OSHA Updates General Industry Personal Fall Protection and Walking-Working Surfaces Standards

Special thanks to my colleague, Diana Neeves, for her contributions to this post.  Diana is an attorney in our Environmental & Utilities Group.

At the end of last week, OSHA issued its long-awaited final rule on walking-working surfaces and personal fall protection systems for general industry.  The new rule is intended to update the standards to align with general industry practice, consensus standards, and, in many respects, standards for the construction industry.  It provides employers greater flexibility in fall protection by permitting selection from a variety of fall protection measures based on the circumstances.

Guardrails and toeboards are no longer the preferred fall protection measure when workers are working four feet or more above a lower level.  Instead, employers may choose from a variety of fall protection measures, depending upon the particular circumstances and activities, such as:

  • Guardrail system: a barrier, such as a railing, placed along the edge of a walking-working surface, intended to prevent workers from falling.
  • Safety net system: a netting system placed beneath the work area, intended to catch falling workers before they hit the ground or another lower level structure.
  • Personal fall arrest system: a combination of equipment used on one’s person to arrest or stop a fall, such as a body harness, anchorage, and connector. Body belts may not be used as part of a personal fall arrest system.
  • Positioning system: a supportive system of equipment used with a body belt or harness that allows one to work on an elevated vertical surface, such as a window, with both hands free.
  • Travel restraint system: a combination of equipment used on one’s person, intended to prevent a worker from going over an unprotected edge of a walking-working surface.
  • Ladder safety system: a system attached to a fixed ladder, intended to prevent workers from falling, typically comprised of a carrier, safety sleeve, lanyard, connectors, and body harness.

The final rule also consolidates and streamlines the standards for ladders into one section that addresses both general requirements for all ladders and type-specific ladders requirements. In addition, the use of Rope Descent Systems (RDS) is codified for the first time in the general industry.  The rule imposes a 300-foot height limit for the use of RDS and requires building owners to certify in writing that their RDS meets OSHA standards.

The final rule, which becomes effective on January 17, 2017, is expected to prevent 29 fatalities and 5,842 workplace injuries each year.

OSHA Issues Recommended Practices for Safety and Health Programs

 

Thank you to my colleague, Tavo True-Alcala, for his contributions to this post. Tavo is an analyst in our Environmental & Utilities Group.

In October, OSHA released its new Recommended Practices for Safety and Health Programs, which were issued to incorporate the experience and advances gained since the previous set of recommendations was released in 1989. Rather than being prescriptive, the recommendations provide guidance on key health and safety strategies that can be implemented in any workplace.

The recommended practices are focused on seven core areas and provide tools and resources to support implementation. The core areas and action items include the following:

  • Management Leadership. Owners, managers, and supervisors should make health and safety a core organizational value and to demonstrate this priority through action items like:
    • Communicating their commitment to health and safety programs;
    • Defining program goals;
    • Allocating resources; and
    • Expecting performance.
  • Worker Participation. Workers have the most to gain or lose from safety and health programs, and have the most knowledge of the potential hazards. For a program to be successful, workers should be:
    • Encouraged to participate in all aspects of the program;
    • Encouraged to report safety and health concerns; and
    • Provided access to safety and health information.
  • Hazard Identification and Assessment. All employers should proactively work to identify and assess all potential workplace hazards and prevent accidents by:
    • Collecting existing information about workplace hazards;
    • Inspecting the workplace for safety hazards;
    • Identifying health hazards;
    • Conducting incident investigations;
    • Identifying hazards from emergency and nonroutine situations; and
    • Characterizing identified hazards, developing control measures, and prioritizing hazards for control.
  • Hazard Prevention and Control. In order to minimize the risk presented by workplace hazards, employers should:
    • Identify control options;
    • Select appropriate controls;
    • Develop and update a hazard control plan;
    • Select controls for nonroutine operations and emergencies; and
    • Follow up to ensure selected controls are effective.
  • Education and Training. All employers should provide proper training to make sure that employees are aware of workplace hazards and can work productively and safely. A good health and safety program should:
    • Provide program awareness training;
    • Train employers, managers, and supervisors on their role in the program;
    • Train workers on their specific roles in the program; and
    • Train workers on hazard identification and controls.
  • Program Evaluation and Improvement. Once a program is established it is wise to:
    • Monitor performance and progress;
    • Verify that the program is implemented and operating; and
    • Correct any shortcomings and identify opportunities for improvement.
  • Communication and Coordination on Joint Employer/Multiemployer Worksites. Communication is increasingly important as more workplaces are shared by regular employees of a host company as well as workers employed by contractors or assigned by staffing agencies. In these situations all parties involved must work together to ensure worker safety, which can be accomplished by:
    • Establishing procedures to communicate safety and health policies and potential hazards before contractors or staffing agencies come on site,
    • Ensuring that contractors and staffing agency workers have a communications plan to provide information to the employer;
    • Including safety specifications in bid documents; and
    • Coordinating with contractors to ensure consistency in safety and health expectations.

