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OP-ED: Creating an Effective (and Legal) Safety Incentive Program

Daily Journal of Commerce

January 17, 2020

Overview

We are all familiar with the sign in the break room or outside the jobsite indicating how many days the company has gone without a reported injury or safety violation. Employers often laud these milestones as an example of their commitment to safety and appreciation for their employees. For employees, reaching a certain number of days without an injury or safety violation may result in a monetary bonus or some other type of prize. This is known as a rate-based incentive program, and it is one type of safety incentive program that employers have used to encourage employees to work safely.

Safety incentive programs’ effectiveness of reducing injuries has received vigorous debate from safety professionals for some time. On the one hand, some argue that workers will not work safely unless they are provided with an incentive to do so. Others argue that an employee should not need an incentive to work safely and avoid injury, and providing one can even encourage under-reporting or hiding of injuries.

Regardless of which side of the debate you fall on, the safety and health enforcement agencies have begun taking a closer look at safety incentive programs and the effect they have on employees’ reporting of injuries or safety hazards. Accordingly, the rules regarding these programs have changed in recent years and employers should be mindful of these changes when evaluating their comprehensive safety programs.

On May 12, 2016, the U.S. Occupational Safety and Health Administration (OSHA) published a final rule that prohibited employers from retaliating against employees for work-related injuries or illnesses. Federal OSHA used safety incentive programs as an example of a company policy that could deter an employee from reporting a work-related injury and said that they should be discontinued. The agency reasoned that if employees are given a bonus or reward for going 30 days without a work-related injury, an employee who is injured on the 29th day might feel pressured to not report the injury to their employer at the risk of costing other employees their safety incentive.

Oregon OSHA adopted these federal regulations and in early 2017 issued an informal fact sheet setting out when an incentive-based program would be a violation of the rule. Not surprisingly, Oregon OSHA took the position that rate-based incentive programs (i.e., a program that rewards employees for going a certain amount of time without a work-related injury) would be a violation of the rule because they could result in an adverse action against an employee for reporting a workrelated injury. Many employers interpreted this rule to mean that all incentive-based programs were a violation of Oregon OSHA’s rules and discontinued their safety incentive programs altogether.

On Oct. 11, 2018, federal OSHA issued a memorandum clarifying its position on safety incentive programs. Most notably, the agency rolled back its prior position and stated that rate-based incentive programs are permissible as long as they are not implemented in a manner that discourages reporting. Therefore, under federal OSHA’s rules, an employer may take a negative action against an employee under a rate-based incentive program and not be cited as long as the employer has implemented adequate precautions to ensure employees feel free to report an injury or illness.

Examples of adequate precautions provided by federal OSHA include:

  • an incentive program that rewards employees for identifying unsafe conditions in the workplace;
  • a training program for all employees to reinforce reporting rights and responsibilities and emphasize the employer’s non-retaliation policy; or
  • a mechanism for accurately evaluating employees’ willingness to report injuries and illnesses.

Unfortunately, for employers here, Oregon OSHA has not adopted federal OSHA’s new position with respect to rate-based incentive programs and such programs will likely continue to be a violation under state rules. However, this does not mean that all incentive-based programs violate Oregon OSHA’s rules.

To the contrary, Oregon OSHA has explicitly stated that an incentive-based program that rewards employees for participating in safety training or identifying unsafe working conditions would be permissible. Another example of an acceptable incentive-based program would be to reward employees for exercising safe behavior such as wearing the proper personal protective equipment (PPE) or conducting an updated Job Hazard Analysis (JHA) when encountering an unplanned condition.

Ultimately, firms that choose to adopt a safety incentive program should be sure the program does not discourage employees from reporting an injury or safety hazard. Additionally, a safety incentive program should not be an employer’s sole means of developing a safe workplace. An incentive program should be one piece of a comprehensive safety and health plan that also includes safety training, hazard assessment, consistent inspections, and post-incident investigations, among other things. To the extent an incentive-based program plays a role in a company’s overall safety and health plan, it is important to tailor the program and rewards to your particular workforce. This can be achieved by developing a good understanding of the company’s culture and obtaining input from employees about what motivates them.

Column first appeared in the Oregon Daily Journal of Commerce on January 17, 2020.

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