Presented ToThe Subcommittee on Government Programs and Oversight and The Subcommittee on Regulatory Reform and Paperwork Reduction
Speaker(s)Watchman, Gregory R.
DEPUTY ASSISTANT SECRETARY FOR OCCUPATIONAL SAFETY & HEALTH
U.S. DEPARTMENT OF LABOR
SUBCOMMITTEE ON GOVERNMENT PROGRAMS AND OVERSIGHT
SUBCOMMITTEE ON REGULATORY REFORM AND PAPERWORK REDUCTION
HOUSE SMALL BUSINESS COMMITTEE
March 18, 1998
Thank you for inviting me to testify about the Occupational Safety and Health Administration's small business assistance programs. OSHA has been a leader within the Department of Labor in developing a comprehensive program of small business compliance assistance and penalty reductions pursuant to the Small Business Regulatory Enforcement Fairness Act (SBREFA). We've hired a Small Business Liaison, Mr. Art DeCoursey, who is here with me today. Also, OSHA has sought out small business input during recent rulemakings, including establishing a Small Business Advocacy Review Panel during our rulemaking on preventing occupational exposure to tuberculosis.
OSHA's core mission is to ensure a safe and healthful workplace for every working American. We are making progress; the Bureau of Labor Statistics announced last December that the rate of worker injuries and illnesses is at its lowest point in the history of the BLS occupational injury and illness survey, at 7.4 per 100 workers. But more must be done to protect our Nation's workers, and to seek methods that avoid placing unnecessary burdens on employers. Through reinvention, OSHA is developing new strategies that leverage the agency's limited resources and, in many cases, re-shape how OSHA interacts with employers and workers to promote safe and healthy work environments.
The New OSHA
OSHA is changing the way we do business. It has been three years since President Clinton announced the "New OSHA" initiative. Since then, we have developed a broad range of partnership programs that promote cooperative efforts between employers, workers, and government. We're making enforcement programs smarter and fairer by improving targeting to spend more time at the most hazardous workplaces and less time at safer ones; and by treating responsible employers differently from neglectful ones. We're simplifying standards by rewriting them in plain language, using performance-based approaches wherever possible. We're focusing less on individual, technical violations, and more on systematic approaches that allow workers and employers to find and fix hazards on an ongoing basis. And finally, we're measuring results not by numbers of inspections, citations, or penalties, but by real improvements in the lives of working people, such as reduced injury and illness rates.
We're especially proud of the fact that we've reduced the paperwork burden on businesses by 20 percent over the past two years. Paperwork citations are down 75 percent over the past five fiscal years. As a percentage of all OSHA violations, they've fallen from 29 to 10 percent.
OSHA's ongoing program to assist small entities in complying with agency regulations is made up of three main components: 1) the consultation program, which provides free on-site hazard analysis and compliance assistance; 2) the compliance assistance provided at all levels of the organization in response to specific inquiries (this guidance is provided in the form of letters, telephone responses, and e-mail); and 3) general compliance guidance provided through paper and electronic publications. OSHA also has a number of training initiatives that help small businesses.
First and foremost among the agency's small business efforts is the OSHA Consultation Program. The Consultation Program is a free service targeted primarily toward smaller employers in high hazard industries or with especially hazardous operations. It provides, upon request from employers, direct, on-site assistance on how to comply with OSHA regulations. Priority for service is given to sites with 250 or fewer employees and with no more than 500 employees at all sites nationwide. The program is available in all 50 states, as well as the District of Columbia, Guam, Puerto Rico, and the Virgin Islands. It is administered by State agencies, and is up to 90 percent Federally funded. Funded in FY 1998 at a level of $35.3 million, the Consultation Program has been widely acclaimed for delivering valuable, no-cost compliance information that is geared toward individual companies' specific concerns.
