Check contractors' OSHA compliance, avoid liability

Question: How much are we obligated to ensure that contractors comply with OSHA regulations? What do we look for to ensure that the contractor does not have a poor compliance history?

Answer: There may be some question as to the absolute legal obligation to ensure that contractors comply with federal safety regulations. But there is no doubt that employers and occupational health professionals should do so anyway, according to Matthew Carmel, MS, CIH, CSP, president of OSHA Data, a consulting firm in Maplewood, NJ, that analyzes federal Occupational Safety and Health Administration (OSHA) data compiled in its database and offers advice on how past violations can guide current activities.

Carmel says the history of OSHA enforcement activities clearly indicates that contractors can be a hazard to employers and employees. Because so many contractors are involved in the construction industry, one of the most accident-prone industries, he suggests that occupational health professionals always should check the contractor's safety record.

"One of our clients has found that up to 20% of contractors misrepresent - or just plain lie - regarding their previous OSHA violation records," he says. "I don't think most employers take this step of verifying the history, but the more responsible employers do. It's an implied requirement in the process safety standard."

The contractor's history can be checked through your local OSHA office or through a consulting company such as Carmel's. He admittedly has an interest in encouraging such checks but points out that checking a contractor's safety record is a natural extension of your internal safety program. Courts have been inconsistent in determining to what extent employers and contractors are jointly liable for contractor-related accidents. Carmel also notes these frequent objections to checking a contractor's safety record:

4 OSHA inspections are so infrequent that the absence of violations is not a reliable indication of an employer's safety record. There is some truth to that argument, but you still should check. If you were hiring a treasurer for the company, you would want to check for criminal embezzlement convictions just to weed out the worst risks.

4 Increased workers' compensation premiums paid by unsafe contractors are a market force that keeps bad contractors away. But Carmel points out that worker's compensation premiums are initially based on payroll and class of business with a "zero" experience modification factor. Only later, after three to four years of loss experience, do insurance actuaries perform the calculations necessary to adjust the modification factor. Therefore, such a market force would only affect businesses that have been around for long periods of time. The contracting industry is very fluid, with businesses starting up and shutting down quite frequently.

4 Actively tracking bidder's safety records requires additional personnel and increase government costs. That is true to some extent, Carmel says, but the cost is worthwhile. The small cost of contractor screening is virtually insignificant when considering the legal issues or potential losses resulting from a contractor that may cause a serious accident or fatality in your workplace.

When checking the contractor's background, Carmel says you should be careful to consider whether the listed OSHA violations are still under contention. OSHA often assesses penalties that are then reduced when the employer contests them. The following are some red flags Carmel suggests you watch for as you screen contractors:

· Contractor misrepresentation.

Any contractor who is willing to lie about qualifications is entirely disreputable, untrustworthy, and most certainly will lie about other contract matters, Carmel says. You should ask contractors to divulge their complete OSHA violation history for at least the previous five years. They should provide either a summary or actual copies of all OSHA citations issued during the period. Any omissions found later should be considered reason to disqualify the contractor.

· Willful violations.

Willful violations are defined as knowingly, intentionally, and purposefully disregarding an OSHA standard. These violations are a serious matter, and OSHA does not hand them out lightly. Usually, they must be approved by the OSHA regional administrator. If a contractor has a record of any willful violations in the previous five years, Carmel says they should be disqualified.

· Repeat violations.

Repeat violations are issued violations similar to those found on prior inspections of any work site in the country under the control of the cited employer. As with willful violations, they should disqualify the contractor if they occurred in the previous five years.

· Failure-to-abate (FTA) penalties.

FTA penalties are issued when OSHA finds that a previously cited condition has not been corrected. Carmel says you should consider FTA penalties to indicate a lack of regard for worker safety.

· Violations in expertise areas.

Contractors should excel in whatever they claim to be their specialties. If a contractor claims to be expert in asbestos handling, for instance, it should have very few violations of the vertical OSHA asbestos standards in either general industry (29 CFR 1910.1001), construction (29 CFR 1926.1101 redesignated from 1926.58), or any 18(b) state plan that has standards specifically addressing asbestos. If a substantial number of "serious" violations exist, Carmel suggests you consider disqualifying that contractor.

· Complaint inspections.

Contractors with a history of numerous OSHA inspections initiated on the basis of employee complaints should be requested to provide a satisfactory written explanation, Carmel says. Although employees frequently abuse the rights afforded to them under federal law by filing unfounded or retaliatory OSHA complaints against their employers, an excess number of complaint inspections suggests poor management style, labor/management strife (which can cause a delay in project completion), unwillingness to address worker safety issues, or perhaps a truly unsafe workplace.

· Unpaid penalties.

Unpaid penalties for OSHA violations can suggest a willingness to disregard the law or financial instability. Be sure the related violations have become final orders before taking unpaid penalties into consideration; a contractor should not be expected to pay penalties until the appeals process has been exhausted.

· Exemplary performance.

Not every thing you find in checking an OSHA compliance history will be detrimental to the contractor. You might want to give preferential consideration to contractors that demonstrate exemplary safety and health performance, as evidenced by participation in the Voluntary Protection Programs (VPP), three or more consecutive "programmed- planned" OSHA inspections with no "serious" violations, or similar findings.

Editor's Note: For more information contact: Matthew Carmel, OSHA Data, 12 Hoffman St., Maplewood, NJ 07040-1114. Telephone: (973) 378-8011. n