No one is exactly sure who first stated the truism that “No good deed goes unpunished,” but almost everyone can relate an experience that proves the validity of the adage. Recent Occupational Safety and Health Administration (OSHA) guidance to its field compliance officers and whistleblower investigative staff certainly fits this category.

Companies that deal out incentives — like pizza parties, gift cards, or bonuses — that reward employees for achieving various injury-free milestones may now find themselves on the wrong side of OSHA regulation enforcement.

The fear is that these kinds of incentive programs could cause employees not to report injuries, and one could see how that is certainly possible. However, as some have pointed out, the line between an incentive that would cause an employee to conceal an injury and a legitimate “pat on the back” for maintaining workplace safety can be rather subjective.

Background

Before we turn OSHA into a villain here, the administration didn’t initiate this increased scrutiny of workplace safety incentive programs. The Government Accountability Office (GAO) issued a report in April 2012 entitled “Better OSHA Guidance Needed on Safety Incentive Programs,” and OSHA merely responded to GAO suggestions. Further, the GAO report was originally prompted by a request from Congress.

Concern arose in Congress after the March 2005 explosion at the BP Texas City refinery, which killed 15 workers and injured 180 more. An incentive program was in place at the refinery that tied bonuses to low rates of injuries and illnesses.

The GAO looked at various studies that attempted to evaluate the problem, although the studies weren’t very conclusive. The group also talked to professionals from industry, state, and federal health agencies, academia, the legal system, consulting firms, and unions.

The GAO was seeking to compare incentive programs that reward periods of time logged without health and safety incidents to “behavior-based” programs, which for example would reward employees for participating on safety committees, reporting incidents, or suggesting improvements.

It seems like the GAO’s call for more OSHA guidance on safety incentive programs is due to what they heard from the professionals rather than the academic studies they looked at:

“Little conclusive academic research exists on whether safety incentive programs and other workplace safety policies affect workers’ injury and illness reporting, but several experts stated that rate-based programs may discourage injury and illness reporting. Of the 26 studies of workplace safety we reviewed, we identified 6 that evaluated the effect of safety incentive programs on workplace safety, but only 2 of these studies specifically evaluated the programs’ effect on reporting of injuries.”

During interviews with the various experts, many singled out the possibility for negative peer pressure. For example, if a minor injury occurred in a work team when the entire group was close to receiving some kind of reward, there could be pressure from coworkers to keep quiet about the incident.

It is interesting to note that the GAO report also discusses policies that require drug and alcohol testing after an injury occurs. One study addressed that specific situation and found that minor injuries may go unreported when policies require mandatory drug and alcohol testing.

OSHA response

OSHA was quick to respond to the GAO’s report with a memo to regional administrators and whistleblower program managers from Deputy Assistant Secretary Richard E. Fairfax. Fairfax said that employee health and safety incentive programs could intentionally or unintentionally motivate employees to not report injuries.

“For example, an employer might enter all employees who have not been injured in the previous year in a drawing to win a prize, or a team of employees might be awarded a bonus if no one from the team is injured over some period of time. Such programs might be well-intentioned efforts by employers to encourage their workers to use safe practices,” Fairfax wrote.

However, Fairfax did encourage employers to pursue “incentives that promote worker participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents, or ‘near misses.'” These might including recognition parties given after successfully completing a company-wide health and safety training program, T-shirts for members of safety committees, or small cash awards for suggesting ways to improve workplace safety or employee health.

An overview of the situation written by the labor law firm of Fisher & Phillips, LLP, points out that OSHA’s increasing focus on incentive programs is part of an evolution that has been steadily elevating the importance of whistleblower enforcement by OSHA inspectors. They point out that the Office of Whistleblower Protection Programs now reports directly to the assistant secretary of Labor, who heads up OSHA. This and other moves “have caused observers to question why OSHA is emphasizing whistleblower claims….”

Employer considerations

The Fisher & Phillips report suggests several questions employers need to answer for themselves, including:

• Should recordable injuries be included among factors in an incentive program?
• What role, if any, do recordable injuries have in determining the effectiveness of safety management systems and employee incentive programs?
• Is it legal to include recordable injuries in addition to other factors — quality, productivity, etc. — when awarding bonuses?
• Has upper level management reviewed bonus programs to be certain that they do not discourage injury reporting?

It is also a good time to review the goals of OSHA’s Whistleblower Protection Program, which is to provide employees protection against discrimination when they report violations of various “workplace safety, airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health insurance reform, motor vehicle safety, nuclear, pipeline, public transportation agency, railroad, maritime, and securities laws.”

This discrimination can take many forms including the loss of one’s job, demotion, disciplining, intimidation, reassigning, reduction in pay or hours, blacklisting, or denial of overtime, just to list some of the possibilities.

As outlined in our white paper, “Why Ethics Hotlines are Considered a Best Practice,” retaliation prevention is one of the major benefits of establishing an anonymous, third-party whistleblower hotline for your organization. It is easy to see how such a hotline will help management deal with many of the concerns that OSHA has regarding the reporting of injuries and safety issues.

Moving forward, it will be important to watch how OSHA inspectors enforce the points outlined in the Fairfax memo. In the coming years, will companies be handing out gift cards to award employees for “one year with no injuries” or mugs imprinted with “Proud Safety Committee Member”?

1 GAO Report to Congressional Requestors, WORKPLACE SAFETY AND HEALTH: Better OSHA Guidance Needed on Safety Incentive Programs, April 2012, page 7.