Log of
Occupational Injuries and Illnesses), the Annual Summary (OSHA 300-A),
and OSHA Form 301 (the Incident Record) or their equivalents. The final
rule does not exempt establishments from the obligation to report
fatalities or multiple hospitalization accidents to OSHA, nor does it
exempt an employer from the requirement to maintain records if notified
by the Bureau of Labor Statistics that it is a participant in the
annual Occupational Injuries and Illnesses Survey or by OSHA that it
has been selected to report under the OSHA Data Initiative.
B. Characteristics of Covered Establishments
(1) Number of Establishments
Table X-4 shows the estimated number of establishments, by
industry, covered by the final regulation. Data for agriculture (SICs
01 and 02) are taken from the 1997 Census of Agriculture. Data for the
remaining SICs are taken from a compilation of 1996 data by the U.S.
Census Bureau for the Small Business Administration (SBA) to reflect
parent company control of establishments. Firms that have 10 or fewer
employees,8 which are exempt from the final regulation because of
their size, are excluded from Table X-4.
---------------------------------------------------------------------------
8 The SBA data have size classes of 5-9 employees and 10-19
employees. Establishments with 10 employees were assumed to account
for ten percent of the 10-19-employee size class. Since the
distribution is skewed by size, rather than being uniform, this
assumption slightly overstates the number of establishments covered
by the regulation.
[[Page 6088]]
Table X-2.--Formerly Exempt Industries That the Final Recordkeeping Rule
Covers
------------------------------------------------------------------------
Three-digit industry that OSHA's
Two-digit industry* final rule covers
------------------------------------------------------------------------
SIC 55............................. SIC 553, Auto and Home Supply
Stores
SIC 555, Boat Dealers
SIC 556, Recreational Vehicle
Dealers
SIC 57............................. SIC 571, Home Furniture and
Furnishings Stores
SIC 572, Household Appliance Stores
SIC 59............................. SIC 593, Used Merchandise Stores
SIC 596, Nonstore Retailers
SIC 598, Fuel Dealers
SIC 65............................. SIC 651, Real Estate Operators and
Lessors
SIC 655, Subdividers and Developers
SIC 72............................. SIC 721, Laundry, Cleaning, and
Garment Service
SIC 73............................. SIC 734, Services to Buildings
SIC 735, Miscellaneous Equipment
Rental/Leasing
SIC 736, Personnel
SIC 83............................. SIC 833, Job Training and Related
Services
SIC 836, Residential Care
SIC 84............................. SIC 842, Botanical and Zoological
Gardens
------------------------------------------------------------------------
* Only the 3-digit SICs shown in the second column are covered by the
rule; those within the 2-digit SIC that are not listed are still
exempt from the requirement to keep OSHA records routinely.
Table X-3.--Formerly Covered Industries Exempted by the Final Rule
------------------------------------------------------------------------
Three-digit industry that OSHA's
Two-digit industry final rule exempts
------------------------------------------------------------------------
SIC 52............................. SIC 525, Hardware Stores
SIC 54............................. SIC 542, Meat and Fish Markets
SIC 544, Candy, Nut, and
Confectionery Stores
SIC 545, Dairy Product Stores
SIC 546, Retail Bakeries
SIC 549, Miscellaneous Food Stores
SIC 76............................. SIC 764, Reupholstry and Furniture
Repair
SIC 79............................. SIC 791, Dance Studios, Schools,
and Halls
SIC 792, Producers, Orchestras, and
Entertainers
SIC 793, Bowling Centers
SIC 80............................. SIC 801, Offices and Clinics of
Medical Doctors
SIC 802, Offices and Clinics of
Dentists
SIC 803, Offices of Osteopathic
Physicians
SIC 804, Offices of Other Health
Practitioners
SIC 807, Medical and Dental
Laboratories
SIC 809, Health and Allied
Services, nec
------------------------------------------------------------------------
Table X-4--Establishments Required by the Final Rule Routinely To Keep Occupational Injury/Illness Records
----------------------------------------------------------------------------------------------------------------
Estimated number of Estimated number of
Industry establishments establishments required recordable cases
to keep records annually in these
----------------------------------------------------------------------------------------------------------------
Agricultural Production............... SIC 01-02 56,367 46,770
Agricultural Svcs, Forestry, Fishing.. SIC 07-09 16,271 54,022
Oil and Gas Extraction................ SIC 13 5,367 13,851
Construction.......................... SIC 15-17 114,470 415,500
Manufacturing......................... SIC 20-39 196,643 2,060,900
Transportation, Postal, Utilities..... SIC 41-49 157,390 516,653
Wholesale Trade....................... SIC 50-51 219,678 403,240
Building Materials/Garden Supplies.... SIC 52a 22,339 56,091
General Merchandise Stores............ SIC 53 28,519 180,909
Food Stores........................... SIC 54b 64,443 126,780
Automotive Dealers.................... SIC 55c 23,342 22,662
Furniture Stores...................... SIC 57d 25,580 24,302
Miscellaneous Retail Stores........... SIC 59e 19,913 23,750
Real Estate........................... SIC 65f 17,925 22,702
Hotels and Other Lodging Places....... SIC 70 23,956 103,423
Personal Services..................... SIC 72g 14,768 18,072
Business Services..................... SIC 73h 51,525 58,659
Automotive Repair, Svcs, Parking...... SIC 75 41,575 40,359
Miscellaneous Repair Services......... SIC 76i 12,294 17,686
Amusement and Recreation Services..... SIC 79j 20,602 79,623
[[Page 6089]]
Health Services....................... SIC 80k 38,996 995,122l
Social Services....................... SIC 83m 25,998 25,349
Museums............................... SIC 84n 236 2,408
State and Local Government Employers 167,788 519,646
in State Plan States.
-------------------------------------------------
TOTAL: Final Ruleo.............. 1,365,985 5,828,477
-------------------------------------------------
TOTAL: Former Ruleo............. 1,306,418 4,907,081
----------------------------------------------------------------------------------------------------------------
a Consists of Lumber & Other Building Materials (SIC 521); Paint, Glass, & Wallpaper Stores (SIC 523); Retail
Nurseries & Garden Stores (SIC 526); and Mobile Home Dealers (SIC 527).
b Consists of Grocery Stores (SIC 541) and Fruit and Vegetable Markets (SIC 543).
c Consists of Auto and Home Supply Stores (SIC 553); Boat Dealers (SIC 555); and Recreational Vehicle Dealers
(SIC 556).
d Consists of Furniture & Homefurnishings Stores (SIC 571) and Household Appliance Stores (SIC 572).
e Consists of Used Merchandise Stores (SIC 593); Nonstore Retailers (SIC 596); and Fuel Dealers (SIC 598).
f Consists of Real Estate Operators and Lessors (SIC 651) and Subdividers and Developers (SIC 655).
g Consists of Laundry, Cleaning, and Garment Services (SIC 721).
h Consists of Services to Buildings (SIC 734); Miscellaneous Equipment Rental and Leasing (SIC 735); and
Personnel Supply Services (SIC 736).
i Consists of Electrical Repair Shops (SIC 762); Watch, Clock and Jewelry Repair (SIC 763); and Miscellaneous
Repair Shops (SIC 769).
j Consists of Commercial Sports (SIC 794) and Miscellaneous Amusement & Recreation Services (SIC 799).
k Consists of Nursing and Personal Care Facilities (SIC 805); Hospitals (SIC 806); and Home Health Care Services
(SIC 808).
l Includes estimated 501,640 needlesticks and sharps not now recordable that are covered by the final rule.
m Consists of Job Training and Related Services (SIC 833) and Residential Care (SIC 836).
n Consists of Botanical and Zoological Gardens (SIC 842).
o Sulfur mining (part of SIC 1479) is excluded because information is not available.
Sources: U.S. Census Bureau compilation of 1996 establishment and employment data by parent firm, performed for
the Small Business Administration; Bureau of Labor Statistics 1998 Survey of Occupational Injuries and
Illnesses.
The final regulation covers an estimated total of 1,365,985
establishments belonging to 699,712 employers. The number of
establishments covered by the rule represents a net increase of 4.6
percent over the 1,306,418 establishments covered by the former
regulation. This increase in the number of establishments covered
results from the changes made to the scope of the final rule.
(2) Number of Recordable Cases
Table X-4 also shows the number of recordable cases of occupational
injury and illness, by industry, covered by the final regulation. These
are taken from unpublished data from the 1998 BLS Survey of
Occupational Injury and Illness.
The final regulation will annually capture an estimated total of
5,828,477 occupational injury and illness cases. Of these cases,
275,000 represent additional hearing loss cases and 501,640 represent
additional needlestick and sharps injuries anticipated to occur in SIC
80. The needlestick and sharps number represents 85 percent of the
estimated 590,165 needlestick and sharps injuries occurring in SIC 80
(63 FR 48250, September 9, 1998; Ex. 3-172V, Docket No. H370A), since
OSHA estimates that approximately 15 percent of such injuries were
being recorded under the former rule. Since not all of SIC 80 is
covered by the final rule, this figure is likely to overstate the
number of recordable cases to some extent.
