The following are selected excerpts from the preamble to the Occupational Injury and Illness Recording and Reporting Requirements, the Recordkeeping rule (66 FR 5916, 29 CFR Parts 1904 and 1952). These excerpts represent some of the key discussions related to the final rule (66 FR 6122, 29 CFR Parts 1904 and 1952).

Section 1904.31 Covered employees.

Final Rule Requirements and Legal Background

Section 1904.31 requires employers to record the injuries and illnesses of all their employees, whether classified as labor, executive, hourly, salaried, part-time, seasonal, or migrant workers. The section also requires the employer to record the injuries and illnesses of employees they supervise on a day-to-day basis, even if these workers are not carried on the employer's payroll.

Implementing these requirements requires an understanding of the Act's definitions of "employer" and "employee." The statute defines "employer," in relevant part, to mean "a person engaged in a business affecting interstate commerce who has employees." 29 U.S.C. 652(5). The term "person" includes "one or more individuals, partnerships, associations, corporations, business trusts, legal representatives, or any organized group of persons." 29 U.S.C. 652(4). The term "employee" means "an employee of an employer who is employed in a business of his employer which affects interstate commerce." 29 U.S.C. 652(6). Thus, any individual or entity having an employment relationship with even one worker is an employer for purposes of this final rule, and must fulfill the recording requirements for each employee.

The application of the coverage principles in this section presents few issues for employees who are carried on the employer's payroll, because the employment relationship is usually well established in these cases. However, issues sometimes arise when an individual or entity enters into a temporary relationship with a worker. The first question is whether the worker is an employee of the hiring party. If an employment relationship exists, even if temporary in duration, the employee's injuries and illnesses must be recorded on the OSHA 300 Log and 301 form. The second question, arising in connection with employees provided by a temporary help service or leasing agency, is which employer -- the host firm or the temporary help service -- is responsible for recordkeeping.

Whether an employment relationship exists under the Act is determined in accordance with established common law principles of agency. At common law, a self-employed "independent contractor" is not an employee; therefore, injuries and illnesses sustained by independent contractors are not recordable under the final Recordkeeping rule. To determine whether a hired party is an employee or an independent contractor under the common law test, the hiring party must consider a number of factors, including the degree of control the hiring party asserts over the manner in which the work is done, and the degree of skill and independent judgment the hired party is expected to apply. Loomis Cabinet Co. V.OSHRC, 20 F.3d 938, 942 (9th Cir. 1994).

Other individuals, besides independent contractors, who are not considered to be employees under the OSH Act are unpaid volunteers, sole proprietors, partners, family members of farm employers, and domestic workers in a residential setting. See 29 CFR Section 1975.4(b)(2) and Section 1975.6 for a discussion of the latter two categories of workers. As is the case with independent contractors, no employment relationship exists between these individuals and the hiring party, and consequently, no recording obligation arises.

A related coverage question sometimes arises when an employer obtains labor from a temporary help service, employee leasing firm or other personnel supply service. Frequently the temporary workers are on the payroll of the temporary help service or leasing firm, but are under the day-to-day supervision of the host party. In these cases, Section 1904.31 places the recordkeeping obligation upon the host, or utilizing, employer. The final rule's allocation of recordkeeping responsibility to the host employer in these circumstances is consistent with the Act for several reasons.

First, the host employer's exercise of day-to-day supervision of the temporary workers and its control over the work environment demonstrates a high degree of control over the temporary workers consistent with the presence of an employment relationship at common law. See Loomis Cabinet Co., 20 F.3d at 942. Thus, the temporary workers will ordinarily be the employees of the party exercising day-to-day control over them, and the supervising party will be their employer.

Even if daily supervision is not sufficient alone to establish that the host party is the employer of the temporary workers, there are other reasons for the final rule's allocation of recordkeeping responsibility. Under the OSH Act, an employer's duties and responsibilities are not limited only to his own employees. Cf. Universal Constr. Co. v. OSHRC, 182 F.3d 726, 728-731 (10th Cir. 1999). Assuming that the host is an employer under the Act (because it has an employment relationship with someone) it reasonably should record the injuries of all employees, whether or not its own, that it supervises on a daily basis. This follows because the supervising employer is in the best position to obtain the necessary injury and illness information due to its control over the worksite and its familiarity with the work tasks and the work environment...

