Presented ToUS House of Representatives Small Business Committee
Speaker(s)Dear, Joseph A.
It's a pleasure to appear before this Committee again to discuss OSHA's initiatives to reinvent itself in order to protect workers at risk on the job more effectively and, at the same time, to reduce regulatory burdens on small businesses. In addition, I would like to discuss how OSHA is implementing the President's March 4 and April 21 directives on regulatory reinvention.
As I mentioned during my appearance last month before your Subcommittee on Regulation and Paperwork, there have been a lot of troubling stories circulating about OSHA. For instance, you may have heard allegations that OSHA has "banned the tooth fairy" by prohibiting dentists from giving children their extracted teeth to take home. I have testified previously that this story is a myth, but it continues to surface. Stories like this detract from the more important story of OSHA, employers and workers acting together to promote and ensure safe and healthy workplaces.
The plain truth is that OSHA saves lives. Since its creation in 1970, OSHA has performed an invaluable service to millions of America's working families. Through the agency's protective standards and enforcement, and efforts by thousands of responsible employers, the rate of fatal occupational injuries has been cut in half. But our work is far from done. Despite this progress, every year, work-related accidents and illnesses still result in the loss of an estimated 56,000 lives. That's more than we lost in battle during the entire nine-year Vietnam war.
On an average day in our country, 17 workers are killed in workplace accidents, and an estimated 137 more die from occupational disease. Just imagine if one plane crashed every day, killing 150 people. The public would be outraged and demand action. But since these deaths normally occur one or two at a time, at different worksites around the country, most people just don't notice the problem.
Along with these alarming fatality statistics is the fact that another 16,000 workers are injured every day on the job, 6,000 seriously enough to lose time from work. In all, workplace injuries alone cost our economy over $100 billion a year, with occupational illnesses costing additional billions as well. We all bear these staggering human and monetary costs--as employers, as workers, and as taxpayers.
As we examine the potential impact of our regulations on small firms, we cannot forget that a safe and healthful work environment is just as important for employees working in small firms as it is for those working in large firms. Workplace injuries, illnesses and deaths are not confined to certain industrial sectors or to large firms. According to an OSHA analysis of data collected by BLS, businesses with fewer than eleven workers account for 33 percent of all fatalities even though they account for less than 20 percent of employees. So, while small businesses may seek exemptions from regulations, their employees unfortunately have no such exemption from workplace tragedies.
For example, on June 12 of this year, a 43-year old employee of Bay, Inc. in Fruita, Colorado was killed when the boom of a crane failed and fell on him. On June 13, a 26-year old employee of ESOCO Orrington, Inc. of Orrington, Maine was killed when he became tangled in a conveyor belt and was pulled through a 6 inch space between a roller and conveyor belt's frame. On June 15, a 66-year old laborer at Shared Resources, Inc. in David City, Nebraska was pinned between two pieces of grain-loading equipment and crushed to death. All of these employers were small, with fewer than 100 employees.
Since coming to OSHA in 1993, I have been working hard to reduce the number of work-related injuries, illnesses and deaths, and to get the most out of our limited resources. I recognize that in the past, OSHA has at times lost sight of its mission, focusing on numbers and rules instead of smart enforcement and results. I also know that proceeding with "business as usual" could well put us out of business altogether. But make no mistake: OSHA is changing the way it does business.
Presidential Regulatory Reinvention Initiative and the New OSHA
On March 4, 1995, the President issued a regulatory reinvention directive requiring agencies to 1) cut obsolete regulations; 2) reward results, not red tape; 3) meet with those affected by their regulations; and 4) expand efforts to utilize consensual rulemaking. Following up on this directive, as announced by President Clinton, Vice President Gore and Secretary Reich on May 16, OSHA has begun regulatory reform initiatives to enhance safety, trim paperwork, and transform the agency.
The Administrator of OIRA, Sally Katzen, described one such initiative to you just last week - nationalizing our Maine 200 program. In this program, which was instituted in 1993, the 200 Maine companies with the highest number of workplace-related injuries were offered a choice: work in partnership with OSHA to improve safety, or face stepped-up enforcement. All but two firms chose partnership. The firms received assistance in developing safety and health programs, and in return were placed on a secondary list for inspections.
The results of the Maine program are extremely promising. In two years, the employers identified more than 95,000 hazards, and nearly six out of ten employers in the program have already reduced their injury and illness rates, even as inspections and fines have diminished significantly. Wisconsin has started a similar program targeting the 200 employers with the highest incidence rate of injuries and illnesses based on workers' compensation data. OSHA plans to expand the most successful features of these programs nationwide -- features such as using work-site specific data to help identify high-hazard workplaces, offering employers a choice in how they work with OSHA, providing information to employers about effective safety and health programs, conducting efforts to find and fix hazards, ensuring management commitment and employee involvement, and modifying enforcement policies for high-performance employers.
Another OSHA initiative is the Focused Inspections in Construction policy, which started October 1, 1994. It allows OSHA to recognize the efforts of safety-conscious employers by conducting our inspections in a more streamlined manner, focusing on the four leading causes of construction fatalities: falls, struck by objects, crushing and electrocution.