Exclusive of the 275,000 additional hearing loss cases and the
501,640 additional needlestick and sharps injuries, the final
regulation will capture an estimated 5,051,837 cases annually. This is
an increase of 3 percent over the 4,907,081 cases captured by the
former rule. This increase in capture reflects changes in the scope of
the rule that are designed to target the regulation more precisely to
high-risk industries in the retail and service sectors of the economy.
This increase in the rule's capture efficiency, or cost-effectiveness,
is reflected by the fact that the industries that are newly covered
under the final rule average 2.6 times as many cases per covered
establishment as the industries the final rule would newly exempt.
3. Costs
A. Overview of the Analysis
(1) Background
This chapter assesses the changes in compliance costs associated
with the changes the Occupational Safety and Health Administration
(OSHA) is making to 29 CFR part 1904, the Agency's Recording and
Reporting Occupational Injuries and Illnesses rule, and its associated
forms and instructions. The analysis relies in part on methodology and
estimates provided in a study conducted for OSHA by Meridian Research,
Inc. The Meridian analysis has been updated to reflect more recent data
as well as changes that OSHA has made to the regulation in the interval
since the Meridian report was prepared, and to reflect comments on the
proposed rule.
The great majority of the establishments covered by the rule are
small, i.e., have fewer than 20 employees. On average, a covered
establishment records 4 occupational injury and illness cases per year,
and the recordkeeping decisions involved in these cases are generally
straightforward and easy to make (e.g., the injuries involve
lacerations, slips and falls, or fractures). Unlike other OSHA rules,
the recordkeeping rule does not require employers to implement
engineering controls, change employee work practices, provide
protective equipment, or take other costly actions to protect their
employees' safety and health. Instead, the costs of this rule are based
on the costs associated with the time the recordkeeper and others spend
in maintaining the records and overseeing the recordkeeping system.
OSHA's estimates of the time necessary to perform each step of the
recordkeeping process, including the time to consider and record each
case, maintain the Log, and perform other recordkeeping tasks, have
been reviewed and commented on
[[Page 6090]]
by the public and approved by the Office of Management and Budget in
connection with the process required by the Paperwork Reduction Act of
1995. Even if OSHA's estimates of the time involved in making,
determining, and overseeing the records involved in the recordkeeping
system are low, for example, by a factor of two or so, the costs
imposed by the final rule are low in comparison with the benefits of
the system and are readily affordable by covered establishments. (See
the Impacts section of this economic analysis.)
Because the final regulation makes a number of changes, some of
which increase the amount of information employers must maintain and
others that simplify recordkeeping and reduce the burden, it is
difficult to estimate the precise impact of a given change on
establishments in particular industries. Moreover, most individual
changes have only a minor impact on burdens, whether positive or
negative. Accordingly, the analysis groups together changes to a
specific portion of the recordkeeping activities, such as maintaining
the Log or filling out the individual report of injury, and (for the
most part) assesses the net impact of the group of provisions, rather
than the impact of each provision individually.
The analysis reflects the fact that the final regulation is a
revision of a former regulation. Thus many of the impacts are changes
in the burden of doing something that is already required. Wherever
this is the case, the burden under the former and final regulations
will be the same if the activities are unchanged. In addition, small
changes in burden estimates, both positive and negative, may offset
each other.
(2) Analytical Approach
Scope. The costs of the final rule depend in part on the scope of
the rule, i.e., on the industries that are covered. As noted in Chapter
II, affected industries fall into three groups, depending on their
inclusion or exemption under the former and final rules. Impacts differ
for each of these three groups:
--For industries covered under the former rule and the final rule,
impacts are the costs employers will incur to comply with changes made
in a regulatory provision.
--For industries covered by the former rule but exempted under the
final rule, impacts consist of cost savings equal to the cost of
compliance employers incurred under the former rule.
--For industries exempted under the former rule but covered by the
final rule, impacts are the total cost of compliance employers will
incur under the final rule.
In examining the costs of this rule, it is critical to remember
certain basic characteristics of affected facilities. On average,
facilities subject to recordkeeping have about 50 employees and record
about four injuries and illnesses a year. Because the size distribution
of facilities is somewhat skewed, the majority of establishments record
fewer than four injuries and illnesses a year and have fewer than 20
employees. Some commenters appeared to be unaware of the small number
of injuries and illnesses recorded by the typical affected
establishment when commenting on the proposal. For example, the comment
of one commenter that the typical establishment will need to train 2 to
4 recordkeepers (Ex. 15-375) is clearly not reasonable because the
typical establishment covered by this rule employs about 50 employees
and records a total of four injuries and illnesses a year.
The impacts of changes in specific regulatory provisions are
generally related to one of two factors:
Costs that are essentially fixed costs for an
establishment are estimated on a per-establishment basis and multiplied
by the number of affected establishments.
Costs that vary with the number of cases recorded are
estimated on a per-case-recorded basis and multiplied by the number of
such cases recorded.
Other Parameters. Burdens are estimated as number of minutes (per
establishment or per case) to comply with each provision. Most of the
costs are based on the assumption that recordkeeping tasks will be
conducted by someone with the skill level of a personnel specialist who
would be qualified both to obtain and to enter the necessary data. The
wage rate for a Personnel Training and Labor Relations Specialist--
$19.03, or $26.32 including fringe benefits 9--is used for this cost.
Where the time of a company official is called upon, the estimated
labor cost is based on the hourly rate for an Industrial Production
Manager--$26.38, or $36.48 including fringe benefits.
---------------------------------------------------------------------------
9 Benefits and overhead are computed at 38.3 percent of the
hourly wage.
---------------------------------------------------------------------------
Cost estimates for many specific tasks are also influenced by the
fact that almost all establishments will also have to gather
information on work-related injuries and illnesses for insurance and
workers' compensation purposes. In many cases, the data that employers
must collect and provide for these purposes are considerably more
detailed than those required by OSHA. Even OSHA recordable injuries and
illnesses that turn out, in the end, not to be workers' compensation
claims are likely to be investigated to determine their status in
relation to the workers' compensation system. As a result, much of the
basic data gathering necessary to the recording of injuries and
illnesses has already been done independent of the OSHA recordkeeping
requirements, and, in most cases, making the OSHA record simply
involves copying information from other sources to the OSHA form.
(3) Overview of Estimates
The estimated net impact of the revisions to the recordkeeping rule
is a cost of $38.6 million per year. Estimated net costs for
establishments covered by the former rule that will continue to be
covered by the final rule are relatively minor, and the estimated
119,720 establishments that OSHA has exempted from the final rule will
incur substantial savings. The chief cost increases will be to the
179,287 establishments brought under the scope of OSHA's recordkeeping
rule for the first time.
B. Initial Costs of Learning the Recordkeeping System
(1) Initial Costs to Establishments Already Covered of Becoming
Familiar With the Revised Recordkeeping System
Recordkeepers in establishments that were covered by the former
regulation and that will continue to be covered under the final
regulation will need to become familiar with the changes in the
recordkeeping system associated with the final rule even before an
injury or illness occurs. OSHA originally estimated that this initial
familiarization would require 15 minutes per such establishment. Some
commenters objected to this estimate as too low. (See, for example,
Exs. 15: 119, 15: 357, 15: 375, 15: 395.) For example, one commenter
(Ex. 15: 395) stated that ``No person could give even a superficial
reading to this material [the proposed rule] in 15 minutes.'' Another
commenter (Ex. 15: 375) stated that this was ``not enough time for one
person to even read through the rule and the preamble one time.'' OSHA
does not believe that experienced recordkeepers will need to read the
entire preamble, or even the entire rule, in order to familiarize
themselves with the new recordkeeping changes. For the most part, the
new system continues the concepts, practices, and interpretations
developed under the former rule and
[[Page 6091]]
thus is well known to recordkeepers. OSHA believes that most
recordkeepers will avail themselves of the summaries of the changes in
the rule provided by OSHA or by a wide variety of other sources. The
recordkeepers' thorough knowledge of the recordkeeping system will
suffice to cover most aspects of the rule. Nor does OSHA agree that the
typical recordkeeper, who needs to record only 4 injuries and/or
illnesses a year, needs to study every change. For example, a
recordkeeper relying on OSHA's summary information on the differences
between the former and the revised rule only needs to make a mental
note to the effect that injuries and illnesses occurring in parking
lots are treated differently under the revised rule, but would not have
to know the details of the changes until (if ever) the recordkeeper
actually has an injury or illness that occurred in a parking lot.
Nevertheless, as a result of the comments received on the prior
proposed time estimates, OSHA has raised its familiarization estimate
to 20 minutes per establishment for facilities with prior OSHA
recordkeeping experience. This estimate covers the time needed for an
experienced recordkeeper to learn the basics of the new system, but
assumes that such a recordkeeper, who records an average of four cases
per year, need not learn the details of the system for dealing with
unusual cases until, and if, they arise; instead, this recordkeeper is
assumed to examine specific issues later and as needed, when issues
arise in the course of the recording of actual cases. The time
attributed in this analysis to the recording of individual cases
(discussed below) includes the time needed to understand the details of
the individual case. It is assumed that this subsequent learning will
occur as recordkeepers enter the data; that is, the time that OSHA
estimates will be initially required to complete both Form 300 and Form
301 entries includes the time that the Agency estimates will be needed
for additional familiarization with issues related to the entry being
made. The costs for this subsequent recording activity are discussed in
Part D of this section of the economic analysis. The initial
familiarization cost is a one-time cost that will not recur.
