What new rule did OSHA issue this month? Worker safety rulemaking 101, Part 1

I recently heard an individual who works on Capitol Hill describe the kinds of questions he receives from congressional offices. One that made me laugh out loud was:

"What new regulations did OSHA issue this month?"

This month? Entire years go by without a single new worker safety regulation, and those that are issued typically address hazards in just a handful of industries. In the last 10 years, OSHA has issued six major rules. The most recent, published in May 2011, was a safety standard that will affect less than 3,000 worksites, mostly commercial fishing vessels, shipyards and towing/tugging services. To put the rule's impact on employers in perspective, those 3,000 sites represent 0.03 percent of the 9 million workplaces across the U.S.

The congressional aide's question suggests a misunderstanding by some on Capitol Hill, and probably in the country at large, about the rarity of new federal worker safety regulations. It also tells me that a tutorial may be helpful on the how new federal worker safety regulations are put in place. The process often takes five or more years, frequently spanning more than one Presidential Administration.

Background. One of the reasons the federal worker safety law was passed in 1970 was businesses were encountering different sets of rules in each State they operated in. One federal law would offer the regulatory consistency some large companies desired.

The Occupational Safety and Health Act of 1970 (OSH Act), specifically Section 6, authorizes OSHA to issue standards for work-related safety and health hazards. Generally, safety hazards are those that can cause immediate death or injury, such as explosions and amputations, while health hazards may cause adverse affects over a period of time, such as exposure to excessive noise, repetitive motion, metals and other toxins.

OSHA rulemaking is a public process. The OSH Act requires the agency to follow public notice and comment procedures similar to those contained in Section 4 of the Administrative Procedure Act (5 U.S.C. 553). In addition to soliciting specific input, data, and comments from the public, the OSH Act requires the agency to conduct a public hearing on a proposed standard when an interested party requests it. Typically, OSHA's public hearings are conducted over several weeks and are overseen by an administrative law judge. Participants have the right to cross-examine agency officials and other witnesses, a process unique among most federal agencies. Following the public hearing, OSHA's rulemaking record remains open for a specified period of time to allow hearing participants to submit additional information or clarify their positions.

For the three most recent final rules issues by OSHA (excluding those adopted because of a court decision), the time elapsed from publication of the proposal, through the public comment period and revisions to the rule, to publication of the final rule was at least 2 1/2 years (i.e., electrical standards (April 2004 to Feb 2007); cranes and derricks (Oct 2008 to July 2010; working conditions in shipyards (Dec 2007 to May 2011.) That's just the time period from proposed to final rule. Often several years may pass as the initial proposal is developed.

Legal criteria for setting new health or safety standards. The legal criteria used by OSHA in setting new health and safety standards are based on provisions in the OSH Act, judicial interpretations, and policies implemented in response to court decisions. For standards that address toxic materials or harmful physical agents, the law requires OSHA to:

set the standard which most adequately assures, to the extent feasible, on the basis of the best available evidence, that no employee will suffer material impairment of health or functional capacity even if such employee has regular exposure to the hazard dealt with by such standard for the period of his working life; and adopt the most protective standard that employers can feasibly achieve.

For safety standards, the law requires OSHA to:

set the standard must substantially reduce a significant risk of material impairment or harm; and employ the most cost-effective means of achieving its protective goal.

The burden is on OSHA to meet these requirements. At the end of the rulemaking process, any interested party who does not believe that the agency has done so may, within 60 days, file a petition for review of the new rule in the U.S. Court of Appeals. This has often been the final step in many OSHA rulemakings. But, let's start from the beginning. Here are the major steps in the OSHA rulemaking process (see also this two-page flowchart.)

A worker safety issue emerges. OSHA may recognize the problem on its own, or it may be brought to the agency's attention by another agency or an interest group. Not all worker safety issues are solved by a regulation, and OSHA has a good deal of discretion in deciding whether or not a new regulation is needed. A preliminary step for the agency is assembling the evidence to determine the need for a new rule. If the assistant secretary of labor for OSHA decides that a new regulation may be the proper course of action, the agency needs to prepare a number of different documents.

Drafting proposed regulatory text. One essential step in the rulemaking process is deciding and describing what an employer may be asked to do to address the occupational hazard. Those ideas are outlined in the draft regulatory text. This document may be prepared by OSHA staff, or the agency may convene a federal advisory committee or a negotiated rulemaking committee, made up of interested parties and technical experts, to tackle that task. Some rules are prescriptive:

"An employer shall ensure that each affected employee wears a protective helmet [hardhat] when working in areas where there is a potential for injury to the head from falling objects." (29 CFR 1910.135)

Others provide guidance but leave it up to the employer to decide how to meet the standard's objective. An OSHA standard for workers who use forklifts, for example, requires employers to implement a training program based on the general principles of safe truck operation. OSHA does not specify the amount of time that must be spent on the training or the methods that must be used to train workers.

