Heads up if you administer a workplace safety incentive program or have a post-incident drug and alcohol testing policy – OSHA has just done an about face. Two-plus years ago on May 12, 2016, OSHA published a final rule that added a provision to 29 CFR §1904.35 prohibiting employers from retaliating against employees for reporting work-related injuries or illnesses. It sounded simple enough. The kicker, however, was in the preamble to the final rule and post-promulgation interpretive documents in which OSHA opined that certain broadly-applied, post-incident drug and alcohol testing policies and safety incentive programs could discourage employees from reporting work-related injuries and illnesses and could therefore be a violation of the amended regulation.
OSHA recently backed off its 2016 interpretation. On October 11, 2018, OSHA issued a memorandum to Regional Administrators clarifying the department’s position that §1904.35 does not prohibit workplace safety incentive programs or post-incident drug testing:
The Department believes that many employers who implement safety incentive programs and/or conduct post-incident drug testing do so to promote workplace safety and health. In addition, evidence that the employer consistently enforces legitimate work rules (whether or not an injury or illness is reported) would demonstrate that the employer is serious about creating a culture of safety, not just the appearance of reducing rates. Action taken under a safety incentive program or post-incident drug testing policy would only violate 29 C.F.R. §1904.35(b)(1)(iv) if the employer took the action to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health
Notably, the memorandum supersedes all previous interpretive guidance on the topic stating that “to the extent any other OSHA interpretive documents could be construed as inconsistent with the interpretive position articulated here, the memorandum supersedes them.” This includes previous memorandums to OSHA Regional Administrators and guidance on OSHA’s website.
OSHA’s revised position on the legality of rate-based incentive programs is both practical and manageable. The memorandum begins by recognizing that many employers have incentive programs that are rate-based and reward employees with a prize or bonus at the end of an injury-free month or evaluates managers based on their work unit’s lack of injuries. It goes on to generally endorse these types of programs as an important tool to promote workplace safety and health and concludes with some practical guidance. The following is an excerpt:
Rate-based incentive programs are also permissible under §1904.35(b)(1)(iv) as long as they are not implemented in a manner that discourages reporting. Thus, if an employer takes a negative action against an employee under a rate-based incentive program, such as withholding a prize or bonus because of a reported injury, OSHA would not cite the employer under §1904.35(b)(1)(iv) as long as the employer has implemented adequate precautions to ensure that employees feel free to report an injury or illness.
A statement that employees are encouraged to report and will not face retaliation for reporting may not, by itself, be adequate to ensure that employees actually feel free to report, particularly when the consequence for reporting will be a lost opportunity to receive a substantial reward. 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.
For example, the memorandum suggests that any inadvertent deterrent effect of a rate-based incentive program on employee reporting would likely be counterbalanced if the employer also incorporates elements such as::
- 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 emphasizes the employer’s non-retaliation policy;
- a mechanism for accurately evaluating employees’ willingness to report injuries and illnesses.
Post-Incident Drug and Alcohol Testing:
Equally helpful to employers, the memorandum also specifically addresses post-incident drug and alcohol testing policies and iterates that “most instances of workplace drug testing are permissible.” Examples of permissible drug testing set out in the memorandum include:
- Random drug testing.
- Drug testing unrelated to the reporting of a work-related injury or illness.
- Drug testing under a state workers’ compensation law.
- Drug testing under other federal law, such as a U.S. Department of Transportation rule.
- Drug testing to evaluate the root cause of a workplace incident that harmed or could have harmed employees. If the employer chooses to use drug testing to investigate the incident, the employer should test all employees whose conduct could have contributed to the incident, not just employees who reported injuries.
Practically speaking, what this means is that employers are no longer required to first determine if there is a “reasonable possibility” that drugs or alcohol were involved in a workplace incident as suggested when the final rule was enacted, but may proceed directly to post-incident drug and alcohol testing so long as all employees who could have contributed to the incident are tested.
The Bottom Line For Employers
The memorandum should be welcome news for employers and HSE managers. While OSHA continues to prohibit penalizing or retaliating against employees who report work-related injuries and illnesses, there is now substantially less ambiguity surrounding what constitutes retaliation and what does not in the context of workplace safety incentive programs and post-incident drug and alcohol testing policies.