Guidance On Incentive Programs

Last month, we relayed information from OSHA about how the new recordkeeping rule could potentially affect employers’ existing disciplinary programs. The clarification has been very helpful to employers in evaluating their own programs and identifying areas that may need to be revised.

However, many employers are still struggling with assessing modifying their programs to be compatible with the new provision related to incentive programs.

Below is some additional guidance from OSHA in the form of real world scenarios and guidance for what constitutes a violation, and what does not.

Clarification On Injury Tracking and Use of Incentive Programs

This statement comes directly from OSHA; read more here.

“The rule does not ban appropriate incentive programs as described below.

However, it allows OSHA to issue citations for retaliatory actions against workers when these programs are used to discourage workers from exercising their right to report workplace injuries and illnesses. Employers should review their reporting procedures, programs, and policies for elements that may result in retaliatory actions against an employee for reporting an injury or illness.”

Incentive Programs

This information comes directly from OSHA; read more here.

“This rule does not prohibit incentive programs. However, employers must not use incentive programs in a way that penalizes workers for reporting work-related injuries or illnesses. If an employee reports an injury or illness, and is subsequently denied a benefit as part of an incentive program, this may constitute retaliatory action against the employee for exercising his or her right to report an injury or illness.

Incentive programs should encourage safe work practices and promote worker participation in safety-related activities. Employers should consider programs that reward:

• Worker participation in safety program activities and evaluations;
• Worker completion of safety and health training;
• Reporting and responding to hazards and close calls/near misses;
• Safety walkthroughs and identification of hazards during safety walkthroughs/inspections;
• Conformance to planned preventive maintenance schedules;
• Compliance with legitimate workplace safety rules.

Below are example scenarios of incentive programs and how the new rule may be interpreted to apply:

Scenario 1: Employer informs its employees that it will hold a substantial cash prize drawing for each work group at the end of each month in which no employee in the work group sustains a lost-time injury. Employee X reports an injury that she sustained while operating a mechanical power press. Employee X did not violate any employer safety rules when she sustained her injury. Employee X’s injury requires her to miss work for two days. Employer cancels the cash prize drawing for that month for Employee X’s work group because of Employee X’s lost-time injury.

Question: Did Employer violate 1904.35(b)(1)(iv) when it cancelled the cash prize drawing for Employee X’s work group because of a lost-time injury that was sustained while Employee X was following the employer’s work rules?

Answer: Yes. Cancelling a substantial cash prize drawing solely because an employee was injured and reported the injury, without regard to the circumstances surrounding the injury, would likely violate section 1904.35(b)(1)(iv). In this case, the employer retaliated against the employee (by cancelling a substantial cash prize drawing) because the employee engaged in protected activity (reporting her injury to the employer). This type of activity may also discourage reporting because a worker may feel pressure from coworkers not to cancel the drawing, or may be reluctant to report out of loyalty to those coworkers.

Scenario 2: Employer informs its employees that it will hold a substantial cash prize drawing for each work group at the end of each month in which all members of the work group comply with applicable safety rules, such as wearing required fall protection. Employee X sustains a lost-time injury when he falls from a platform while not wearing required fall protection, and he reports the injury to Employer. Employer cancels the cash prize drawing for Employee X’s work group that month because Employee X failed to wear required fall protection. Employer actively monitors its workforce for compliance with applicable work rules and cancels the cash prize drawings when it discovers work rule violations regardless of whether the employee who violated the work rule also reported an injury.

Question: Did Employer violate 1904.35(b)(1)(iv) when it cancelled the cash prize drawing for Employee X’s work group because Employee X failed to wear required fall protection?

Answer: No. In this case, Employer cancelled the cash prize drawing because Employee X violated a legitimate work rule, not because he reported a work-related injury. OSHA encourages employers to enforce legitimate workplace safety rules by monitoring for compliance with those rules and taking consistent, appropriate corrective action when violations occur whether or not the employee who violated the rule also reported an injury.

Scenario 3: Employer informs its employees that it will hold a substantial cash prize drawing for each work group at the end of each month in which all members of the work group comply with applicable safety rules, such as wearing required fall protection. Employee X sustains a lost-time injury when he falls from a platform while not wearing required fall protection. Employer cancels the cash prize drawing for Employee X’s work group that month ostensibly because Employee X failed to wear required fall protection. However, Employer’s employees routinely fail to wear required fall protection but the only time Employer cancels the cash prize drawing is when an employee reports an injury.

Question: Did Employer violate 1904.35(b)(1)(iv) when it cancelled the cash prize drawing for Employee X’s work group because Employee X failed to wear required fall protection?

Answer: Yes. This is an example of a pretextual disciplinary action, which is prohibited. Although Employer ostensibly took the adverse action because Employee X violated a legitimate work rule, Employer failed to take the same action when other employees violated the same work rule without reporting an injury. Employer treated employees who engaged in the same unsafe conduct differently based on whether they reported an injury to the employer, which indicates that the real reason Employer took the adverse action against Employee X was because of the injury report, not because of the work rule violation.

Scenario 4: Employer holds a party for all employees who complete a safety training course. Employee X failed to attend the training because she was absent from work due to a work-related injury that she reported. Employer excluded Employee X from the training-completion party because she did not complete the training. Employer consistently excluded all employees who failed to complete a training course from the training-completion party regardless of why they failed to complete the training, including those who were on vacation or absent because of a non-work-related injury or illness.

Question: Did Employer violate 1904.35(b)(1)(iv) by excluding Employee X from the party?

Answer: No. In this case Employer excluded Employee X from the party because Employee X did not complete the safety training, not simply because Employee X reported a work-related injury. OSHA encourages employers to celebrate workplace safety achievements such as completing safety training and complying with legitimate workplace safety rules.”

Safety Consulting Companies Can Evaluate Your Incentive Programs

Like with the guidance on disciplinary programs, the clarification on incentive programs is promising, and will help employers properly interpret and implement the recordkeeping rule’s anti-retaliation provisions.

OSHA safety consulting companies like Optimum Safety Management can help you evaluate your incentive programs and make any necessary updates to ensure they meet OSHA’s requirements. Contact us at 630-759-9908 for your free consultation.