Where does OSHA stand on safety incentives? In the past several years various agency officials have made it rather clear, and in fact have gone into some detail.
OSHA inspectors are watching
On June 14th, 2010, OSHA chief Dr. David Michaels addressed the annual professional development conference of the American Society of Safety Engineers and stated, “We disapprove of incentive programs that, for example, offer a pizza party or allow workers to enter a raffle for a new truck. These incentive programs can discourage employees from reporting injuries because they want to receive the reward.
“Good incentive programs feature positive reinforcement when workers demonstrate safe work practices, and when workers take active measures such as reporting close calls, abating hazards, and using their stop-work authority to prevent a workplace tragedy.
“One result of the wrong kind of incentive programs is that the number of worker injuries and illnesses are underreported — sometimes across whole industries. As a result, these programs conceal workplace hazards that, unabated, continue to threaten workers' health and safety. If an injury isn't reported, the safety professional — you — cannot investigate the incident and nothing can be learned from it.
“OSHA inspectors are now watching for these incentive programs and they will scrutinize them to ensure they aren't discouraging workers from reporting injuries and illnesses…
“Over the long run, however, the answer to wrong-thinking incentive programs is to change the focus. If you have a culture of safety in your workplace, you don't need incentive programs. If you operate a comprehensive Injury and Illness Prevention Program, the proper motivation is built in.”
On March 12th, 2012, Richard Fairfax, at the time deputy assistant secretary for OSH, wrote a memorandum to the agency’s ten regional administrators on “Employer Safety Incentive and Disincentive Policies and Practices.” His intent: “to provide guidance to both field compliance officers and whistleblower investigative staff on several employer practices that can discourage employee reports of injuries and violate section 11(c), or other whistleblower statutes.”
Fairfax gave examples of what he called “discriminatory policies:”
- “The potential for unlawful discrimination under all of these policies may increase when management or supervisory bonuses are linked to lower reported injury rates. While OSHA appreciates employers using safety as a key management metric, we cannot condone a program that encourages discrimination against workers who report injuries.”
- “An employer might enter all employees who have not been injured in the previous year in a drawing to win a prize, or a team of employees might be awarded a bonus if no one from the team is injured over some period of time.
- “If an employee of a firm with a safety incentive program reports an injury, the employee, or the employee's entire work group, will be disqualified from receiving the incentive, which could be considered unlawful discrimination. One important factor to consider is whether the incentive involved is of sufficient magnitude that failure to receive it "might have dissuaded reasonable workers from" reporting injuries. Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53, 68 (2006).
“In addition, if the incentive is great enough that its loss dissuades reasonable workers from reporting injuries, the program would result in the employer's failure to record injuries that it is required to record under Part 1904. In this case, the employer is violating that rule, and a referral for a recordkeeping investigation should be made. “
Incentives and VPP worksites
On June 28th, 2012, Deputy Assistant Secretary for OSH Jordan Barab described to the House Subcommittee on Workforce Protections OSHA’s position on incentives, specifically relating to programs at VPP worksites.
“We certainly are not opposed to all incentive programs,” said Barab. On the contrary, a positive incentive program that encourages or rewards workers for serving on safety and health committees, completing safety and health training, or reporting injuries, illnesses, near-misses, or hazards can encourage worker involvement in a safety and health management system. An incentive program that encourages positive employee involvement is a valuable component of a VPP-quality safety and health management system.
Types of incentive programs
On August 14th, 2014, OSHA chief Dr. David Michaels issued a memorandum for improving the agency’s administration of the Voluntary Protection Program (VPP). He emphasized that when OSHA evaluates companies for VPP eligibility, “incentive programs should promote safety awareness and worker participation in safety-related activities, and must not be the cause of under-reporting of injuries and illnesses.”
Michaels wrote, “A positive incentive program encourages or rewards workers for reporting injuries, illnesses, near-misses, or hazards; and/or recognizes, rewards, and thereby encourages worker involvement in the safety and health management system. Such an incentive program can be a good thing and an acceptable part of a VPP-quality safety and health management system. Examples of such positive incentives include providing tee shirts to workers serving on safety and health committees; offering modest rewards for suggesting ways to strengthen safety and health; or throwing a recognition party at the successful completion of company-wide safety and health training.
“An incentive program that focuses on injury and illness numbers often has the effect of discouraging workers from reporting an injury or illness. Disincentives to reporting may range from awarding paid time off to a unit that has the greatest reduction in incidence rates to rewarding workers with a celebration for achieving an injury/rate reduction goal or maintaining an injury-and illness-free worksite for a period of time. A site whose incentive program has the potential to discourage worker reporting fails to meet the VPP's safety and health management system requirements.”
Appendix A of the memo gave guidance to agency staff evaluating incentive programs and corporate bonus programs of VPP candidates. Wrote Michaels: “OSHA does not want to exclude participants from VPP simply because an incentive program does not meet the intent of this memorandum. OSHA staff is encouraged to work with companies to modify their incentive programs and to craft a program that will work for the company and is aligned with the policy outlined in this memorandum. “
Appendix A describes different types of organizational structure, incentive program structure, and use of injury and illness rates in a calculated metric in determining compliance with VPP guidelines.
For example, an incentive program based solely on local worksite injury and illness rate outcomes, with rewards going to employees, supervisors, and lower-level management requires program revision.
A performance model that includes multiple worksites’ injury and illness rates as one factor in the overall model that rewards employees, supervisors and site management is to be evaluated on a case-by-case basis. Injury and illness data and reporting practices are to be reviewed for evidence of under-reporting.