United States: The ABCs Of Health And Safety Law

What would you do if you received a phone call from your client at 3 a.m. and he informed you that one or more of his employees had been killed in an accident at work earlier that morning? This type of phone call is not reserved for presidential candidates, so if you're not already familiar with OSHA and MSHA (the government agencies charged with ensuring the health and safety of America's workforce), you should continue reading this article.

An alphabet soup of safety regulations

The federal Occupational Safety and Health Administration (Fed-OSHA) is the arm of the U.S. Department of Labor (U.S. DOL) responsible for enforcing safety regulations at most workplaces, including construction, manufacturing and general industry. In fact, if you're reading this article at your desk in your office building, your workplace is subject to OSHA regulations. However, South Carolina is a "state plan" state, meaning that OSHA regulations are enforced by the S.C. Department of Labor, Licensing and Regulation's OSHA Division (S.C. OSHA). Fed-OSHA allows states to administer their own plans, so long as the regulations are at least as effective as the federal regulations. S.C. OSHA's regulations largely track the Fed-OSHA standard with a few exceptions (described at www.scosha.llronline.com).

Like its sister agency, the Mine Safety and Health Administration (MSHA) is a separate arm of the U.S. DOL responsible for enforcing safety regulations, but MSHA is responsible for safety at the nation's mines. While there are no coal mines in South Carolina, there is a ton (mining joke) of mining happening in our state. South Carolina is home to sand and gravel pits, stone quarries, cement plants and in the near future an operational gold mine. Additionally, MSHA regulates all independent contractors working at mines, so trucking companies, heavy equipment dealers, construction and blasting companies, engineering firms and other businesses are subject to MSHA regulations when performing work at a mine. Unlike OSHA, MSHA does not allow "state plans," so mines in South Carolina are inspected by the federal government. Though many states have agencies that regulate mining, in addition to MSHA, South Carolina has no state counter-part to MSHA.

OSHA and MSHA are like fraternal twins

Though both agencies share a common goal, to ensure the safety of workers, OSHA and MSHA have significant differences regarding enforcement and compliance mechanisms. Though some companies (cement companies, for instance) deal with both government regulators, most companies are subject to one or the other and must ensure that the correct regulations are being followed to avoid costly penalties.

(In)Frequent Inspections: Charged with ensuring safety at nearly all worksites throughout the state, you can imagine that S.C. OSHA does not have the resources to inspect each workplace every year. In fact, you may never have an inspection at your office building unless you have a problem with asbestos or some major accident. S.C. OSHA inspections are usually the result of a hazard complaint filed with the agency, a workplace fatality or serious accident, or a random selection. If the S.C. OSHA inspector shows up at a workplace, the company has the right to require the inspector to obtain a search warrant (though this may not be advisable depending on the circumstances).

MSHA, on the other hand, is statutorily required to conduct at least two complete (wall-to-wall) inspections of every mine in South Carolina each year. Therefore, mining companies are visited by federal inspectors much more frequently and are subject to receiving citations for any violation of one of MSHA's standards during the inspection. Mine operators cannot require an MSHA inspector to obtain a search warrant, and any effort to prevent or delay the inspection may be considered "impeding" the inspector and subject the company to further liability.

Safety Violations Can Be Costly: Companies subject to OSHA and MSHA regulation are exposed to various levels of civil liability based on the seriousness of the violation. Under OSHA, a company may receive a civil penalty for any one of the following violations: (1) discretionary penalty up to $7,000 for an Other Than Serious Violation (probably would not cause death or serious physical harm); (2) mandatory penalty up to $7,000 for a Serious Violation (substantial probability that death or serious physical harm could result and employer knew, or should have known, of hazard); (3) penalty from $5,000 to $70,000 for a Willful Violation (employer knowingly commits violation or commits with plain indifference to the law); (4) penalty up to $70,000 for a Repeat Violation (violation of any standard, regulation, rule or order where, upon re-inspection, a substantially similar violation occurs); or (5) penalty of up to $7,000 per day for Failure to Abate Prior Violation (violation continues beyond prescribed abatement date). Additionally, Willful Violations can subject the employer to criminal penalties, including prison time, in the event of a fatality.

MSHA's penalty structure is based on a point system that allocates a certain number of points for the size of the operator, history of previous violations (including repeat violations), gravity of the violation and negligence of the operator. The penalty criteria, currently the subject of proposed revisions undergoing notice and comment rulemaking, result in a penalty from $100 to $70,000 for most violations. However, MSHA can also issue citations and orders based on an operator's unwarrantable failure to comply with a safety standard, which result in minimum penalties of $2,000 or $4,000. Additionally, MSHA can assess penalties up to $242,000 if the agency determines that the violation meets its criteria for a flagrant violation.

Opportunity for Review: Both agencies allow companies to contest safety violations and proposed civil penalties through an administrative review process. Many companies decide to contest citations to avoid significantly higher future penalties based on "repeat" violations of the same standard. Timely contesting citations is important to ensure that the company's right to contest is preserved. S.C. OSHA offers an opportunity for an employer to work out a settlement agreement during an informal conference, or an employer must send written notice of its intent to formally contest the citation within 20 calendar days after receipt of the citation. Similarly, a mining company may request an informal conference within 10 days after receipt of a citation and must formally contest a citation within 30 days of issuance (or within 30 days after receiving the proposed penalty).

One important difference between the two agencies is that S.C. OSHA must prove that the company had knowledge of the violation, whereas MSHA is a strict liability statute and MSHA need not prove that the mine operator knew, or even should have known, that a regulation was violated in order to assess a civil penalty. This difference is highlighted by the availability of the "unpreventable employee misconduct" defense. An employer hoping to take advantage of this defense to an OSHA violation must demonstrate that the company: (1) established a work rule adequate to prevent the violation; (2) effectively communicated the rule to employees; (3) established methods for discovering violations of work rules; (4) lacked knowledge of an isolated violation of the work rule; and (5) established effective enforcement of the rule when violations are discovered. For example, a company may be able to prove the defense if the company has a work rule requiring workers to wear hard hats, effectively communicates the rule to its employees, trains supervisors to correct violations and discipline violators, but yet fails to catch an isolated incident where an employee does not wear a hard hat. Unfortunately, mining companies are generally unable to present this defense, even if they take all of the precautions listed above.

Dealing with workplace injuries

Since OSHA and MSHA were created, workplaces have certainly become much safer. However, employers today are motivated to protect their employees from injury for a variety of reasons, including minimizing workers' compensation premiums, avoiding wrongful death lawsuits and (most importantly) a genuine corporate culture of safety. Compliance with OSHA and MSHA standards can help companies avoid costly workplace injuries and reduce exposure to civil penalties.

So, what do you do when you get that call at 3 a.m.? As you can probably guess by now, it depends on which client has called you. S.C. OSHA requires employers to report a fatality or a catastrophe (resulting in hospitalization of three or more workers) within eight hours. MSHA requires employers to "immediately" report (within 15 minutes) a fatality, an injury which has a reasonable potential to cause death and other serious "accidents." Failure to timely report a fatality or serious accident can subject your client to additional civil penalties.

Originally published by Employment & Labor Law Fall Newsletter.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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