Workforce Bulletin

Please join Epstein Becker Green's Health Care & Life Sciences and Labor & Employment practitioners as we continue to review the Affordable Care Act and its ongoing impact on hospitality employers and their group health plans.

By Eric J. Conn, Head of the OSHA Practice Group

Pursuant to the Regulatory Flexibility Act, the federal government and its agencies, such as OSHA, are required to give notice of significant rulemaking and other regulatory activity by publishing "semi-annual" regulatory agendas that outline the status of on-going and intended federal regulations and standards.  Someone needs to tell the Administration that "semi-annual" means twice yearly, not every other year.

Historically, the Office of Information and Regulatory Affairs (OIRA) issues a Spring regulatory agenda sometime during the summer, and a Fall regulatory agenda sometime in the winter.  Before last week (the final week of 2012), however, there had been no regulatory agenda published for 2012.  The only regulatory agenda published during 2012, was for Fall 2011.

Congressional Republicans had been hounding the Administration for a regulatory agenda since well before the Election, believing the long delay was because the President feared bad press and negative public reaction to the Administration's continued aggressive regulatory plans.

 

Senator Rob Portman (R-Ohio) sent a letter to the President in late August calling for an Spring Reg Agenda, and Congressman John Kline (R-MN), Chairman of the U.S. House Committee on Education and the Workforce, followed up with a November 1, 2012 press release stating:

"The Obama administration continues to play a game of regulatory hide-and-seek with the American people. Current law was designed to protect the public's right to know about rules and regulations being crafted behind the closed doors of the federal bureaucracy. However, on a range of issues including health care, retirement security, and workplace safety the president seems determined to keep his plans for new regulations secret."

The wait is finally over, as the Fall 2012 Regulatory Agenda was released last week (Friday, December 21, 2012) -- just in time for 2013.  Here are the OSHA-related highlights.  OSHA projects that during 2013, final agency action will be taken on 10 regulations, including the following:

1. A new Confined Spaces in Construction standard (by July 2013)

• For more than a decade, OSHA has been developing a counter-part to the general industry confined space standard (29 CFR 1910.146).
• The Final Rule for the construction industry is expected this summer.

2. An updated Electric Power Transmission and Distribution standard (by March 2013)

• Based on a high incident rate among electric line workers, forty years ago, OSHA developed a standard to address safety during the construction of electric power transmission and distribution lines.  Early in 2013, OSHA expects to implement a series of revisions to this standard intended to address non-construction work performed during maintenance on electric power installations, and to update PPE and Fall Protection requirements for work on power generation, transmission, and distribution installations.
• The final rule is expected early this year.

3. Gutting Cooperative Programs (by April 2013)

• OSHA has proposed to amend its cooperative Safety and Health Achievement Recognition Program (SHARP) to eliminate most of the exemptions from enforcement inspections historically available to facilities that have qualified for the program.
• This change could effectively eliminate most of the incentives for employers to participate in this recognition program, which OSHA has historically administered to incentivize and support small employers to develop, implement, and continuously improve effective safety and health programs.

4. An updated Walking Working Surfaces standard; i.e., Fall Protection (by August 2013)

• OSHA started the process to update its 1990 Fall Protection standard (to reflect advances in technology and strategies for guarding against slips, trips and falls) more than a decade ago.
• The final rule is expected this summer.

Happy Holidays and Happy New Year to all of you, and Happy 1st Anniversary to the OSHA Law Update blog.  On December 20^th, we celebrated our first full year of updates and articles (56 of them) about important OSHA Law topics here on the OSHA Law Update blog.  We would hardly have the energy or enthusiasm to keep the OSHA Law Update current if it were not for all of the incredibly positive feedback, comments, and questions that we have received over the year from all of you.  Thank you for that.

Just as we did last year, as the clock was winding down on a remarkable year of OSHA enforcement and other activity, it is time to take a look ahead to the new year, and offer our thoughts about what we can all expect from OSHA in 2013.  Here is a link to our post from December 2011 in which forecasted 5 important OSHA developments for 2012 (a pretty accurate forecast in retrospect), and here are three developments we expect from OSHA in 2013:

1.  Heavy-handed enforcement will continue to trend up:

During President Obama’s first term in office, OSHA consistently increased enforcement in every measureable way, year over year, and there is every reason to believe that trend will continue.  OSHA’s budget increased early in President Obama’s first team, and that allowed OSHA to hire more than 100 new compliance officers.  The agency also redirected most of the resources and personnel who had formerly been involved in compliance assistance and cooperative programs into enforcement.  As a result of this big increase in enforcement personnel, we saw the number of inspections increase from averages in the mid-30,000’s during the Bush Administration to the mid-40,000’s through President Obama’s first term.  Barring a prolonged trip over the Fiscal Cliff and actual implementation of sequestration, the trend of increasing enforcement personnel and increasing inspections will continue.