Accordingly, this cost was annualized over ten years using a 7 percent
discount rate. The net annualized costs of this initial familiarization
activity are $1,482,384.10\
---------------------------------------------------------------------------
10 $1,482,384 = (1,186,698 Establishments) x (20 Minutes/
Establishment) x ($26.32/Hr.) x [0.07/(1-(1/(1.07)
10))]
---------------------------------------------------------------------------
(2) Costs of Learning the Basics of the Recordkeeping System De Novo
Establishments required to keep OSHA records will incur the costs
associated with learning about the recordkeeping system from scratch
whenever a new person takes over the recordkeeping job as a result of
staff turnover. OSHA assumes that 20 percent of covered establishments
will experience such staff turnover in any given year. Establishments
that are newly covered by the regulation will also incur the costs of
learning the recordkeeping system de novo. Establishments that are
newly exempted under the regulation, of course, will save the staff
turnover costs formerly associated with recordkeeping.
At the time of the proposal, OSHA estimated that, under the former
regulation, new personnel would require a 30-minute orientation to
learn the basics of the recordkeeping system and 25 minutes to learn
the newer, simpler recordkeeping system. Many commenters believed that
these estimates were too low. (See, for example, Exs. 15: 119, 15: 170,
15: 357, 15: 375.) After reviewing the record, OSHA agrees that the
estimates in the Preliminary Economic Analysis did not adequately
capture the average amount of time required to learn the system for a
person without previous knowledge of OSHA recordkeeping. OSHA has
revised its average estimate of the time for learning the new
recordkeeping system de novo to one hour and has revised the average
estimate of the time it would have taken a recordkeeper to learn the
previous recordkeeping system to 1.5 hours. (In other words, OSHA
believes that its prior estimate of the average amount of time required
to learn the former recordkeeping system--30 minutes--was too low.)
Although OSHA's revised average estimates are lower than the
estimates made by some commenters, OSHA believes that the Agency's
estimates appropriately reflect the average amount of time new
recordkeepers will need to learn the basics of the system. Again, new
recordkeepers are assumed not to learn all the details of the new
system up front, such as exactly when an off-site injury is considered
work-related or how to classify injuries occurring in lunch rooms,
until such a case actually arises in the workplace. Since unusual cases
and those falling within the exceptions are relatively rare,
recordkeepers will generally choose to obtain detailed case-specific
information only when it is needed. New recordkeepers need only to know
that such exceptions exist and that further study of the rule will be
necessary in the relatively unlikely event that such an injury or
illness occurs. OSHA's estimates of the time required to record each
case (discussed further below) include the time for the recordkeeper to
study the instructions to learn how to address specific issues that may
arise when recording specific types of injuries or illnesses (e.g.,
noise-induced hearing loss or work-related TB cases).
OSHA believes that the new system is much simpler than the old.
Many simplifications, e.g., the use of calendar days, capping of days
away cases, have been made to the rule to save effort. This additional
simplicity, as well as improved outreach materials to explain the new
regulation, will, OSHA believes, result in significantly reducing the
length of time required to learn the system. OSHA estimates that
learning the basics will take, on average, one hour. This will save 30
minutes compared to the learning time that would have been required for
the former system.
Continuously Covered Establishments. Establishments that were
covered under the former regulation and continue to be covered under
the final regulation will save 30 minutes, compared with the time
needed under the former rule, whenever staff turnover requires a new
recordkeeper. At a 20 percent turnover rate, the net annualized
savings for this learning activity under the final rule are
$3,123,394.11\
---------------------------------------------------------------------------
11 $3,123,394 = (1,186,698 Establishments) x (0.2) x (30
Minutes/Establishment) x ($26.32/Hour)
---------------------------------------------------------------------------
Newly Exempted Establishments. Establishments that were covered
under the former regulation but are exempted under the final
regulation will incur a saving of 90 minutes whenever staff turnover
would have required a new recordkeeper. At a 20 percent turnover
rate, the net annualized savings of eliminating the need for this
learning activity are $945,309.12\
---------------------------------------------------------------------------
12 $945,309 = (119,720 Establishments) x (0.2) x (90
Minutes/Establishment) x ($26.32/Hour)
---------------------------------------------------------------------------
Newly Covered Establishments. Establishments that were exempt
under the former regulation but are covered under the final
regulation will incur two types of costs: All establishments will
incur an initial learning cost of one hour per establishment. Since
this is a one-time cost that will not recur, the cost was annualized
over ten years using a 7 percent discount rate. In addition, these
establishments will incur an ongoing cost of 60 minutes whenever
staff turnover requires a new recordkeeper to become familiar with
the system. The net annualized costs of this learning activity are
$671,856 + $943,756 = $1,615,612.13\
---------------------------------------------------------------------------
13 $1,615,612 = (179,287 Establishments) x (60 Minutes/
Establishment) x ($26.32/Hour) x [0.07/(1-(1/(1.07)
10))] + (179,287 Establishments) x (0.2) x (60
Minutes/Establishment) x ($26.32/Hour)
---------------------------------------------------------------------------
[[Page 6092]]
(3) Total Cost Impact
Table X-5 summarizes the total annualized cost impacts of
initially learning the recordkeeping system under the final
regulation. The total net annualized impact is estimated to be a
saving of $970,757.
C. Fixed Costs of Recordkeeping
A number of the cost items associated with the final rule do not
vary with the size of the establishment or the number of cases
reported. These include the costs of setting up the Log, posting the
Summary, certifying the Summary, and providing data from the Log to
OSHA inspectors. Impacts in this category are related to the number
of establishments covered and the specific changes in recordkeeping
requirements.
TABLE X-5--Familiarization Costs Associated With the Final Rule
----------------------------------------------------------------------------------------------------------------
Change in level of
Estimated effort
Cost element/industry status under the final rule number of --------------------------- Total cost
establishments (Minutes) Hours
----------------------------------------------------------------------------------------------------------------
Shift to the New Recordkeeping System:
Formerly & Still Covered......................... 1,186,698 20 395,566 a,b$1,482,384
Initally Learn the Basics of the Recordkeeping
System:
Newly Covered.................................... 179,287 60 179,287 a,b671,856
Re-learn the Basics of the Recordkeeping System:
Formerly & Still Covered......................... 237,340 -30 -118,670 a-3,123,394
Newly Exempted................................... 23,944 -90 -35,916 a-945,309
Newly Covered.................................... 35,857 60 35,857 a943,756
----------------------------------------------------------
Total Annual Cost............................ .............. ......... c456,124 970,757
----------------------------------------------------------------------------------------------------------------
a Based on an hourly cost of $26.32.
b One-time cost that is annualized over 10 years at a discount rate of 7 percent.
c Includes 574,853 hours that will be required in the first year only.
(1) Setting Up the Log and Posting the Summary
Both the former rule and the final rule require that the Log be
set up at the beginning of the year and that the Annual Summary be
posted on February 1 of the year following the year to which the
data pertain. The final regulation requires that the Summary remain
posted for three months, while the former regulation required that
it remain posted for only one month.
OSHA estimates that the process of setting up the Log and
filling out and posting the Summary under the former regulation
required 8 minutes. OSHA has no reason to believe that this burden
will change as a result of the final rule. Most of the concern
expressed in the comments on the proposed recordkeeping rule related
to the burden commenters perceived to be associated with updating
the posted Summary form when revisions were made and mailing out the
Summary as an alternative to posting (see, e.g., Exs. 15: 288, 303,
395). Updating the posted Summary was never OSHA's intent, and the
final rule has dropped the mailing alternative, so that both of
these concerns are now moot. Any possible increase in burden due to
the longer posting periods for the Summary (posting for 3 months
rather than 1 month) should be offset by greater simplicity in
keeping the Log using the new forms.