OSHA provides a self-evaluation tool for employers to track the progress they make in implementing the recommended action items. OSHA encourages employers to follow these recommendations not only as a way to prevent workplace illnesses and injuries, but also because of the indirect benefits like improved products and service, better employee recruitment and retention, and better morale that such efforts can have in the workplace.

Election 2016:  WOW, Just WOW

I had a blog piece almost done.  It was going to give an overview of another NLRB case which threatened to overturn settled law and expand the rights of unions to organize.  I was going to use it as another “Year of Change” post.

Then the votes got counted.

Wow.

After eight years of ever more progressive employment regulations for manufacturers, we are faced with a new sea of uncertainty.

The Affordable Care Act, Dodd-Frank, the NLRB’s Expedited Election Rule, the DOL’s Revised Persuader Rule, the future of multi-employer pension funds and the DOL’s new overtime regulation (to name just a few):  All up for grabs.

To make matters more challenging, most manufacturers will have to make key compliance decisions within the next few weeks.  They do not have the luxury of waiting until the inauguration of President Trump on January 20.

Let’s just take one example.  As noted in previous posts, on December 1, the DOL’s new overtime regulation takes effect.  Under that new regulation, any employee who makes less than $47,476 must be paid at least minimum wage and time-and-a-half for overtime.  Many employers determined that for cost or other considerations it was easier to pay the increased salary than to convert the employee to an hourly wage rate.  These employers are likely preparing notices right now – today – to advise their employees of the change in pay.

What will the Trump Administration do to that new overtime regulation?  Will President Trump, who campaigned on a pledge to help the American worker, repeal a regulation which increases worker wages?  Will the regulation be altered to exempt non-profits or other industries suffering from economic stagnation?  If the regulation is amended, will those changes to retroactive to December 1 and will the outgoing DOL sit on the sidelines if manufacturers refuse to comply with the new regulation?  If the regulation is repealed or revised, will manufacturers roll back wage increases given to employees when it was in effect?

These are just some of the challenges facing manufacturers today  And today, like most other people in America, I simply do not have the answers.

Complying With Conflict Minerals Laws: Global Best Practices for Manufacturers and Distributors

Last month, I gave a presentation to manufacturers and distributors throughout the United States on Conflict Minerals Laws.   The program was sponsored by the United States Department of Commerce.  These laws attempt to curb the acquisition of certain minerals from a certain part of Africa that are believed to support regional conflicts.

Here are some the key points from my presentation:

  1. The Conflict Minerals laws and regulations are some of the most well known, but least understood laws/regulations that face manufacturers/distributors today.
  2. Although most publicly traded companies have elaborate compliance programs in place, privately held companies must also comply or face commercial pressure from their business partners and potentially sanctions from the U.S. Government. 
  3. There has been litigation that has resulted in a “trap for the unwary” (i.e., whether products need to be described as “conflict free”).  I can provide more details for those interested.
  4. The SEC expected that 6,000 companies would be impacted by the original law, but only 1,281 companies filed the “Form SD” in 2015.   The real question is whether the Government is going to do anything about that discrepancy.  Some companies are pressuring the Government to punish those that are not complying.
  5. For those doing business internationally, manufacturers/distributors need to stay apprised of efforts in the European Union to adopt a similar law (although there are some key differences) and potentially in Japan in the future.

If you would like more information about my presentation, please contact me at jwhite@rc.com.

EPA Turns Up the Heat on Refrigerant Regulation

Special thanks to my colleague, Brian C. Freeman, for this post. Brian is an attorney in our Environmental & Utilities group with a particular focus on air quality.

Refrigeration and cooling systems face expanded and tighter regulation under a final rule recently signed by EPA Administrator Gina McCarthy.  The rule revises and expands EPA’s regulations for “Ozone-Depleting Substances” (ODS), which erode the stratospheric ozone layer that protects the Earth from harmful ultraviolet radiation.

Most ODS are used as refrigerants in industrial process refrigeration (e.g., in chemical, electronics, and food manufacturing), commercial refrigeration (e.g., supermarkets, refrigerated storage, and transport), or comfort-cooling/air conditioning systems. Since the 1990s, the ODS regulations (40 CFR Part 82) have mandated various practices to minimize or prevent the release of refrigerants during operation, maintenance, and disposal of refrigerant-containing equipment, and to maximize refrigerant recapture and recycling. The regulations also require certification of technicians working with ODS systems, and subject to certain exemptions, restrict ODS sales to certified technicians.