In addition to more frequent visits from OSHA, the OSHA leadership team also modified its Field Operations Manual for the purpose of driving up average and total penalties per inspection (i.e., by raising minimum penalties, average penalties, and eliminating penalty reductions available for size and safe history).  As a result, the average per Serious violation penalty doubled from the Bush Administration (approx. $1,000 per violation) to the end of Obama’s first term (approx. $2,000 per violation).  OSHA’s leadership team has expressed a goal of continuing to grow that average to approx. $3,000 per Serious violation.  We also watched the frequency of enhanced citations (i.e., Willful and Repeat violations that carry 10x higher penalties) increase at a rate of more than 200%.  Those changes, and other aggressive enforcement strategies by OSHA, have resulted in the Agency doubling the total number of “Significant” enforcement actions (cases involving penalties of $100,000 or more), and tripling the number of cases involving total penalties over $1M.  That trend is also expected to continue.

The Democratic Party unveiled its Party Platform during President Obama’s Nominating Convention, and offered a glimpse into what we can expect from OSHA in 2013 and beyond.

The platform called for a focus on “continu[ing] to adopt and enforce comprehensive safety standards.”  Many dubbed the 2012 a “status quo election,” which is probably right, and because the status quo at OSHA over the past four years has been a trend of increasing enforcement and focused rulemaking, that is precisely what we should expect from OSHA over the next four years.

Specifically, OSHA will continue to aggressively enforce its existing standards (i.e., increasing numbers of inspections, increasing penalties, and increasing publicity related to enforcement actions).  We anticipate a doubling down on programs and strategies like:

• “Regulation by Shaming” (i.e., embarrassing and inflammatory enforcement press releases -- see our article about Regulation by Shaming in EHS Today);
• Severe Violator Enforcement Program;
• Increasing programmed inspections targeting special emphasis hazards and industries;
• More follow-up inspections and Repeat violations;
• Referring cases to the U.S. Attorney for potential criminal investigations and OSH Act criminal charges;
• More corporate-wide enforcement and settlements; and
• Less flexibility for employers in resolving cases with reasonable settlement positions.

By: Michael S. Kun

The latest wave of class actions in California is one alleging that employers have not complied with obscure requirements requiring the provision of “suitable seating” to employees – and that employees are entitled to significant penalties as a result.

The “suitable seating” provisions are buried so deep in Wage Orders that most plaintiffs’ attorneys were not even aware of them until recently.  Importantly, they do not require all employers to provide seats to all employees.  Instead, they provide that employers shall provide “suitable seats when ...

By Michael Kun

             As we have written before in this space,  the latest wave of class actions in California is one alleging that employers have not complied with obscure requirements requiring the provision of “suitable seating” to emploees – and that employees are entitled to significant penalties as a result.

               The “suitable seating” provisions are buried so deep in Wage Orders that most plaintiffs’ attorneys were not even aware of them until recently.  Importantly, they do not require all employers to provide seats to all employees.  Instead, they provide that employers ...

On Tuesday, December 18, Epstein Becker Green attorneys Gretchen Harders, Frank C. Morris, Jr., and Adam C. Solander offered a one-hour webinar titled “What Employers Need to Know Now!” as the second webinar in a series on the New ACA Implementation Regulations: Employer Impact.

The webinar included:

• ACA implementation timeline
• Structure of the law and basic concepts affecting financial services employers
• Critical employer decision making and planning for 2014
• Alternative plan design options available to financial services employers

The webinar recording and ...

On Tuesday, December 18, Epstein Becker Green attorneys Gretchen Harders, Frank C. Morris, Jr., and Adam C. Solander offered a one-hour webinar titled “What Employers Need to Know Now!” as the second webinar in a series on the New ACA Implementation Regulations: Employer Impact.

The webinar included:

• ACA implementation timeline
• Structure of the law and basic concepts affecting retail employers
• Critical employer decision making and planning for 2014
• Alternative plan design options available to retail employers

The webinar recording and presentation slides for “What ...