The final rule's changes in posting requirements will have no
impact on establishments that were covered under the former rule and
will be covered under the final rule. Establishments that are newly
exempted by the final rule will have an annual savings of 8 minutes
each, however. Establishments that are newly covered will incur an
annual cost of 8 minutes each. The total estimated impact of these
changes in scope is a net cost of -$420,146 + $629,180 =
$209,034.14\
---------------------------------------------------------------------------
14 $209,034 = (-119,720 + 179,287 Establishments) x (8
Minutes/Establishment) x ($26.32/Hour)
---------------------------------------------------------------------------
(2) The Annual Summary
The final rule adds a requirement for employers to record on the
Log Summary the average number of employees working in the
establishment over the past year and the total hours worked by all
employees during that year. OSHA initially estimated that recording
these data on the Summary would add 5 minutes of labor per
establishment to the cost of maintaining each Log. Many commenters
noted that this step might be difficult, and some stated that it
might be more time consuming than estimated. (See, e.g., Ex. 15:
170.) One commenter stated that this information was sufficiently
valuable for management purposes that firms would benefit from
having the data if they did not already compile these data (Ex. 15:
395). The commenters who argued that this requirement would be
burdensome were generally large multi-establishment firms (see,
e.g., Exs. 15: 218, 15: 423). Since OSHA's estimate of this cost is
per establishment, these firms would indeed bear higher costs. OSHA
does not believe that this requirement will necessitate
modifications to data systems for the vast majority of firms;
finding where the data are on existing systems should suffice. OSHA
also believes that the final rule has clarified that the average
number of employees and hours worked need not be precise and can
simply be an estimate, which should reduce the amount of effort
required to generate this number. The Agency thus finds that this
procedure will be relatively simple for most single-establishment
firms that maintain personnel records that already have this
information for a variety of other purposes. However, OSHA also
recognizes that firms with more than one establishment may keep this
information only on a firm, not establishment, basis, and may need
to perform calculations to compile or revise the data available from
their management systems. To account for this, OSHA has raised its
average estimate of the time required for the additional information
to 20 minutes.
This burden is estimated to fall on all establishments covered
by the rule, but not on newly exempted establishments. The total
estimated cost of this additional data requirement is $10,411,297 +
$1,572,936 = $11,984,233.15\
---------------------------------------------------------------------------
15 $11,984,233 = (1,186,698 + 179,287 Establishments) x (20
Minutes/Establishment) x ($26.32/Hour)
---------------------------------------------------------------------------
The former rule required the recordkeeper to certify that the
entries on the Summary were true, accurate, and complete. The final
rule requires a company executive to certify that he or she has
examined this document and ``reasonably believes, based on his or
her knowledge of the process by which the information was recorded,
that the annual summary is correct and complete.''
OSHA estimated, at the time of the proposal, that the former
requirement that the recordkeeper certify the Summary cost an
average of 2 minutes, because all the recordkeeper had to do was
sign the form. The final rule drops the requirement for recordkeeper
certification.
Having the Summary certified by a company executive was
estimated at the time of the proposal to require only 5 minutes.16
OSHA now estimates that certification by a
[[Page 6093]]
company executive will require 30 minutes, because the Agency
believes that the company executive will briefly review the records,
perhaps speak with the recordkeeper, and generally take whatever
steps are necessary to assure himself/herself that the records are
accurate. Although, as noted above, the typical firm covered by the
rule only records 4 cases per year and these cases are generally
straightforward, OSHA believes that the certifying executive will
need this amount of time, on average, to perform this task
thoughtfully. Again, this estimate is an average estimate--it will
take longer for some very large firms and less time for small firms.
Estimated impacts on the different classes of establishments are as
follows:
16 The proposal would have replaced certification by the
recordkeeper with certification by a plant manager. Many commenters
stated that this would have required the plant to become personally
familiar with the information being certified, and that this would
have entailed considerably more time than 5 minutes (see, e.g., Exs.
15-9, 15-355, 15-428, 15-395).
---------------------------------------------------------------------------
Continuously Covered Establishments. Establishments that were
covered by the former rule and will be covered by the final
regulation will save the costs for certification by the
recordkeeper, but will incur new costs for certification by a
responsible company official. This change in requirements results in
an estimated total annual cost of $20,604,232.17\
---------------------------------------------------------------------------
17 $20,604,232=(1,186,698 Establishments) x (-2 Minutes/
Establishment) x ($26.32/Hour) + (30 Minutes/Establishment) x
($36.48/Hour)
---------------------------------------------------------------------------
Newly Exempted Establishments. Establishments that were covered
by the former regulation but are exempted from the final regulation
will realize a cost saving of 2 minutes of recordkeeper time. The
estimated total annual savings will be $105,043.18\
---------------------------------------------------------------------------
18 $105,043=(119,720 Establishments) x (2 Minutes/
Establishment) x ($26.32/Hour)
---------------------------------------------------------------------------
Newly Covered Establishments. Establishments that were exempt
under the former regulation but are covered by the final regulation
will incur costs of 30 minutes of company official time. The total
annual cost is estimated to be $3,270,213.19\
---------------------------------------------------------------------------
19 $3,270,213=(179,287 Establishments) x (30 Minutes/
Establishment) x ($36.28/Hour)
The total impact of the final rule's certification requirement is
estimated to be $23,769,204.
(3) Provision of Data to OSHA Inspectors
Like the former rule, the final rule requires employers to provide
the Log and Incident Reports to an OSHA inspector during a compliance
visit. Employers are now required by the final rule to provide a copy
of these forms to the inspector on request. OSHA believes that
providing copies has in fact been the practice in the past, even though
the former rule did not spell this out specifically. OSHA thus does not
believe that this small change in the regulation will result in burdens
or costs for employers.
(4) Informing Employees How To Report Occupational Injuries and
Illnesses
The final regulation requires employers to set up a way for
employees to report work-related injuries and illnesses and inform
employees about the approach they have chosen. OSHA assumes that it
will take a Personnel Training and Labor Relations Specialist (or
equivalent) at each establishment an average of twenty minutes to
decide on a system and inform employees of it. The ``way'' will usually
simply involve directing supervisors to inform their subordinates, as
part of their usual communication with them, to report work-related
injuries and illnesses to their supervisor. Most, if not all,
establishments require employees routinely to report problems of any
kind to their supervisors, and reporting injuries and illnesses is
simply one of the kinds of things employees report. OSHA believes there
will be no additional cost associated with the supervisors' forwarding
of these reports to the person in charge of recordkeeping, because this
is already part of supervisors' duties. This is a one-time cost, which
OSHA has annualized over ten years using a 7 percent discount rate. The
net annualized costs of setting up the system are $1,706,285.20\
---------------------------------------------------------------------------
20 $1,706,285=(1,365,985 Establishment) x (20 Minutes/
Establishment) x ($26.32/Hr.) x [0.07/(1-(1/
(1.07)10))]
---------------------------------------------------------------------------
(5) Total Cost Impact
Table X-6 summarizes the total annualized cost impacts of fixed,
establishment-level costs resulting from the final regulation. The
total net annualized costs are estimated to be $37,668,954.
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D. Costs of Maintaining Records
The costs of maintaining the Log and Incident Reports are related
to the number of cases recorded. There are numerous changes to the
final rule that result in very small increases or decreases in the
number of cases that will need to be recorded. With two exceptions,
OSHA concludes that the average establishment keeping records under
both the former rule and the final rule will experience an overall
decrease in the number of occupational injury and illness cases entered
into its OSHA records. These decreases will result from the addition of
several exemptions to the presumption of work-relatedness for cases
occurring in the work environment and from definitional changes (e.g.,
medical treatment, first aid, restricted work, aggravation) that will
make fewer cases recordable. However, for this analysis, OSHA makes the
conservative assumption that these will net out to a zero change. This
assumption means that the costs presented in this economic analysis are
somewhat overstated.
The two exceptions to the overall decrease in the number of cases
recorded are the result of the change to a more sensitive standard
threshold shift for recording hearing loss, which will increase the
number of cases in all industries except construction, and the new
requirement to record needlesticks and sharps injuries, which will
result in a relatively large increase in the number of cases recorded
in SIC 80.
The costs for SIC 80 are analyzed separately. The analysis uses the
following classes of industries:
For industries covered by the former regulation and now covered by
the new regulation, except for SIC 80, OSHA assumes that the number of
needlestick cases recorded will essentially be unchanged by the final
regulation.
For industries (except in SIC 80) covered by the former regulation,
but exempted under the final regulation, recorded cases will fall to
zero, resulting in commensurate savings.
For industries exempted under the former regulation but covered by
the final regulation, the impact will be the full cost of recording
such cases.
In SIC 80, recorded cases in three-digit industries that are
newly exempted (see Table X-3) will fall to zero, resulting in
commensurate savings. The industries that will continue to be
covered (SIC 805, Nursing and Personal Care Facilities, SIC 806,
Hospitals, and SIC 808, Home Health Care Services) will bear the
full cost of recording the expected increase in needlesticks and
sharps cases. This increase in cases will be analyzed in the same
manner as cases in newly covered industries.
(1) Impacts on Costs of the Final Rule's Changes in Scope
The changes in the scope of the final rule's industry coverage will
bring commensurate changes in the costs of the regulation. OSHA
estimates that, under the former regulation, it required an average of
15 minutes per recorded case to maintain the Log, plus 20 minutes to
fill out a 101 form, for those employers who did not use an equivalent
form.
The addition of new elements to Form 301, as will be described
shortly, raises OSHA's estimate of the total time required to fill out
an individual report of injury or illness to 22 minutes. Based on data
collected during approximately 400 recordkeeping audit inspections,
OSHA assumes that 82 percent of incidents will be recorded on forms
other than the new Form 301, such as workers' compensation forms.
The average for the Log takes into account a wide range of cases.