OSHA consultation services also provide small employers with an opportunity to receive free training for themselves and their employees as part of every consultation visit. This training may be given either formally or informally at the employer's worksite, or at other locations. The consultation program is completely independent from OSHA's inspection and enforcement efforts. No penalties are proposed, or citations issued, for any safety or health problems identified by the consultant. The service is strictly confidential. Only if an employer fails or refuses to eliminate or control a serious hazard or imminent danger situation within the agreed-upon time frame will OSHA enforcement staff be notified. Such instances are very rare.
In the last five years, OSHA has conducted over 124,000 compliance assistance visits through the consultation program, helping employers identify and correct over 877,000 hazards. In 1995, a survey found that employers who used the consultation service were overwhelmingly satisfied with the assistance they received, and 94 percent of them responded that they would use the program again.
Response to Specific Inquiries
OSHA recently issued a directive (CPL 2-0.121) that describes the Agency's policies and procedures for complying with SBREFA. This directive is intended to ensure that all employer and employee requests for information or compliance assistance will receive timely, accurate and helpful responses, and that all information, to the extent practical, will be generated from the same data sources. The directive further provides for a small business coordinator to be available in each OSHA region to address complaints from small businesses about enforcement.
OSHA's Area, Regional and National office personnel use OSHA's formal directive system, compliance manuals, standards and preambles to standards, and computer information systems to respond to all inquiries. The area and regional offices refer inquiries to the national office for response if the inquiry cannot readily be answered in the field or if the inquiry would generate new OSHA policy. Inquiries received by the national office are answered by the different agency directorates depending upon the nature of the question and the response desired.
OSHA's field offices make a wide variety of publications and information bulletins available to small businesses at no cost. Some of these publications are developed specifically for small businesses. For example, OSHA publishes a small business compliance guide as soon as we issue any new final standard. For OSHA's Methylene Chloride (MC) standard, the Agency went a step further and mailed a small entity compliance guide, eleven Fact Sheets, and a compliance assistance booklet to a variety of interested businesses, and posted the materials on the OSHA Home Page. We are now developing another compliance assistance document, using question and answer format. OSHA has also presented speeches to various groups to explain the requirements of the new MC standard, including several talks at the Institute for Research and Technical Assistance, which consults regularly with small businesses on regulatory issues.
In 1996, OSHA published a Handbook for Small Businesses. The handbook is designed to help small entities meet the legal requirements imposed by the OSHA statute, and provides a variety of useful suggestions on how to incorporate generally accepted safety and health systems into everyday business activities. The information in the booklet, which is available on OSHA's Home Page, can easily be adapted to individual establishments.
Two weeks ago, OSHA published a new pamphlet for small business employers in question and answer format. This brochure explains how the various components of SBREFA help small businesses, describes the many OSHA initiatives that can help a small business operator, and lists the addresses and telephone numbers of all OSHA Regional Offices and State Plan offices. OSHA plans a mass mailing of this new pamphlet at the end of this month to approximately 40 Small Business Development Centers and 16 Small Business One Stop Capital Shops. At the same time, we will send copies of the brochure to each of the ten Regional Advocates for the Small Business Administration.
The OSHA Internet Home Page, located at http://www.osha.gov on the World Wide Web, contains a wealth of information, including links to OSHA bulletins, media releases, and OSHA programs and services. In addition, we have produced several interactive, computerized "expert systems" which explain to a small business employer using the system how a standard applies to a particular work situation. These expert systems are available over the Internet or on CD-ROM.
For those without access to the Internet, OSHA plans to continue to issue printed Fact Sheets, information packets, and copies of rules to employers who request them.
Training is another important area in which OSHA helps small businesses. In order to meet the increasing demand for occupational safety and health training from the private sector, OSHA established the OSHA Training Institute Education Centers program. The education centers are nonprofit organizations selected through a national competition to present OSHA Training Institute courses for the private sector, including small businesses. The education centers support their programs through tuition. There are currently 12 education centers, with at least one in each OSHA Region. Last year more than 6,000 private sector students attended courses at the education centers.
