No, OSHA has not banned safety incentive programs.

In fact, on October 11, 2018, agency regional administrators received a memo from Kim Stille, acting director of enforcement programs, which walks back the Obama administration OSHA’s more hard line stance on safety incentive programs. Even under former agency head Dr. David Michaels, OSHA never out-and-out “banned” incentive / reward programs.

Michaels and his leadership team took a tougher line on incentive / reward programs that retaliated against or punished workers for reporting work-related injuries or illness. Programs that had that effect were prohibited as part of a final rule issued on May 12, 2016.

The purpose of the memorandum issued this past October is to clarify OSHA’s position that it does not prohibit workplace safety incentive programs (or post-incident drug testing, which is a story in itself).

Do's and don’t’s

Here are the main points spelled out in the memo from OSHA’s new regime in the Trump White House:

  • OSHA believes many employers use safety incentive programs to promote workplace safety and health.
  • Incentive programs can be an important tool to promote workplace safety and health.
  • Enforcing legitimate work rules regarding whether or not an injury or illness is reported demonstrates that the employer is serious about creating a culture of safety – not simply the appearance of reducing injury and illness rates.
  • OSHA particularly favors the type of incentive program that rewards workers for reporting near-misses or hazards, and encourages involvement in a safety and health management system.
  • Rate-based incentive programs that focus on reducing the number of reported injuries and illnesses typically reward employees with a prize or bonus at the end of an injury-free month or designated time period, or evaluate managers based on their work unit’s lack of injuries. Rate-based incentive program are permissible as long as they are not implemented in a manner that discourages reporting.
  • This is how OSHA defines permissible rate-based incentive programs: If an employer does take a negative action against an employee under a rate-based program, such as withholding a prize or bonus because of a reported injury, OSHA will not cite that employer as long as the employer has implemented adequate precautions to ensure that employees are feel free to report an injury or illness.
  • There can be no intimidation on the part of the employer. A written document that employees are encouraged to report and will not face retaliation for reporting may not, by itself, be adequate to ensure that employees truly “feel free” to report, according to OSHA.
  • This is particularly true when the consequences of reporting will be a lost opportunity to receive a substantial reward, according to OSHA.
  • In the eyes of OSHA, you can avoid any inadvertent deterrent effects of a rate-based incentive program by taking positive steps to create a workplace culture emphasizing safety – not just rates.
  • OSHA says such unintended consequences will likely be counterbalanced if you add to your incentive program rewards to identify unsafe conditions and install means to assess the willingness to report incidents.