For clearly work-related injuries involving an absence of 10 work days
and involving no additional restricted time, for example, essentially
all of the necessary information can be obtained from workers'
compensation-related files. In such a case, entering the data on the
Log will simply require pulling the workers' compensation file and
entering the key information on the Log--a three minute task. OSHA
assumes that the time required to make an entry will increase when
either (1) information is not already kept for other purposes, or (2)
making the entry requires the recordkeeper to study the regulation.
Examples of situations where the necessary information would not
already have been recorded elsewhere are cases that are not recorded as
workers' compensation cases, or cases involving restricted work days
(which are not recorded in workers' compensation data and may not be
part of the affected worker's payroll or personnel files). Examples of
situations where it would be necessary to study the regulation are
those involving questions about the recordability of the incident or
its work-relatedness. Changes in scope will have different impacts on
the different classes of industries, as follows:
Continuously Covered Establishments. By definition,
establishments in industries formerly covered and still covered by
the final regulation will have no changes in costs related to
industry scope.
Newly Exempted Establishments. Establishments that were
covered by the former regulation but are exempt from the final
regulation will realize for each currently recorded case a cost
saving of 15 minutes for the Log entry plus, for 18% of the cases, a
saving of 20 minutes for the 301 form. The estimated total annual
savings will be $405,499.21\
---------------------------------------------------------------------------
21 $405,499 = ((49,698 Cases) x (15 Minutes/Case) + (8,946
Cases) x (20 Minutes/Case)) x ($26.32/Hours).
---------------------------------------------------------------------------
Newly Covered Establishments. Establishments that were
exempt under the former regulation but are covered by the final
regulation will incur for each currently recorded case costs of 15
minutes for the Log entry plus, for 18% of the cases, 22 minutes for
the 301 form. The total annual cost is estimated to be
$1,646,000.22\
---------------------------------------------------------------------------
22 $1,646,000 = ((197,904 Cases) x (15 Minutes/Case) +
($35.623 Cases) x (22 Minutes/Case)) x ($26.32/Hours).
---------------------------------------------------------------------------
Additional Hearing Loss Cases. Establishments will
incur for each additional hearing loss case costs of 15 minutes for
the Log entry plus, for 18% of the cases, 22 minutes for the 301
form, or an estimated total annual cost of $2,287,208.23\
---------------------------------------------------------------------------
23 $2,287,208 = (275,000 Cases) x (15 Minutes/Case) x
($26.32/Hour) + (49,500 Cases) x (22 Minutes/Case)) x ($26.32/
Hour).
---------------------------------------------------------------------------
SIC 80. Establishments in SIC 80 will incur for each
additional needlesticks and sharps case costs of 5 minutes for the
Log entry 24 plus, for 18% of the cases, 22 minutes for the 301
form, or an estimated total annual cost of $1,971,664.25\
---------------------------------------------------------------------------
24 Under the simplified criteria of the final rule,
needlesticks and sharps cases are among the very easiest cases to
document and record.
25 $1,971,664 = ((501,640 Cases) x (5 Minutes/Case) +
(90,295 Cases) x (22 Minutes/Case)) x ($26.32/Hour).
(The costs of the ``log of percutaneous injuries from contaminated
sharps'' specified in the revision of the Bloodborne Pathogens standard
in conformance with the requirements of the Needlestick Safety and
Prevention Act have been captured in the analysis of that rule. No
offset has been taken in the economic analysis of this rule for costs
common to these two rules for recording needlestick injuries.)
The estimated total cost impact related to changes in scope of the
recordkeeping rule is $5,499,373.
(2) Maintenance of the Log
Form 300 will replace Form 200 as the Log of injuries and
illnesses. The revisions to this form represent the greatest source of
cost savings to employers required to record work-related injuries and
illnesses. The major modifications that result in time and cost savings
are simplifications of Form 300 and changes and simplifications in the
criteria for recordable cases.
Simplification of the Log. Compared to the form that it will
replace, Form 300 has a more logical progression, makes available
considerably more space, and eliminates unnecessary columns. OSHA
estimates that this will take an average of one minute off the time
required to record cases (except for
[[Page 6096]]
those that involve needlesticks or sharps, which will be analyzed
separately in this analysis). This simplification of the Log will
produce a saving of $2,177,240.26\
---------------------------------------------------------------------------
26 $2,177,240 = (4,963,312 Cases) x (1 Minute/Case) x
($26.32/Hour).
---------------------------------------------------------------------------
Simplification of Decisionmaking about Recordability. In estimating
the savings in time associated with the simplification of recordability
decisionmaking, OSHA focused primarily on the simplification of the
steps needed to determine whether an injury or illness is serious
enough to be recorded. When a work-related injury or illness results in
days away from work or restricted workdays, then it is obvious under
both the former and final regulations that the injury or illness must
be recorded. Under the former regulation, however, the employer was
required to consult several paragraphs of the Recordkeeping Guidelines
to determine whether an injury that did not result in lost or
restricted workdays would need to be counted. The final regulation will
allow the employer to settle the issue quickly by looking at the list
of first aid treatments in Section 1904.7(b)(4).
Of the cases in the 1998 BLS Survey of Occupational Injury and
Illness that did not involve needlesticks or sharps, 52.34 percent did
not involve lost or restricted workdays. In addition to the one minute
saved for each case because of the forms simplification discussed on
the previous page, OSHA estimates that the simplification of
recordability decisionmaking under the final rule will save
approximately 2 minutes for each such injury or illness case. Applying
this unit cost saving to all industries covered by the final rule
produces estimated total savings of $2,279,080.27\
---------------------------------------------------------------------------
27 $2,279,080 = (2,597,736 Cases) x (2 Minutes/Case) x
($26.32/Hour).
---------------------------------------------------------------------------
Under the final rule there will no longer be any need to examine in
any detail the recordability of any cases involving needlesticks or
sharps, since all such cases will have to be recorded. OSHA estimates
that the average time required to record such cases will change from 15
minutes under the former rule to 5 minutes under the final rule. This
would save covered establishments in SIC 80 an estimated $388,329.28\
---------------------------------------------------------------------------
28 $388,329 = (88,525 Cases) x (10 Minutes/Case) x
($26.32/Hour).
---------------------------------------------------------------------------
OSHA has also clarified the requirement to record medical removal
cases by stating in the regulatory text that any case involving medical
removal required by an OSHA health standard must be recorded as a case
involving days away from work or restricted work/job transfer (as
appropriate). OSHA had interpreted the former rule to have the same
effect, but the former regulatory text did not clearly state the
requirement. This clarification makes overall compliance with OSHA's
rules simpler, because both the recordkeeping rule and the OSHA
standards will rely on the same criteria, such as biological monitoring
test results, employers' determinations, and physician's opinions, and
the recording requirements are clearly stated in the regulatory text.
Under the final rule, days away from work and days of restricted
work will be counted by calendar days rather than according to
scheduled work days. One commenter (Ex. 57X, pp. 97-101, 117-118)
argued that, in the automobile manufacturing industry alone, this could
free up $5,000,000 to $6,000,000 worth of human resources per year for
more productive uses of time. However, OSHA has not taken cost savings
for this change because no data in the record suggest that the
projections for this industry will be typical of other industries.
Privacy Concern Cases. The final rule requires maintenance of a
separate, confidential list of case numbers and employee names for
``privacy concern cases,'' so that an employee's name does not appear
on the Form 300. Privacy concern cases include injury or illness to an
intimate body part or the reproductive system; injury or illness
resulting from a sexual assault; mental illness; HIV infection,
hepatitis, or tuberculosis; needlesticks and sharps injuries; and other
illnesses (except MSD illnesses) that the employee requests be treated
as a privacy concern case.
In 1997 BLS estimated that there were 621 days away from work cases
involving the reproductive tract, 18 rapes, 5,542 mental disorders, and
no hepatitis cases. (Data are available at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.bls.gov.) In 1997, OSHA
estimated that there were approximately 34,630 occupational TB
infections annually. It appears that TB cases have declined somewhat
since then, but OSHA uses this number in this analysis as a
conservative estimate.
The time to record HIV infection cases is included in the estimate
of the time associated with recording 590,165 needlestick and sharps
cases, but each of these cases will also require time for making an
entry in the confidential list of case numbers and employee names. OSHA
also assumes that employees in 10,000 other illness cases will ask that
their names not appear on the Form 300.
OSHA estimates that it will take an average of 3 minutes to record
each ``privacy concern case'' on the required separate, confidential
list of case numbers and employee names. The estimated annual cost of
this provision is thus $843,524.29\
---------------------------------------------------------------------------
29 $843,524 = (640,976 Cases) x (3 Minutes/Case) x
($26.32/Hour).
---------------------------------------------------------------------------
(3) Maintenance of Individual Reports of Injury and Illness
The final regulation substitutes the new Form 301 for the former
Form 101 and provides other options.
New Elements on Individual Reports. The new form requires employers
to record such additional items as the injured or ill employee's date
of hire, emergency room visits, the starting time of the employee's
shift, and time of the accident. OSHA estimates that these additional
elements will raise time required to fill out an individual report of
injury or illness from 20 minutes for the old Form 101 to 22 minutes
for the new Form 301. This change will cost employers in industries
formerly covered and still covered by the final regulation an estimated
$889,169.30\
---------------------------------------------------------------------------
30 $889,169 = (1,013,503 Cases) x (2 Minutes/Case) x
($26.32/Hour).