OSHA's Susan Harwood Training Grant Program awards grants to nonprofit organizations to train workers and employers about occupational safety and health. Each year, OSHA selects topics that fit one or more of the program's stated goals, one of which is to educate workers and employers in small businesses. For FY 1998, one topic selected was safety and health programs for small businesses. Awards for this topic ranged from $79,000 to $155,000, for a total of over $1 million. The grants went to different types of organizations, such as universities, safety councils, business organizations, labor organizations, and joint labor-management organizations. These organizations will use the grant money to conduct classes, seminars, training sessions and workshops, and are expected to train over 5,000 people nationwide.
We also have the Train-the-Trainer Outreach program, in which trainers are authorized to present 10- and 30-hour programs in construction and general industry, and to present completion cards provided by OSHA to students. Last year approximately 100,000 students received training under this program, including many from small businesses.
Furthermore, OSHA is working with occupational safety and health professionals in governmental agencies and professional societies, such as the American Society of Safety Engineers, the American Association of Occupational Health Nurses, the National Institute for Occupational Safety and Health, and the American Industrial Hygiene Association, to develop curricula that can meet the needs of small businesses. Topics that would be of interest to small employers were selected, and curricula were developed and made available on OSHA's Home Page. OSHA's field staff, including state consultants, have referred small businesses to the Web Site to obtain easy-to-understand information about OSHA and its regulatory requirements. Additional training modules will be added based on feedback received, and the sponsoring organizations are encouraged to publicize the Web Site and to sponsor local training sessions.
Section 223 of SBREFA requires that agencies have in place a "policy or program ... to provide for the reduction, and under appropriate circumstances for the waiver, of civil penalties for violations of a statutory or regulatory requirement by a small entity." Even before SBREFA, OSHA had in place a penalty policy that recognized the good faith efforts of responsible small employers: under our policy, a small employer who has had no serious, repeat, or willful violation in the last year and who has made a good faith effort to maintain a safe and healthy workplace may receive up to a 95 percent penalty reduction. For many other-than-serious violations, OSHA waives the penalty entirely. Section 17 of the OSH Act specifically requires OSHA to take the gravity of the violation, the size of the employer's business, the good faith of the employer, and the employer's history of prior OSHA violations into account when determining the amount of penalty to be levied in a given instance.
OSHA is required to report to Congress by March, 1998, on the scope of its penalty reduction program, the number of enforcement actions against small entities that qualified for the program, and the total amount (in dollars) of penalty reductions or waivers granted under the program. OSHA's Integrated Management Information System (IMIS) is set up to count the number of enforcement actions taken by the agency and the size of the employer in each enforcement action. Last fall, OSHA also modified its system so that information related to SBREFA could be collected in the national office. For the period March 29 - December 31, 1997 the total amount of penalty reductions offered to small entities was $107,025,960. Over 88 percent of small entities cited for violations of the OSH Act qualified for penalty reductions. The table below shows the breakdown by size.
Enforcement Actions Against Small Entities (1) in Which Penalties Were Reduced
|Size of Business
(# of employees)
|Number of Enforcement Actions in Which Penalties Were Reduced||Dollar Amount of Penalty Reduction|
|251 - 500||376||$31,500||$1,871,944|
Seeking Out Small Business Input
OSHA has demonstrated its commitment to seeking small business input in several recent rulemakings. In our Methylene Chloride rulemaking, we actively solicited and received input from many small businesses. Small businesses were included in the site visits that MC team members conducted. We opened the rulemaking record in 1994 to provide additional opportunity for small businesses to comment. Several small businesses participated in the public hearings, and small business interests were represented by trade associations. We conducted a full Regulatory Flexibility Analysis, and a separate economic impact analysis based on Small Business Administration (SBA) small business definitions. In response to the concerns of small businesses, OSHA modified the standard, decreasing costs for small businesses, extending compliance deadlines and simplifying exposure monitoring recordkeeping requirements for small businesses. We also altered training requirements, decreased the frequency of required physicals for employees under 45, left laboratory tests to the discretion of a physician, specified that respirators are only required in regulated areas when the Permissible Exposure Limit is likely to be exceeded, and eliminated a requirement for written compliance plans.