OSHA is changing from an organization driven by numbers of inspections to one driven by results, in keeping with the President's charge to reward reinvention, not red tape. Improving OSHA's performance measurement system is more than an important internal objective, it is also required by the Government Performance and Results Act (GPRA).
Many employers have complained that OSHA inspectors care less about worker safety than they do about meeting perceived "quotas" for citations and penalties. While OSHA has never used quotas, it has in the past used citations and penalties as performance measures. I have put a stop to this practice. We will now measure our success as an agency by our success in making real safety and health improvements, such as identifying and abating hazards and reducing the number of injuries and illnesses in the workplace. As an example of how OSHA is focusing on results instead of red tape, OSHA no longer cites employers who have failed to put up the required OSHA poster, we simply give them a poster.
It is a common belief these days that small businesses hate OSHA. While it is true that some small businesses have had bad experiences, and that we are not satisfied that we have eliminated all legitimate small business concerns, the customer satisfaction survey conducted for OSHA tells a different story.
In response to Executive Order 12862, which directed all Federal agencies to survey their customers and develop customer service improvement plans, OSHA contracted with a private survey research group to survey a random sample of employers who had been inspected by Federal OSHA in FY 1993. 433 employers (60 percent of the 740 sampled) responded to this survey. Most employers agreed that their recent OSHA inspection had identified hazards that needed correction (67 percent), that management and employees were more aware of the importance of safety and health following the inspection (62 percent), and that their workplace was a safer place to work as a result of the inspection (59 percent). Seventy-six percent rated the OSHA compliance officer highly for professionalism.
Many employers have taken the trouble to write letters to OSHA to compliment inspectors' performance. Mr. Edward Prenot, President of Rockford Drop Forge Company, referring to a recently conducted inspection commented, "We appreciate the professional and competent manner in which this matter has been handled...." After an inspection of Glacier Vandervell, Inc., Mr. James Friedt wrote, "You really did reflect a `New OSHA' in stating your interest in participating in the development of `solutions' and then measuring the effectiveness of those solutions."
Review of Regulations
Of course, many small employers have expressed concern regarding the volume and complexity of federal regulations. In response, the President directed federal agencies, including OSHA, to conduct a page-by-page review to identify outdated, duplicative or conflicting regulations. OSHA held meetings in May and June with stakeholders, including representatives of small business, to help identify regulations of concern. These discussions greatly assisted our regulatory review, which was sent to the President on June 15. The review contains several reinvention and reform initiatives, including revision of standards using plain language and evaluation of methods for improving chemical hazard communication and the right-to-know in the workplace.
The Hazard Communication Standard (HAZCOM) was originally developed in 1983 to ensure that workers who may be exposed to toxic substances are provided useful information about the dangers of these substances and about protective measures needed to work with the substances safely. The standard, as intended, has resulted in a large increase in awareness among employers and employees about workplace hazard recognition and control. However, the standard has also received substantial criticism, including that Material Safety Data Sheets are too long and too technical, and that enforcement of the standard has focused too heavily on paperwork and minor violations, particularly with regard to relatively low hazard materials, such as common consumer products.
Some of these criticisms of the rule are exaggerated, focusing on a handful of horror stories rather than the thousands of workers who have been protected from hazardous substances as a result of the standard. Nevertheless, OSHA has asked the National Advisory Committee on Safety and Health to convene a working group to identify ways to improve hazard communication in the workplace. The working group will provide recommendations on how OSHA can simplify material safety data sheets, reduce the amount of paperwork, improve the effectiveness of worker training, and revise enforcement policies to focus on serious hazards. Meanwhile, I have reiterated agency policy with unambiguous instructions to the field that they are not to cite employers when workplace chemical exposures are from the use of common household chemicals, such as bleach or dishwasher detergent, except in situations where these chemicals pose a substantial risk to employees.
Small Business Efforts
I would like to take a few minutes now to highlight some of the specific measures OSHA is taking to address the needs of small business. First, OSHA complies with the Regulatory Flexibility Act by conducting a regulatory flexibility analysis for every safety and health standard. Each analysis estimates the cost of compliance for small entities, including the cost of reporting, recordkeeping, and obtaining any professional skills needed to comply. If the analysis reveals that a rule will have a significant economic impact on a substantial number of small entities, OSHA considers regulatory alternatives that would serve to minimize this impact.
Several examples illustrate how some of our more recent rules meet the unique needs of small employers. First, OSHA's lead in construction standard (May 4, 1993) (29 CFR 1926.62) was designed so that the small home remodeling job would be treated differently from the large-scale lead abatement project. OSHA worked with the National Association of Homebuilders, which is made up predominantly of small businesses, to develop guidance for the home remodeler on how to comply with the regulation. A second example concerns OSHA's rule for small grain elevators with storage capacities of less than one million bushels (29 CFR 1910.272). These small facilities are allowed to perform a daily visual inspection of grain dust accumulations instead of using physical monitoring equipment like motion detectors. And just recently, OSHA worked with the National Association of Home Builders to develop an alternative to requirements in our Trenching Standard regarding the application of waterproofing (tar) to the exterior basement walls of residential buildings.