---------------------------------------------------------------------------
Changes that will reduce burden include:
An option to keep Form 301s off-site; and
An option to keep Form 301s on electronic media.
Keeping Form 301s Off-site. Keeping Form 301s off-site will provide
the greatest cost savings to small, isolated establishments that are
owned by larger firms that already keep personnel data at headquarters
or at another site. For such firms, OSHA estimates that the ability to
maintain records off-site could save as much as 5 minutes per record.
These savings in time and effort would result from reductions in the
amount of time necessary to copy the Form 301 at headquarters, send it
to the small establishment, receive it there, and file it. There would
also be a saving in postage. Under the final rule, such small
establishments would have to go through all of these steps only when an
inspection occurred. Even if only 2 percent of the estimated recordable
cases in establishments that are covered under the final regulation
were affected by this provision (which OSHA believes is likely to be an
underestimate), the resulting cost savings would be $294,141.31\
---------------------------------------------------------------------------
31 $294,141 = (5,630,573 Cases) x (0.02) x [(5 Minutes/
Case) x ($26.32/Hour) + ($0.33/Case)].
---------------------------------------------------------------------------
Storing Form 301s on Electronic Media. The final rule permits
employers to store Form 301s on electronic media, provided that they
are able to produce the records in hard copy within four
[[Page 6097]]
hours of a request by a government representative permitted access
under the regulation. OSHA estimated that electronic storage would be
advantageous for establishments that handle more than 100 cases per
year. OSHA used as a proxy variable for this number the number of
establishments with 1,000 or more employees. In the 1998 BLS survey,
establishments in this size category had a total of 899,700 recordable
cases. OSHA estimates that for each case the ability to store case
information electronically would save 2 minutes of time, plus $.05, for
making a paper copy. The estimated cost savings from this change would
amount to approximately $825,027 per year.32 OSHA believes that this
may be an underestimate, because having even as few as 30 to 40 cases a
year might be enough incentive to prompt a firm to keep its records
electronically. To the extent that these much smaller firms turn to
electronic storage, the cost savings associated with this provision
could be many times greater than the estimate.
---------------------------------------------------------------------------
32 $825,027 = (889,700 Cases x [(2 Minutes/Case) x
($26.32/Hour) + ($0.05/Case)].
---------------------------------------------------------------------------
(4) Employee and Employee Representative Access
The final regulation requires employers to provide employees and
their representatives access to Form 301s and to pay the cost of one
copy. (It also requires them to allow access to the Log, but this is
not a change from the former rule.) OSHA assumes that employers would
require five minutes to pull, copy (at $0.05), and replace the relevant
form. OSHA assumes that (a) at one-tenth of covered establishments, one
employee would request access to his or her own Form 301, and (b) at
one percent of covered establishments, a union representative would
request access to all Form 301s at the establishment. OSHA further
assumes that there would be an average of ten Form 301s at such
establishments.33 The estimated total cost of this provision is
$612,860.34\
---------------------------------------------------------------------------
33 This is a conservative estimate. The average number of
cases per covered establishment was only about 4 in 1998. Further,
some employers already provide copies of Form 301s to union
representatives. [Transcript, March 29, 1996, p. 14].
34 $612,860 = (273,197 Forms x [(5 Minutes x ($26.32/Hour)
+ $.05/Copy)].
---------------------------------------------------------------------------
(5) Access to Other Parties
The final regulation requires that if employers voluntarily
disclose Forms 300 or 301 to persons other than government
representatives, employees, former employees, of authorized
representatives, they must remove or hide the employees' names, with
certain exceptions. Since employers may accomplish this by simply
covering part of the form before they copy it, OSHA considers this
requirement to impose no costs.
(6) Total Cost Impact
Table X-7 summarizes the cost impacts of maintaining records
attributable to the final regulation. The net impact is an estimated
annual cost of $1,881,080.
E. Summary of Costs
Table X-8 summarizes the total annualized cost impacts of the
entire final rule. This summary indicates that:
The largest sources of costs are: New certification requirements
($23.8 million), additional data requirements ($12.0 million),
expansion in the scope of the rule ($5.5 million), and transitional
costs of the new rule ($1.5 million).
The largest sources of savings are: Simplified maintenance of the
Log ($4.8 million), less time required to relearn the recordkeeping
system ($3.1 million), simplified maintenance of individual reports
($1.1 million).
The net impact of these changes is an estimated annual cost of
about $38.6 million.
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[[Page 6100]]
4. Benefits
OSHA's final Recording and Reporting Occupational Injuries and
Illnesses rule is designed to provide an information base to assist
employers and employees to maintain safe and healthy working conditions
that protect workers. The importance of the contribution of accurate
recordkeeping to lower injury and illness rates is indicated by
experience with OSHA's Voluntary Protection Program (VPP), a program
that recognizes employers with exemplary safety and health programs.
VPP worksites, which have comprehensive safety and health management
programs that include effective injury, illness, and accident
recordkeeping, generally have lost-workday case rates ranging from one-
fifth to one-third the rates experienced by most worksites in the same
industry.35 These sites also routinely rely on the Logs and other
worksite data sources to evaluate their programs and correct
deficiencies. This chapter describes the potential benefits associated
with the changes OSHA is making to the recordkeeping requirements in 29
CFR 1904.
---------------------------------------------------------------------------
35 Federal Register, January 26, 1989, p. 3904.
---------------------------------------------------------------------------
A. Overview of Benefits
The benefits of improved recordkeeping fall into two groups.
Improved recordkeeping enhances the ability of employers and employees
to prevent occupational injuries and illnesses. Improved recordkeeping
and reporting also increases the utility of injury and illness records
for OSHA's purposes.
(1) Enhanced Ability of Employers and Employees to Prevent Injuries and
Illnesses
The additional or improved information about events and exposures
to be collected on Form 301, including information on the location, the
equipment, materials or chemicals being used, and the specific activity
being performed, will increase the ability of employers and employees
to identify hazardous conditions and to take remedial action to prevent
future injuries and illnesses. Identifying the irritating substance
that has caused an employee to experience a recordable case of
occupational dermatitis, for example, could prompt an employer to re-
examine available Material Safety Data Sheets to identify a non-
irritating substitute material. On Form 301, details will be recorded
in a logical sequence that will help structure the information and
focus attention on problem processes and activities. Thus the
establishment's records of injuries and illnesses will provide
management with an analytical tool that can be used to control or
eliminate hazards.
The process of using recorded information to control or eliminate
hazards was well illustrated in a comment on the proposed rule.36
This testimony described a training exercise where trainees used Log
data to plot MSD injuries on a floor plan; went into the plant to look
for risk factors and interview workers; formulated specific workplace
design and work organization changes to eliminate or reduce risk
factors; and refined their findings into an action plan.
---------------------------------------------------------------------------
36 Nancy Lessin, Testimony on behalf of Massachusetts
Coalition for Occupational Safety and Health, May 3, 1996,
Transcript, p. 48.
---------------------------------------------------------------------------
If this enhanced ability to identify (and thus address) hazards
translates into a reduction even as small as 0.5 to 1 percent of the
estimated number of recordable cases, it would mean the prevention of
29,147 to 58,285 injuries and illnesses per year.37\
---------------------------------------------------------------------------
37 (0.005 to .01) x 5,828,477.
---------------------------------------------------------------------------
(2) Increased Utility of Data to OSHA
The final rule's changes will also make injury records more useful
to OSHA, as well as to employers and employees. Improvements in the
quality and usefulness of the records being kept by employers would
enhance OSHA's capacity to:
Focus compliance outreach efforts on the most significant
hazards;
Identify types or patterns of injuries and illnesses whose
investigation might lead to regulatory changes or other types of
prevention efforts, such as enforcement strategies, information and
training, or technology development; and
Set priorities among establishments for inspection purposes.
Employers and employees both stand to benefit from the more
effective use of OSHA's resources. The enhanced ability of compliance
officers to identify patterns of injuries will enable OSHA to focus on
more serious problems. Identification of such patterns will also
increase the ability of employers to control these hazards and prevent
other similar injuries. To the extent that employers take advantage of
this information, the burden of OSHA inspections should be reduced in
the long run. Employees clearly will also benefit from these reductions
in injuries.
B. Specific Benefits of the Final Regulation
(1) Changes in Scope of the Regulation
The changes in the scope of the final regulation in the retail and
service sectors represent a refinement in coverage. The scope of the
former rule is defined at the two-digit SIC level; the scope of the
final rule is defined at the three-digit SIC level. OSHA is expanding
the scope to include high-risk three-digit industries that were
previously exempt and to reduce the scope to exempt low-risk three-
digit industries that were previously covered.
The effect of this change is to make the regulation more cost-
effective. This retargeting shifts the burden from industries with
relatively few injuries and illnesses per establishment to industries
with substantially larger numbers of injuries and illnesses per
establishment. Thus the final rule will result in higher hazard
identification benefits per dollar of regulatory burden. It is also
likely to lead to a small reduction in injuries and illnesses at newly
covered establishments that had not been keeping records at all.