...[T]he proposal did not alter the long-standing meanings of the terms employee, employer or employment relationship. The day-to-day supervision test for identifying the employer who is responsible for compliance with Part 1904 is a continuation of OSHA's former policy, and is consistent with the common law test. The comments indicate that many employers are not aware that they need to keep records for leased workers, temporary workers, and workers who are inaccurately labeled "independent contractors" but are in fact employees. However, these workers are employees under both the former rule and the final rule. Incorporating these requirements into the regulatory text can only help to improve the consistency of the data by clarifying the employer's responsibilities.

The 1904 rule does not require an employer to record injuries and illnesses that occur to workers supervised by independent contractors. However, the label assigned to a worker is immaterial if it does not reflect the economic realities of the relationship. For example, an employment contract that labels a hired worker as an independent contractor will have no legal significance for Part 1904 purposes if in fact the hiring employer exercises day-to-day supervision over that worker, including directing the worker as to the manner in which the details of the work are to be performed. If the contractor actually provides day-to-day supervision for the employee, then the contractor is responsible for compliance with Part 1904 as to that employee...

OSHA has rejected the suggestions that either the payroll or workers' compensation employer keep the OSHA 1904 records. The Agency believes that in the majority of circumstances the payroll employer will also be the workers' compensation employer and there is no difference in the two suggestions. Temporary help services typically provide the workers' compensation insurance coverage for the employees they provide to other employers. Therefore, our reasons for rejecting these suggestions are the same. OSHA agrees that there are good arguments for both scenarios: 1. Including injuries and illnesses in the records of the leasing employer (the payroll or workers' compensation employer and 2. For including these cases in the records of the controlling employer. Requiring the payroll or workers' compensation employer to keep the OSHA records would certainly be a simple and objective method. There would be no doubt about who keeps the records. However, including the cases in the records of the temporary help agency erodes the value of the injury and illness records for statistical purposes, for administering safety and health programs at individual worksites, and for government inspectors conducting safety and health inspections or consultations. The benefits of simplification and clarity do not outweigh the potential damage to the informational value of the records, for the reasons discussed below.

First, the employer who controls the workers and the work environment is in the best position to learn about all the injuries and illnesses that occur to those workers. Second, when the data are collected for enforcement and research use and for priority setting, the injury and illness data are clearly linked to the industrial setting that gave rise to them. Most important, transferring the recording/reporting function from the supervising employer to the leasing firm would undermine rather than facilitate one of the most important goals of Part 1904 -- to assure that work-related injury and illness information gets to the employer who can use it to abate work-related hazards. If OSHA were to shift the recordkeeping responsibility from the controlling employer to the leasing firm, the records would not be readily available to the employer who can make best use of them. OSHA would need to require the leasing firm to provide the controlling employer with copies of the injury and illness logs and other reports to meet this purpose. This would be both burdensome and duplicative.

Requiring the controlling (host) employer to record injuries and illnesses for employees that they control has several advantages. First, it assigns the injuries and illnesses to the individual workplace with the greatest amount of control over the working conditions that led to the worker's injury or illness. Although both the host employer and the payroll employer have safety and health responsibilities, the host employer generally has more control over the safety and health conditions where the employee is working. To the extent that the records connect the occupational injuries and illnesses to the working conditions in a given workplace, the host employer must include these cases to provide a full and accurate safety and health record for that workplace.

If this policy were not in place, industry-wide statistics would be skewed. Two workplaces with identical numbers of injuries and illnesses would report different statistics if one relied on temporary help services to provide workers, while the other did not. Under OSHA's policy, when records are collected to generate national injury and illness statistics, the cases are properly assigned to the industry where they occurred. Assigning these injuries and illnesses to temporary help services would not accurately reflect the type of workplace that produced the injuries and illnesses. It would also be more difficult to compare industries. To illustrate this point, consider a hypothetical industry that relies on temporary help services to provide 10% of its labor force. Assuming that the temporary workers experience workplace injury and illness at the same rate as traditional employees, the Nation's statistics would underrepresent that industry's injury and illness numbers by 10%. If another industry only used temporary help services for 1% of the labor force, its statistics would be closer to the real number, but comparisons to the 10% industry would be highly suspect.

