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Safety Incentive Programs | What OSHA Wants You to Know

Does your workplace safety program include an incentive structure? Employers have been using them for years to encourage safe behaviors and reduce violations, injuries and accidents, but recent Occupational Safety and Health Administration (OSHA) memos have left employers confused about the compliance points related to these programs.

Using an incentive structure within your safety program can have many benefits. In addition to creating a safer work environment, it can encourage co-worker cooperation when employees are incentivized to work together toward a common safety goal. Employers also get the opportunity to focus on positive rewards rather than negative consequences for specific behaviors. For those concerned about angering and losing qualified employees in a tight labor market, a safety incentive structure can be a valuable tool. Whether you already use safety incentive programs or plan to implement one, it’s important to clearly understand OSHA regulations.safety incentive programs

Safety Programs Receive Warning
In March 2012, OSHA issued a memo detailing the potential illegalities of safety incentive programs which can discourage employees from reporting injuries. This memo, as well as other instructions issued, did not provide clear guidance to OSHA compliance officers or to employers and prompted many employers to simply end the safety incentive programs they had in place.

OSHA Update
In October 2016, OSHA published another memo that, in part, clarified how incentive programs and any potential disincentives that suppressed employee injury reporting would be evaluated during an audit. The relevant section of this memo addressed the following points:

  • While safety incentive programs are allowed, adverse actions against employees for reporting injuries are not. Even withholding a benefit (i.e., cash prize or award) due to a reported injury could violate section 1904.35(b)(1)(iv) if it’s proved that the withholding dissuaded a reasonable employee from reporting a work-related injury.
  • Penalizing an employee for reporting a work-related injury or illness without regard to the circumstances is not objectively reasonable and not a legitimate reason for taking adverse action against the employee.
  • Conditioning a benefit on compliance with legitimate safety rules or participation in safety-related activities does not violate section 1904.35(b)(1)(iv).

The memo provided the following example to illustrate these points:

Imagine an employer promised to raffle a $500 gift card at the end of each month in which no employee sustains an injury that requires the employee to miss work. If the employer cancels the raffle simply because an employee reported a lost-time injury without regard to the circumstances of the injury, it would likely violate section 1904.35(b)(1)(iv) because it would constitute adverse action against an employee simply for reporting a work-related injury.

However, if the raffle was based on employees universally complying with legitimate workplace safety rules (such as using required hard hats, wearing fall protection and following lockout-tagout procedures), then it would not be in violation. Likewise, rewarding employees for participating in safety training or identifying unsafe working conditions would be acceptable.

OSHA wants employers to find creative ways to incentivize safe work practices and accident-prevention measures that do not unfairly penalize those who report work-related injuries / illnesses. Failure to comply could result in a citation under section 1904.35(b)(1)(iv).¹

What Can You Do?
Safety goals and incentive criteria should not be confused. Goals can and should include the reduction or elimination of work-related injuries, improving injury rates overall and saving money. Incentive criteria needs to be a little more creative and not be tied directly to injuries. A few examples of acceptable incentive criteria include:

  • Safety inspections were all completed on time
  • All employees submitted a safety suggestion
  • Employee safety training was current
  • No safety infractions were reported over a certain period of time
  • There were no vehicle accidents in the shop
  • Your safety program plays a vital role in your business.

A little creativity and a well-designed incentive structure could bring positive attention to this effort and help maintain a safer workplace. We encourage you to regularly assess your program and seek professional guidance to ensure OSHA compliance.

¹ Interpretation of 1904.35(b)(1)(i) and (iv) Memorandum. October 19, 2016. United States Department of Labor website. Accessed on March 6, 2017 at https://www.osha.gov/recordkeeping/finalrule/interp_recordkeeping_101816.html

This article originally appeared in the 2018 | ISSUE ONE of the SilverLink magazine, under the title “Safety Reward Programs | What OSHA Wants You to Know” To receive a complimentary subscription to the SilverLink magazine, sign up here.

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