The final rule's changes in scope will similarly increase the cost-
effectiveness of OSHA's compliance activities. With the same
expenditure of resources, OSHA will be better able to detect injury and
illness trends and to assist employers to address the causes of these
trends. OSHA expects this more efficient use of Agency resources to
translate directly into reduced worker injuries and illnesses,
reductions in costs to employers, and increased productivity.
(2) Forms Simplification and Definitions
The general reduction in burden associated with changes in the
forms and in the data reported was discussed in the previous chapter
under cost savings. The simplification of the forms also will have
benefits in the form of improved information. The same is true of
definitional changes, such as counting lost workdays or restricted work
days as calendar days and capping the count at 180 days. Easier
recording of data will make records of individual cases more complete
and consistent. It is also possible that simplified recording will
encourage more complete recording of job-related injuries and
illnesses.
This process is illustrated by the change from days away from work
to calendar days. This change represents an explicit decision to shift
the emphasis from lost productivity to the seriousness of the injury or
illness. Calendar days are a more accurate and consistent reflection of
seriousness than
[[Page 6101]]
are lost scheduled workdays. They are also directly comparable across
establishments and industries, while days away from work are not. Thus,
calendar days produce more useful information for the purpose of
assessing patterns of injuries and illnesses. This variable is also
generally much simpler to determine and record, so that the information
is more likely to be complete and accurate. This combination of
attributes, OSHA believes, will substantially improve the quality of
the information available for analysis and enhance the resulting
actions taken to reduce job-related injuries and illness.
(3) Recordable Injuries/Illnesses
The changes in the definition of the injuries and illnesses that
are recordable have several different types of benefits. In general,
they follow a pattern of simplification and/or more cost-effective
targeting of recording requirements, which should produce the types of
benefits discussed above. Changes that add to the information recorded
have other benefits as well.
Specified Recording Thresholds. One change involves identifying the
threshold at which a medical removal condition or restriction is to be
recorded, and tying this to the level in a specific OSHA standard
(lead, cadmium, ergonomics, etc.). This requirement involves no
increase in cost, since the pre-removal or restriction conditions are
already required under the specific OSHA standard.
Needlesticks and Sharps Injuries and Hearing Loss Cases. By far the
most extensive change in recording is the requirement to report all
needlesticks and sharps injuries involving exposure to blood or other
potentially infectious materials in the covered industries. The
benefits of this change are also quite extensive, however, and the
costs are less than they might at first seem. In effect, OSHA is
changing the emphasis on these injuries from the effects (the injury's
medical treatment) to the actual injury caused by the incident (i.e.,
the needlestick or sharps injury).
Recording all needlesticks and sharps injuries will provide far
more useful information for illness prevention purposes. Unlike many
other conditions (e.g., blood poisoning and hearing loss) that are
progressive, AIDS and hepatitis are either present or they are not. In
any given work setting, the risk is probabilistic and bimodally
distributed; either one is infected by an injury or one is not. Under
these circumstances, it is important to prevent all injuries that might
lead to illness. For that prevention strategy to be successful,
however, it is necessary to get a complete picture of the overall
pattern of all needlesticks and sharps injuries. This requires
recording all such injuries, whether or not they result in AIDS,
hepatitis, or other bloodborne illness. The final regulation
accomplishes this.
Because of their high mortality and disability potentials, AIDS and
hepatitis are particularly frightening illnesses. One implication of
this fact, however, is that the benefits per case of prevention are
large. Another implication is that there are substantial employee
morale benefits to a prevention program that is comprehensive and well
informed. Recording all risky wounds and then using the data for
prevention are actions that are reasonable. These provisions of the
final rule are likely also to result in indirect benefits in the form
of improved patient care.
Hearing loss cases also result in substantial disability and lead
to safety accidents as well. OSHA believes that aligning the recording
threshold for such cases with the Standard Threshold Shift criterion in
the Agency's occupational Noise Standard will simplify recording for
many employers who are already familiar with this criterion. The shift
in this recording criterion will also increase the number of hearing
loss cases captured by the recordkeeping system and provide more
opportunities for employers to intervene to prevent other hearing loss
cases.
(4) Procedural Changes and Informational Requirements
The relationship between costs and benefits varies for the final
rule's procedural changes and for its requirements for additional
information. Some provisions have positive but trivial costs. Others
have more significant costs but substantial benefits.
De Minimis Costs. A number of changes have costs that are so low
that the benefits of the change are clearly greater. Examples include
the provisions discussed below.
Recording incidents within seven calendar days, rather than six
working days, will impose costs for more rapid recording on
establishments that work only five days a week. The reduced burden
resulting from a simpler deadline--one week later--almost certainly
outweighs this minuscule cost, however. Moreover, for establishments
that operate six or seven days a week, this change does not impose any
costs at all.
The requirement, upon change of ownership, for the seller to hand
over records to the buyer of the business has extremely small costs.
The seller, after all, is already required to maintain those records,
and the buyer is required to take them over. The benefits of continuity
of information are clearly much greater than this trivial cost.
The cost, if any, for posting (but not revising) the Annual Summary
for three months, rather than one month, is extremely small--
particularly considering that quite a number of other certificates and
information (e.g., elevator certificates, minimum wage information,
etc.) must be posted at all times. The ability of employees to refer
back to the Annual Summary information, as well as the availability of
the information to new employees when they are hired, clearly produces
benefits that exceed the costs.
Certification by a Company Executive. The requirement that a
company executive certify the Summary will have the effect of
increasing the oversight and accountability of higher management in
health and safety activities. The certifying official will be
responsible for ensuring that systems and processes are in place and
for holding the recordkeeper accountable. OSHA believes that this
increased awareness of job-related injuries and illnesses, and of their
prevention, will translate into fewer accidents and injuries because
the certifying executive will have a heightened sense of responsibility
for safety and health, although quantifying this benefit is not
possible at this time.
Additional Data Requirements for Form 301 and Form 300-A. The final
rule will require employers to provide several additional pieces of
information, at an estimated cost of two minutes per Form 301 and
twenty minutes per Form 300-A.
Additional information related to incidents (on Form 301) includes:
Employee's date of hire, emergency room visits, time the employee began
work (starting time of the shift), and time of the accident.
Additional establishment information (on the Form 300-A Summary)
includes:
Annual average number of employees employed in that year, and
Total hours worked by all employees during the year.
Information on the injured employee's date of hire can provide
insight into a number of factors that have been shown to relate to
injury rates. Such factors may include inadequate training,
inexperience on the job, etc. If OSHA were to link its injury data with
information on the distribution of job tenure, for example, it could
then calculate injury rates by job tenure category for different jobs.
That information would help to identify areas
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where better training would have the greatest potential to reduce
injuries.
Data on starting times of shifts and the time of occurrence of the
accident will facilitate research on whether accident rates vary by
shift, and whether certain portions of a shift are particularly
dangerous. This information will be helpful to OSHA as well as to the
employer's own assessment of workplace safety and health. Most
importantly, employees will receive the information they need to
understand both the absolute and relative incidence of injuries and
illnesses in their establishment. Such information is essential both
for market-based mechanisms to influence safety and health and for
meaningful employee participation in safety and health.
The inclusion of information concerning the average number of
employees and total hours worked by all employees during the year will
enable OSHA inspectors to calculate incidence rates directly from the
posted summary. Employers will also benefit from their ability to
obtain incidence information quickly and easily.
At the establishment level, occupational injury and illness records
are examined at the beginning of an OSHA inspection and are used by
compliance officers to identify safety and health problems that deserve
to be focused on. The data on Form 300 and Form 301 will also be used
to determine what areas of the site, if any, warrant particular
attention during the inspection. Again, access to this improved
information will be of direct benefit to employers and employees, who
will be able to act on it to control hazards.
Employee Access to Form 301. Providing employees with access to the
Form 301, as well as the Form 300, will allow them to monitor the
accuracy of the data and to identify possible patterns of injuries and
illnesses. Access to Form 301 is important because this form contains
enough detailed information about the events surrounding the occurrence
to enable workers analyzing it to identify the appropriate protective
measures to prevent future accidents.
(5) Summary
Taken together, the changes that OSHA is making to its recording
and reporting requirements are designed to achieve the Agency's primary
goal of reducing job-related injuries, illnesses, and fatalities. The
link between more accurate and better-targeted injury and illness
recordkeeping and accident prevention has repeatedly been established
and emphasized by the National Academy of Sciences, the Keystone
Report, the testimony of safety and health professionals, and the
Agency's own experience. The final rule's changes will thus benefit
workers, their employers, and the Agency's accident prevention efforts.
5. Economic Feasibility and Small Business Impacts
Introduction
This section assesses the impact on affected firms of the costs of
implementing the final recordkeeping rule. It is divided into four
parts. The first part analyzes the economic feasibility of the rule for
firms in all affected industries. The second part analyzes the economic
impacts of the rule on small entities in the affected industries. The
third part presents an Unfunded Mandates Analysis, which OSHA has
conducted in accordance with the Unfunded Mandates Reform Act. The
fourth part examines the potential environmental impacts of the
regulation.