Some of OSHA's outreach efforts are especially designed to ensure that small employers understand our rules and how to comply with them. A free consultation service is available to employers to help them identify potential hazards at their worksite, improve their safety management systems, and qualify for one-year exemptions from routine OSHA inspections. The program is targeted toward small businesses and is delivered by State governments using well-trained consultation staff. The consultation program is completely separate from the enforcement program, and participants cannot be cited during the consultation visit. All States offer consultation services. In the last five years, OSHA has helped over 100,000 small and medium sized businesses identify and correct over 800,000 hazards, free of charge, free of citations, and free of penalties.
Special efforts have also been made to ensure active participation in OSHA rulemaking by all interested stakeholders, including small employers.
For example, in developing a possible chromium regulation, OSHA has had several meetings with associations representing the electroplating industry (which is dominated by small employers) and has conducted two of its eight site visits at small businesses that use chromium compounds. OSHA has also made a point of inviting a variety of organizations that represent small businesses or industries dominated by small businesses to its ergonomic stakeholder meetings as well as soliciting small business owners to attend a round-table discussion on possible ergonomic regulations.
OSHA has developed unique assistance tools to help employers comply with certain OSHA rules. For example, OSHA recently issued a standard to protect workers from exposure to cadmium, a substance that causes kidney disease and cancer. In direct response to requests from employers and medical professionals, OSHA, in cooperation with the Cadmium Council, developed an interactive software program to help employers analyze workers' medical lab test results. The software, nicknamed "GOCAD", classifies employees based on these test results and also recommends corrective action to be taken by the employer. The software also provides the user the option of creating useful supporting documents, such as the required letter to affected workers and helpful checklists. This interactive compliance tool is available free of charge and has been distributed by both OSHA and the Cadmium Council.
So far, more than 590 copies of this software have been downloaded from the Department of Labor's electronic bulletin board, more than 200 copies have been distributed in disk form to employers who asked for it in that form, and many other copies have been retrieved from various Internet sites. OSHA strongly encourages users to copy and share the program. A Department of Commerce report to Congress stated that the program is "...expected to save private firms hundreds of thousands of dollars in annual compliance and administrative costs and conceivably millions in liability and litigation costs."
The positive public response to GOCAD led OSHA to pursue a similar tool for our Asbestos standard. The first draft of the ASBESTOS ADVISOR was reviewed by representatives of trade associations, specifically building owners and managers and unions, and their suggestions were incorporated into the test product before it was released for wider testing. This testing will be conducted jointly with the affected industries. OSHA has already received enthusiastic support from members of the business community and notable attention in the trade press about this software.
These ADVISOR systems meet several objectives that are well-known concerns of the business community, particularly the concerns of small firms. They clarify provisions of highly technical rules, provide necessary guidance, reduce paperwork and research burdens, and most importantly, protect workers' lives and health.
Looking toward the 21st century, OSHA is actively exploring ways to use computer technology to provide assistance to employers. This includes placing the text of rules on the Department's electronic bulletin board and Internet sites; expanding the information available on our CD-ROM, which is the number one GPO sales item among all government-issued CD-ROMs; and, developing additional interactive compliance tools. OSHA is also proud that we have been working with the Small Business Administration from the inception of the idea for the U.S. Small Business Advisor (SB ADVISOR). This interactive computer assistance tool will give employers one-stop, Internet access to services and regulatory information.
The idea for the SB ADVISOR emerged from the March 1994 Small Business Forum on Regulatory Reform. The small business participants in the forum recommended that federal regulatory agencies create a "one-stop" point of contact and access for all of the regulatory information that a small firm would need to know in order to comply with regulatory and recordkeeping requirements. The SB ADVISOR was unveiled at this year's White House Conference on Small Business. Through the SB ADVISOR's Home Page, users will be able to search for regulations and receive compliance assistance. While the SB ADVISOR remains "under construction", OSHA continues to make useful compliance information available to small firms (as well as workers and the general public) on its own Internet Home Page.
In this interactive environment, employers can receive copies of standards, ask questions and receive timely responses, and find out about best work practices.
Finally, OSHA is working on some new Compliance Directives that would respond to small business needs without reducing worker protections. In response to an April 21 directive from the President, OSHA intends to revise its penalty policy that reduces penalties based on employer size. The revised policy will provide for larger reductions in proposed penalties for small employers. In addition, penalties will be eliminated for other-than-serious violations for small and medium sized employers if, during an inspection, OSHA does not find any willful, repeated, failure-to-abate, or high gravity serious violations.
Another new compliance directive would allow specific good faith reductions of 10 to 80 percent for employers with effective safety and health programs that find and fix hazards. The level of reductions would depend on the degree of completeness and effectiveness of the overall safety and health program at the worksite.
In conclusion, small business and OSHA need to work together. There are real hazards which result in injured workers and death on the job every day. We need to be partners, not adversaries. I would be pleased to respond now to any questions you may have.