The policy also makes it easier to use an industry's data to measure differences that occur in that industry over time. Over the last 20 years, the business community has relied increasingly on workers from temporary help services, employee leasing companies, and other temporary employees. If an industry sector as a whole changed its practices to include either more or fewer temporary workers over time, comparisons of the statistics over several years might show trends in injury and illness experience that simply reflected changing business practices rather than real changes in safety and health conditions...

OSHA agrees with these commenters that there is a potential for double counting of injuries and illnesses for workers provided by a personnel supply service. We do not intend to require both employers to record each injury or illness. To solve this problem, the rule, at Section 1904.31(b)(4), specifically states that both employers are not required to record the case, and that the employers may coordinate their efforts so that each case is recorded only once -- by the employer who provides day-to-day supervision. When the employers involved choose to work with each other, or when both employers understand the Part 1904 regulations as to who is required to record the cases and who is not, there will not be duplicative recording and reporting...

OSHA believes that many employers already share information about these injuries and illnesses to help each other with their own respective safety and health responsibilities. For example, personnel service employers need information to process workers' compensation claims and to determine how well their safety and health efforts are working, especially those involving training and the use of personal protective equipment. The host employer needs information on conditions in the workplace that may have caused the injuries or illnesses...

...The personnel leasing firm will not necessarily have better information than the host employer about the worker's exposures or accidents in previous assignments, previously recorded injuries or illnesses, or the aftermath of an injury or illness. And the personnel leasing firm will certainly have less knowledge of and control over the work environment that may have caused, contributed to, or significantly aggravated an injury or illness. As described above, the two employers have shared responsibilities and may share information when there is a need to do so.

If Part 1904 records are inaccurate due to lack of reasonably reliable data about leased employees, there are ways for OSHA to address the problem. First, the OSH Act does not impose absolutely strict liability on employers. The controlling employer must make reasonable efforts to acquire necessary information in order to satisfy Part 1904, but may be able to show that it is not feasible to comply with an OSHA recordkeeping requirement. If entries for temporary workers are deficient in some way, the em-ployer can always defend against citation by showing that it made the efforts that a reasonable employer would have made under the particular circumstances to obtain more complete or accurate data...

OSHA has decided not to base recording obligations on the temporary employee's length of employment. Recording the injuries and illnesses of some temporary employees and not others would not improve the value or accuracy of the statistics, and would make the system even more inconsistent and complex. In OSHA's view, the duration of the relationship is much less important than the element of control. In the example of the temporary nurse's aide, for OSHA recordkeeping purposes the worker would be considered an employee of the facility for the days he or she works under the day-to-day supervision of the host facility...

Because OSHA is using the common law concepts to determine which workers are to be included in the records, a worker who is covered in terms of recording an injury or illness is also covered for counting purposes and for the annual summary. If a given worker is an employee under the common law test, he or she is an employee for all OSHA recordkeeping purposes. Therefore, an employer must consider all of its employees when determining its eligibility for the small employer exemption, and must provide reasonable estimates for hours worked and average employment on the annual summary. OSHA has included instructions on the back of the annual summary to help with these calculations.

...OSHA's view is that a given establishment should have one OSHA Log and only one Log. Injuries and illnesses for all the employees at the establishment are entered into that record to create a single summary at the end of the year. OSHA does not require temporary workers or any other types of workers to be identified with special titles in the job title column, but also does not prohibit the practice. This column is used to list the occupation of the injured or ill worker, such as laborer, machine operator, or nursing aide. However, OSHA does encourage employers to analyze their injury and illness data to improve safety and health at the establishment. In some cases, identifying temporary or contract workers may help an employer to manage safety and health more effectively. Thus an employer may supplement the OSHA Log to identify temporary or contract workers, although the rule does not require it...

These workers should be evaluated just as any other worker. If a student or intern is working as an unpaid volunteer, he or she would not be an employee under the OSH Act and an injury or illness of that employee would not be entered into the Part 1904 records. If the worker is receiving compensation for services, and meets the common law test discussed earlier, then there is an employer-employee relationship for the purposes of OSHA recordkeeping. The employer in that relationship must evaluate any injury or illness at the establishment and enter it into the records if it meets the recording criteria.