Analysis of Economic Feasibility
The final 1904 rule is a regulation promulgated under sections 8
and 24 of the OSH Act, and is not a standard, which would be
promulgated under Section 6 of the Act. Nevertheless, OSHA has
performed an analysis of the economic feasibility of the rule.
The courts have held that, to demonstrate that a standard is
economically feasible, OSHA ``must construct a reasonable estimate of
compliance costs and demonstrate a reasonable likelihood that these
costs will not threaten the existence or competitive structure of an
industry, even if it does portend disaster for some marginal firms''
[United Steelworkers of America v. Marshall, 647 F.2d 1189, 1272 (D.C.
Cir. 1980) (the ``Lead decision'')]. In assessing the economic
feasibility of the final recordkeeping rule, OSHA has followed the
decisions of the courts in the Lead case and other OSHA cases, and has
relied on information and data in the record to determine that the
final standard is economically feasible for firms in all affected
industries.
OSHA's estimates of the number of covered establishments in each
affected industry are presented in Section 2 of this economic analysis,
and the results of the Agency's analysis of annualized compliance costs
are presented in Section 3. The Agency's analysis is based on comments
to the record, supplemented, where needed, by public information
sources such as the Census Bureau's County Business Patterns.
In this section, for each affected industry, estimates of per-firm
annualized compliance costs are compared with (a) per-firm estimates of
sales from a compilation of 1996 data performed by the U.S. Census
Bureau for the Small Business Administration to reflect parent company
control of establishments, and (b) per-firm estimates of profits
derived from information in Dun & Bradstreet's ``Industry Norms and Key
Business Ratios'' database for 1996 or by applying 1996 profit
percentages from Robert Morris Associates to the Agency's per-firm
estimates of sales. Based on the results of these comparisons, which
identify the magnitude of the potential impacts of the final rule, OSHA
then assesses the rule's economic feasibility for establishments in all
affected industries.
To estimate the sales and profits of covered firms, OSHA identified
the Standard Industrial Classifications (SICs) of every industry under
the scope of the rulemaking. For each industry, OSHA then calculated
the average sales per firm in the relevant SIC(s). The average rate of
return on sales (from Dun and Bradstreet or, if necessary, from Robert
Morris Associates) was used to estimate average profit per firm.
(Throughout this section, the term ``average'' is used to mean the
arithmetic mean.)
The cost estimates compared with estimated sales and profit data
for firms in each affected industry ``screen'' for potential impacts.
If sizeable impacts were identified by this screening analysis,
additional analysis would be necessary.
Table X-9 shows compliance costs as a percentage of before-tax
profits and of sales. This table presents the results of the screening
analysis, which simply measures costs as a percentage of before-tax
profits and sales; the screening analysis is used to determine whether
the compliance costs potentially associated with the rule could lead to
significant impacts on the affected firms under worst-case scenarios.
Whether or not the costs of compliance actually lead to a significant
impact on the profit and/or sales of firms in a given industry will
depend on the price elasticity of demand for the products or services
of firms in that industry.
Price elasticity refers to the relationship between the price
charged for a product and the demand for that product: the more elastic
the relationship, the less able firms are to pass the costs of
compliance through to their customers in the form of a price increase
and the more they must absorb the costs of compliance from their
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profits. When demand is inelastic, firms can absorb all the costs of
compliance simply by raising the prices they charge for that product;
under this scenario, profits are untouched. On the other hand, when
demand is elastic, firms cannot cover the costs simply by passing the
cost increase through in the form of a price increase; instead, they
must absorb some of the increase from their profits. In general, ``when
an industry is subjected to a higher cost, it does not simply swallow
it; it raises its price and reduces its output, and in this way shifts
a part of the cost to its consumers and a part to its suppliers,'' in
the words of the court in American Dental Association v. Secretary of
Labor, [984 F.2d 823, 829 (Seventh Cir. 1993)] (the ``ADA decision'').
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Specifically, if demand is completely inelastic (i.e., the price
elasticity is 0), then the impact of compliance costs that amount to 1
percent of revenues would be a 1 percent increase in the price of the
product, with no decline in demand or in profits. Such a situation
would be most likely when there are few, if any, substitutes for the
product or services offered by the affected firms and the products or
services of the affected firms account only for a small portion of the
income of their consumers. If demand is perfectly elastic (i.e., the
price elasticity is infinitely large), then no increase in price is
possible, and before-tax profits would be reduced by an amount equal to
the costs of compliance (minus any savings resulting from improved
worker health and reduced insurance costs). Under this scenario, if the
costs of compliance represent a large percentage of the firm's profits,
some firms might be forced to close. This scenario is highly unlikely
to occur, however, because it can only arise when there are other goods
or services that are, in the eyes of consumers, perfect substitutes for
the goods produced by the affected firms.
A common intermediate case would be a price elasticity of one. In
this situation, if the costs of compliance amount to 1 percent of
revenues, and prices are raised by 1 percent, then production would
decline by 1 percent. In this situation, firms would remain in business
and maintain the same profit as before, but would produce 1 percent
less product. Consumers would effectively absorb the costs through a
combination of increased prices and reduced consumption; this, as the
court described in the ADA decision, is the more typical case.
As Table X-9 shows, the impacts potentially imposed by the final
rule are not sizeable. On average, annual costs per firm are less than
$58. (In one industry, Transportation Equipment, characterized by large
workplaces, the potential reduction in costs that vary with the number
of cases actually outweighs the potential increase in essentially fixed
costs associated with the number of establishments, producing an
average reduction in costs per firm.) In no industry do average
compliance costs per firm amount to more than .006 percent of sales or
0.3 percent of profits. Even if no price increase were possible, a 0.3
percent decline in profits would not threaten the viability of any
firm. For example, a firm with before-tax profits of 10 percent of
sales would still have profits of 9.97 percent of sales, even under
this extreme scenario. Thus, the final rule is clearly economically
feasible in all industry groups.
Among the covered SICs, average compliance costs as a percent of
sales range from less than .00005% in several industries, such as SIC
29, Petroleum and Coal Products, to .0059% in SIC 593, Used Merchandise
Stores. Average compliance costs as a percent of profits ranges from
less than .0005% in several industries, such as SIC 37, Transportation
Equipment manufacturing, to .293% in SIC 523, Paint, Glass, and
Wallpaper Stores.
Potential Economic Impacts of the Rule on Small Firms
As required by the Regulatory Flexibility Act (as amended in 1996),
this section measures the potential economic impacts of the final rule
on small businesses in the regulated community to determine whether the
rule has a significant impact on a substantial number of small firms.
It builds on the analysis of economic impacts developed in the Economic
Feasibility part of this section. The Agency has analyzed the impact of
the final recordkeeping rule on small entities, as defined by the Small
Business Administration and in accordance with the Regulatory
Flexibility Act.
Data on receipts were provided by the Commerce Department, in a
data table specially commissioned by the Small Business Administration.
Since the size definitions SBA has established do not precisely match
the categories provided in these data, the Agency approximated the
nearest data grouping, where necessary. The SBA-commissioned data were
broken into size categories of firms defined by numbers of employees
(1-4, 5-9, 10-19, 20-99, 100-499, >500). Where these size categories
did not match SBA's assigned ``small'' firm definitions, the Agency
approximated them to the closest category. For those industries where
an ``annual receipts'' SBA definition was used, the Agency projected
the analogous employment break by examining the ratio of employment to
receipts per firm. For example, in Heavy Construction, SIC 16, the
ratio of employment to receipts suggested that a $17 million firm would
have approximately 104 employees. The Agency therefore examined firms
with fewer than 100 employees. This process is shown in Table X-10.
The results of this analysis are shown in Table X-11. Over the
entire range of SICs affected by the final rule, estimated cost per
small firm averages only $31.63.
In order to ensure that even the smallest entities would not be
significantly impacted, the Agency performed an analysis of impacts on
very small firms, i.e., those with fewer than 20 employees. This
analysis used the same sources for sales and profit data as Table X-11.
The results of this analysis are shown in Table X-12.
Regardless of whether the SBA definitions or the fewer-than-20-
employee definition was used, the results were the same--no significant
impact. For the purposes of small-business impact assessment, OSHA
defines as potentially significant annualized costs of compliance that
amount to 1 percent of sales or 5 percent of profits. The impacts of
the rule on sales and profits did not exceed 1 percent for firms in any
covered industry, whether the analysis used the SBA's definitions or
the fewer-than-20-employee size class definition. No small firm in any
industry would need to increase its prices by more than 0.0105 percent,
even under a full cost pass-through scenario. Alternatively, if a small
firm had to pay for the costs of compliance entirely from profits,
costs would account for no more than 0.406 percent of profits 38 in
any industry. Impacts of this magnitude would not affect the viability
of even the smallest firm.
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38 It should be emphasized that a one percent decrease in
profits represents a one percent decrease in profits, not in profit
rate.
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