Depending on the complexity of the hazard(s) being addressed by the OSHA rule, the regulatory text may be quite detailed. I've heard some employers say they want OSHA standards to be prescriptive so they know exactly what they are expected to do. Others say they don't want the government micromanaging their operation; just tell them what is expected and they'll figure out how to get it done. By reviewing the regulatory text for any one final OSHA standard (here, here, or here,) you may be able to imagine the time spent by staff writing and revising it based on feedback from interagency reviewers and the Labor Department's top political leadership.

Determining economic and technological feasibility. Before a new OSHA rule is proposed, the agency must determine whether the requirements it expects employers to follow are feasible. The federal courts have determined that OSHA does not have to prove the rule is feasible for all firm at all times in all jobs, (United Steelworkers v. Marshall (1980)) but rather, that the typical firm will be able to make engineering and work practice changes to comply with it. A new OSHA standard would not be considered feasible if it was "prohibitively expensive," (Ind Union Dept v. Hodgson (1974)) but it would be feasible

"if the costs it imposes do not threaten massive dislocation to, or imperil the existene of, the industry." (Am Iron & Steel Inst. v. OSHA (1991))

Determining impact on small entities and businesses. Under the Regulatory Flexibility Act (enacted in 1980, amended 1994) OSHA is required to assess whether the proposed rule will have a significant direct or indirect economic impact on a substantial number of small entities. This assessment must include:

a description of the kind and number of small entities potentially affected by the rule;

the projected reporting, record-keeping and compliance requirements;

a description of other federal rules that may duplicate, overlap, or conflict with the proposed rule; and

a description of reasonable regulatory alternatives considered that would minimize impact on affected small entities.

In addition, before a rule is proposed. OSHA is one of only two agencies (the other is EPA) that must coordinate with the Small Business Administration (SBA) and convene a panel of small employers to review the draft proposed regulation and the agency's feasibility analyses. A small employer means one with fewer than 500 employees and/or less than $750,000 in annual revenue. A written report of all the comments made and concerns raised by the small business panelists must be prepared within 60 days, and OSHA is required to amend, if necessary, its regulatory flexibility analysis based on what it learned from the small businesses.

Estimating paperwork burden. OSHA is required to estimate the amount of time employers or their staff would spend on paperwork related to the new regulation, including reviewing instructions, gathering and maintaining data, and completing required forms, such as training records or a written safety plan.

Estimating the cost of compliance. OSHA uses the best available data to determine the capital investment that firms likely to be affected by the new rule will have to spend on plant, equipment, materials, and personnel.

Determining cost effectiveness OSHA examines the regulatory alternatives to identify which one provides the greatest level of protection for workers, that the scientific and economic evidence supports, at the lowest possible cost.

Estimating benefits. OSHA estimates the gains and savings to employers and workers by complying with the proposed rule. The benefits are typically expressed as lives saved, and injuries and illnesses avoided. For example, when OSHA proposed a health standard in 1989 to protect healthcare and other workers from exposure to bloodborne pathogens, one of the benefits OSHA identified was reduction in occupational exposure to Hepatitis B (HVB). The agency estimated that the rule, if enacted, would prevent annually an estimated 9,221 to 9,977 cases of HVB and 205 to 222 deaths.

Conducting peer review of influential scientific information. During the GW Bush Administration, the Office of Management and Budget (OMB) issued instructions to federal agencies requiring them to convene an independent panel of reviewers to evaluate the data, models, technical information or other factual inputs used by the agency in its policy decisions, including in proposed rules. Despite the controversy and concerns expressed by the public interest community about this directive (here, here, here) the Obama Adminstration has kept it in place.

OSHA's most recent regulatory agenda indicates that two supporting documents for draft proposed rules are scheduled for peer review: a risk assessment on occupational exposure to food flavoring agents containing diacetyl (here) and an economic analysis on prevention methods to reduce workers' exposure to beryllium (here).

Reviews, revisions and approval (or not) by Labor Department. All of the analyses and documents listed above will go through a series of reviews and revisions by Labor Department staff, including attorneys with the Solicitor of Labor's office. The objective is to have all of these materials finalized and ready for the public to review during a formal comment period. If the OSHA assistant secretary or other senior officials in the Labor Department, including the Secretary of Labor, have concerns about the draft proposal, they could postpone further action or halt it altogether. Despite the time and resources invested in the effort to-date, OSHA is not compelled to act (unless, of course, there is a court or congressional order to do so.) It is not unusual, for example, when a Presidential Admininstration changes, that OSHA's regulatory priorities change as well.

If OSHA's assistant secretary and the senior Labor Department officials decide proposing a new rule is in order, there are a few more steps to take before the public comment period can begin. The assistant secretary has to decide whether the draft proposed rule meets criteria establishing in Executive Order 12866, a 1993 directive on regulatory planning and review. Under EO 12866, if an agency has a significant regulatory action planned, the agency must submit it to the White House's Office of Information and Regulatory Affairs (OIRA) for review.

Part 2 of this post will define a "signficant regulatory action," describe what can happen when OSHA's draft proposal rule package is at OIRA, and explain how a proposed rule becomes a final one.