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Regulations (Preambles to Final Rules) - Table of Contents
• Record Type: Control of Hazardous Energy Sources (Lockout/Tagout)
• Section: 8
• Title: Section 8 - VIII. Regulatory Flexibility Certification

VIII. Regulatory Flexibility Certification

In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.), OSHA must assess the potential economic impact of its standards to determine whether they will impose significant costs upon a substantial number of small entities. "Significance" is determined by the impact upon small firms' profits, market share, and financial viability. In particular, OSHA must determine whether its rules will have a relatively greater negative effect on small entities than on large entities.

To assess the impact of this rule on small entities, the Agency has estimated the total cost of compliance per establishments for firms not currently practicing lockout or tagout. First-year costs would range from $120 for very small firms (those having fewer than 20 employees); to $1,737 for small firms (those having 20 to 99 employees) to $28,172 for large firms (those having 250 employees or more) [Ex. No 17, p. VI-43]. The cost of complying with the Final Rule will depend primarily on the number of workers employed by a firm and the number of maintenance and servicing tasks required annually -- factors that typically depend upon the scale of operation of a company. Thus, based on the above estimates, the costs of the Final Rule will be proportional to the size of the firm and no significant differential impact is expected.

OSHA also has compared the costs of compliance with small entities' total costs of production. The Agency has determined that the cost of full compliance with the rule will equal no more than 0.05 percent of an average small or very small firm's operating costs, and no more than 2.2 percent of an average small firm's net income [Ex. 17, p. VII-6].

As the costs of compliance for small and very small firms are proportional to the size of the firm, and would represent such a small component of the overall cost of the facilities, OSHA certifies that the Final Rule will not have a significant impact upon a substantial number of small entities. The Regulatory Flexibility Assessment of this rule is available for inspection and copying in the rulemaking docket.

Regulations (Preambles to Final Rules) - Table of Contents

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