In our Safety and Health Programs rulemaking, we held a series of four small business stakeholder meetings around the country, which provided small businesses with an opportunity to present in-depth comments on the draft proposed rule in anticipation of a potential Small Business Advocacy Review Panel for this rulemaking. In OSHA's negotiated rulemaking on steel erection, we were able to garner significant small business representation, and the SBA agreed that a Small Business Advocacy Review Panel was not necessary.
Moreover, OSHA was the first Federal agency to convene a SBREFA-mandated Small Business Advocacy Review Panel. The Panel for OSHA's proposed rule for Occupational Exposure to Tuberculosis was convened on September 10, 1996. The Panel consisted of representatives from OSHA, the Office of Information and Regulatory Affairs within the Office of Management and Budget, and the Office of Advocacy (OA) within the SBA. This Panel decided on the appropriate materials to send to the Small Entity Representatives, received comments from these representatives, and developed a report on the Panel's findings, which has become part of the rulemaking record.
The Small Entity Representatives provided the Panel with many good suggestions and comments on the draft proposed rule. They pointed to places in the rule that were difficult to understand, questioned the usefulness of certain definitions used in the rule, suggested less costly means of achieving the same goal, and generally provided invaluable "front-line" input that OSHA was able to use to simplify and clarify the proposal. We learned some interesting things from the experience. Many small entity representatives told us that they are uncomfortable having their names made public; that reading and assimilating the extensive information provided by the Panel was time-consuming; and that many small business people are too busy to spend the time to fully review and comment on regulatory materials. We also learned that the Panel process is resource-intensive for the agencies involved; and that a change from a 60 to a 90 day deadline for preparing the Panel report would enable the Panel to conduct a more thorough analysis of comments received during the Review.
The work that follows the preparation of the Panel Report is also intensive: in response to the Panel's findings, the Agency addressed the issues raised by the Panel by adding clarifications and explanations, as appropriate, to the proposed rule, the preamble to the rule, and the economic analysis (and particularly the regulatory flexibility analysis). OSHA modified the proposal to allow portability of skin tests and non-site-specific elements of worker training, and to allow employers to demonstrate employee competence rather than provide annual retraining. OSHA also agreed to conduct a special study of homeless shelters, and we've scheduled four public hearings this spring and summer to solicit small business input. While responding to Panel recommendations did require significant work by the agency, the proposed regulation and accompanying materials were improved as a result. Overall, we believe that the Panel process contributed to the rulemaking by providing small entities access to the rulemaking process at the earliest possible time.
OSHA is fully in compliance with both the letter and the spirit of SBREFA. We have several initiatives in place that are designed to help small businesses, and they are working well. In fact, OSHA's compliance assistance and penalty reduction programs have been favorably mentioned by SBA's National Ombudsman in his recently released First Annual Report to Congress on The Regulatory Fairness Program (Dec. 1997). He said, and I quote:
"One general observation is that OSHA has positively influenced small businesses' perception of their regulatory enforcement efforts. This observation was indicated to Fairness Board members and the National Ombudsman by testimony at public hearings, small business comments and information provided by the agencies."
The report also stated that to date, the Ombudsman's Regulatory Fairness program has not received any negative comments that address enforcement or compliance issues with OSHA.
Some refreshingly positive comments were made about OSHA at meetings of the Regional Fairness Boards, as well. Small business owners praised the changes in the way OSHA does business, and held OSHA up as an example for other agencies. They also complimented OSHA's Consultation Program, Voluntary Protection Program, and the positive, helpful attitudes of OSHA personnel.