Safety incentive programs

OSHA’s take on incentive programs

In a series of three evolving memos over the past decade, OSHA has addressed incentive programs that may discourage injury reporting.

The first memo, issued in March 2012, deemed those types of incentive programs “problematic” under section 11(c) of the Occupational Safety and Health Act of 1970. Taking away an incentive for reporting an injury “could be considered unlawful discrimination” against an employee.

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“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 (of OSHA’s regulations). In this case, the employer is violating that rule, and a referral for a recordkeeping investigation should be made,” the memo states.

Responding to an email from Safety+Health, former OSHA Assistant Labor Secretary David Michaels wrote that the reaction to the memo was mixed. “Some corporate stakeholders” were critical, but others, including the agency’s “Electrical Transmission partnership” and “most unions and public health groups,” supported it. Some employers interpreted the memo as OSHA no longer allowing any type of incentive programs.

The agency attempted to clarify its stance in October 2016 after publishing its Improve Tracking of Workplace Injuries and Illnesses final rule in May of that same year.

The agency stated that 1904.35(b)(1)(iv) in the final rule didn’t prohibit safety incentive programs. However, withholding a benefit such as a cash prize or “other substantial award” because an employee reported an injury would violate that regulation.

In October 2018, under the Trump administration, OSHA issued a memo stating employers could have rate-based programs as long as those programs “are not implemented in a manner that discourages reporting.”

Withholding a prize or bonus because of a reported injury is allowed “as long as the employer has implemented adequate precautions to ensure employees feel free to report an injury or illness.”

The memo states: “An employer could avoid any inadvertent deterrent effects of a rate-based incentive program by taking positive steps to create a workplace culture that emphasizes safety, not just rates.”

Under the Biden administration, OSHA is reviewing that guidance “to determine whether it provides necessary information to employers about how to incentivize safety in the workplace without disincentivizing the reporting of injuries,” an agency spokesperson told S+H.

An OSHA rule to “memoralize” its positions on safety incentive programs and post-incident drug testing was moved to long-term actions in the new administration’s first regulatory agenda, released in June. That means no action is expected anytime in the near future.