On Tuesday, December 18, Epstein Becker Green attorneys Gretchen Harders, Frank C. Morris, Jr., and Adam C. Solander offered a one-hour webinar titled “What Employers Need to Know Now!” as the second webinar in a series on the New ACA Implementation Regulations: Employer Impact.

The webinar included:

• ACA implementation timeline
• Structure of the law and basic concepts affecting hospitality employers
• Critical employer decision making and planning for 2014
• Alternative plan design options available to hospitality employers

The webinar recording and presentation slides for ...

by Lauri F. Rasnick

FINRA is contemplating a new rule that would require brokers transferring firms to inform clients about their signing bonuses or other compensation they are receiving in connection with their moves.  The potential rule, which is now out for public comment, is being considered to protect customers.   By mandating disclosure of the money offered in connection with a move, the client can consider the true motivation behind the move and whether it is in the client’s best interest to transfer all of his or her business.  Indeed, many firms luring over brokers offer ...

By: Jordan B. Schwartz and Eric J. Conn

Section 17(e) of the Occupational Safety and Health Act (“OSH Act”) provides for a Class B misdemeanor criminal penalty, including imprisonment up to six months and substantial monetary fines if an employer’s willful violation of any OSHA standard causes the death of an employee.  Section 17(e) states:

“Any employer who willfully violates any standard, rule, or order promulgated pursuant to Section 6 of this Act, or of any regulations proscribed pursuant to this Act, and that violation caused death to any employee, shall, upon conviction, be punished by a fine of not more than $10,000 or by imprisonment for not more than six months, or by both.”

Pursuant to the Sentencing Reform Act of 1984, 18 USC § 3551 et seq., which standardized penalties and sentences for federal offenses, the criminal penalty for willful violations of the OSH Act causing loss of human life was amended to be punishable by fines up to $250,000 for individuals (18 U.S.C. Sec. 3574(b)(4)), and $500,000 for organizations (id. at Sec. 574(c)(4)).

To obtain a conviction under Section 17(e), a prosecutor must establish beyond a reasonable doubt (unlike the lower civil standard for ordinary OSHA enforcement actions) that:

1. An OSHA Standard (not the General Duty Clause) was violated;
2. The violation was committed by the employer;
   • Courts evaluating OSH Act criminal prosecutions distinguish between “employees” and “employers.” Only in extremely rare circumstances are individuals considered to exert so much control over a corporate entity that the individual would be considered, for all intents and purposes, to be “the employer” for purposes of an OSH Act criminal charge. Although a corporate officer or director might in some circumstances be deemed to be the “employer,” this is only in the case where “an officer’s or director’s role in a corporate entity (particularly a small one) may be so pervasive and total that the officer or director is in fact the corporation and is therefore an employer under §666(e).” U.S. v. Cusack, 806 F. Supp. 47, 50 (D.N.J. 1992).
3. The violation of the Standard was the direct cause of an employee’s death; and
   • Prosecutors must prove beyond a reasonable doubt that the conduct which amounts to the violation of an OSHA standard was both the “cause in fact” (i.e., the employer’s conduct was the “but-for cause” of the accident) and the “legal cause” (the harm was a foreseeable and natural result of the conduct) of the injury.
4. The violation was committed Willfully by the employer.
   • Courts are in substantial agreement that “willfully” under Section 17(e) refers to a deliberate action taken by the employer with knowledge of both the hazardous condition and the OSH Act’s requirements (i.e., the employer knew the conduct was dangerous and unlawful).

Here is some guidance on the Justice Department’s website about OSH Act criminal cases.

In the forty years since Congress enacted the OSH Act, there have been more than 400,000 workplace fatalities, yet fewer than eighty total OSH Act criminal cases have been prosecuted – less than two per year-- and only approximately a dozen have resulted in criminal convictions.  Historically, the prosecutions have typically targeted cases in which the employers were alleged to have falsified documents and lied to OSHA in conjunction with violations related to an employee fatality.  The cover-up was worse than the crime.  Chronic violators and employers who demonstrated a systematic rejection of worker safety laws also appear to have been more likely to face charges.

Recently, however, OSHA has begun to increase the frequency in which it refers cases to the Justice Department for investigation by a U.S. Attorney and possible criminal sanctions.  In fact, we have been told off-the-record from several representatives within OSHA and the Department of Labor Solicitor’s office (OSHA’s lawyers), that as a matter of policy, OSHA now makes a criminal referral in every case involving an employee fatality and a willful violation.  Regardless whether that is in fact happening, in the past few years, we have certainly seen a rise in the instances of charges being brought and/or significant plea deals being negotiated.