Saving money or saving lives — what’s your motivation?
October 12, 2011 by Jim BurgerPosted in: Compliance, cost of safety, enforcement, In this week's e-newsletter, inspections, Investigations, Latest News & Views, OSHA news, safety incentives, Uncategorized
PDF Like Sammy Hagar, you may not be able to drive 55. But no matter how quickly you’d like to get where you’re going, chances are you’ll stay well under 100 the next time you’re on the open road. The question is why.
Assistant OSHA head Jordan Barab recently told a NIOSH-sponsored symposium about a hefty speeding ticket he once got. The experience made him lighten up on the pedal, he said.
His point: Enforcement is an important tool. And if OSHA had the power to slap bigger fines on offending companies, you’d see safer workplaces.
But Barab admits there’s no way of knowing for sure — that there’s been little research on the subject.
Which brings us back to the original question: Is your decision not to treat the daily commute like the Daytona 500 influenced more by your concern about a whopping speeding ticket, or by your desire to arrive alive?
Gabrielle Sigel, a Chicago-based lawyer who specializes in workplace health and safety, points out that injury rates have continued to fall while penalty rates have stayed steady.
The vast majority of employers, she says, are motivated by something other than penalties. They’re concerned about answering to their employees and their shareholders, their bottom line and “answering to their own conscience.”
Penalties make a difference, she says, but they’re not the primary driver.
Rick Kaletsky, a consultant and former OSHA compliance officer, points out that repeat penalties can be costly, because they can lead to lost business, especially for contract companies.
But Wayne Gray, an economics professor who’s studied the impact of fines, says companies who are penalized often respond by going beyond the legal requirements. They begin looking for other hazards to fix, indicating that they’re concerned about much more than avoiding fines.
What do you think? Would the threat of larger OSHA fines result in safer workplaces?
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October 12th, 2011 at 3:49 pm
Fines are not the motivator. A much larger monetary motivator is the reduction in W/C Payments and Premiums.
Companies do it because they 1) Care about their employees. 2) Bad safety is bad publicity 3) It makes economical sense from direct and indirect costs assosciated with injuries
October 18th, 2011 at 7:56 am
OSHA is way off base if they think their “fines” are the primary motivating tool for employers, or that laregr ones will be “more motivating”. There are several far more important issues, most of which were touched on in the article itself:
1. Shareholders - many shareholders care about the performance of the companies they invest in, and we al lknow that nothingn motivates the mangement of publically-owned companies like stock price performance.
2. Other stakeholders - clients, community, even other regulators (besides OSHA) - all can have an effect on winning and performing work, which translates to the bottom line far more significantly than and fines ever will. In this sense, receipt of citations, their severity, are the biggest drivers since they effect winnign work - the monetary penalties are ancillary.
3. Insurance Carriers (Comp, GL, etc.) - what you pay is directly influenced by how you perform (and often how well the insurer feels you comply). And annual insurance costs are much larger than most fines, even in the most egregious and willful of cases.
4. Reputation - most companies want to be perceived in a positive light by all stakeholders. Citations and poor performance don’t garner good publicity, and so are to be avoided at all costs.
The point: OSHA needs to stop flattering itself that it’s the sole or main driver of workplace safety. The OSHA standards are a compliance bar sure, but it’s other people’s judgement of how well you meet that bar and their preception of the results you get from doing it that are the real drivers. In fact, IMHO, larger fines could even negatively affect compliance in that companies may become less cooperative and be more inclined to fight OSHA through legal channels about citations if the fines get too hefty, instead of working with them to resolve. Nothing good is ever likely to come out of any situation in which lawyers get involved!
October 18th, 2011 at 10:29 am
Well Said Bob-especially your point! OSHA is not the motivator in our company for safety-it is a top down commitment to not hurting the people we hire to work. OSHA is a hinderance in that they are $$$ driven not safety driven.
October 18th, 2011 at 11:26 am
Having worked for a regulatory agency (not OSHA) I know that when businesses can get penalties mitigated to nothing or when penalties are small enough to be considered a cost of doing business then nothing changes. But, more than the size of the penalty is the chance of being caught. If inspections are rare enough and the samples examined small enough, many businesses will simply play the odds. Plus, bad regulations don’t get changed unless they are onerous enough to inspire people to complain.