But here’s the tricky part: not only does the recently revised rule expand and tighten these requirements for ODS, it also extends them to non-ODS refrigerants used as substitutes for ODS. This extension is based not on the protection of the ozone layer, but on preventing global warming caused by such substitutes. The extension primarily targets hydrofluorocarbons (HFCs), a family of non-ODS refrigerants that have been widely used to replace ODS but have since been found to have significant global warming potential.1

In addition to extending the ODS regulations to non-ODS refrigerants, the recent revisions also include the following:

  • Lowered thresholds for leak repair requirements: Under the existing regulations, the owner or operator of a refrigeration and air conditioning system that contains at least 50 pounds of refrigerant must repair and test the system or retire it when it is found to have leaked beyond certain annualized rates. Here are the existing and revised leak rates thresholds:
Type of equipment Under existing regulations Under revised regulations
Industrial process refrigeration 35% 30%
Commercial refrigeration 35% 20%
Comfort cooling 15% 10%
  • New requirements for leak inspections or automatic detection monitors: Cooling systems that have exceeded the leak rates specified above must now be inspected either quarterly (for industrial process refrigeration and commercial refrigeration systems with a full charge of at least 500 pounds) or annually (for such systems with a full charge of at least 50 pounds but less than 500 pounds, and for comfort cooling systems). These inspection requirements can be avoided by continuously monitoring the system with an automatic leak detector that is audited or calibrated annually.
  • Release reporting for elevated release levels: If a system with a full charge of at least 50 pounds of refrigerant has leaked 125% or more of the full charge in a calendar year, the owner or operator must submit a report to EPA. The report must describe efforts to identify the leaks and repair the equipment.
  • Recordkeeping for refrigerant recovery: Technicians must now keep a record of refrigerant recovered during disposal of refrigerant and cooling systems with a full charge of 5-50 pounds. (This closes a gap in the existing regulations, which had not required such recordkeeping for this size category.)
  • Updated and expanded certification requirements for refrigeration technicians.

The revisions also make extensive organizational and wording changes intended to improve readability.

The rule revisions have not yet been published in the Federal Register, but are scheduled to take effect January 1, 2017. Compliance deadlines for the various new requirements range from January 1, 2017 to January 1, 2019. In the meantime, court challenges to the rule – and particularly EPA’s authority for expanding the rule to non-ODS – seem likely.

Note: EPA will hold a webinar this Wednesday, Nov. 2, 2016, 2:00-3:00 p.m. EDT to brief regulated parties on the revised regulatory requirements and compliance dates. Advance registration is required.

The Future of Technology for Manufacturers

I had the pleasure of moderating a panel at the Connecticut Business & Industry Association (CBIA)’s Annual Manufacturing Summit.  The title of the Panel was “The Future of Manufacturing in Connecticut” and included three experienced manufacturing executives:  William Lee, President & CEO, The Lee Company; Severine Zygmont, President, Biomedical, Oxford Performance Materials, Inc.; and Pedro Soto, CFO, Space-Craft Manufacturing, Inc.

Here are some of the takeaways from the panel:

  1.  3-D Printing:  About two years ago, you could not read an industry article without hearing about 3-D printing.  While plenty of commentators said that it would revolutionize manufacturing, it was not clear when that revolution would arrive.  Two of the three panelists indicated that they use 3-D printing, including in production.  The one panelist that did not use 3-D printing said that he expects that his OEM customers in aerospace will likely be requiring such technology in the future.  Interestingly, one of the panelists mentioned that his company uses the technology as a “defensive mechanism.”
  2. Automation:  One of the big fears of automation is that less workers will be needed in a factory.  Not so, according to the panel.  One of the panelists indicated that his company has done the most hiring for the division that uses automation.  The other main theme was that automation should be used if it makes the process better and not necessarily faster.
  3. Tried-and-True:  I recently visited a manufacturing facility where the “newest” machinery was made in the 1960s.  All three panelists confirmed that a mix of new and old equipment remains necessary particularly if the company is serving the aftermarket.  Interestingly, all three executives confirmed though it often helps from a sales perspective for your customers to see some new equipment on the floor and also helps with employee retention.

General Counsel’s New Standard on Intermittent Strikes, Another Untenable Position for Manufacturers

On October 3, 2016, the National Labor Relations Board’s (Board) Office of the General Counsel (General Counsel) issued a memorandum seeking to broaden a union’s right to engage in intermittent strikes, which it defines as multiple short-term strikes—“a plan to strike, return to work and strike again.” The memorandum addresses the issue because unions have been turning to this tactic more frequently in recent years. By their nature, intermittent strikes can be especially burdensome on employers because of the frequent disruptions to their business operations.

Although the General Counsel notes that intermittent strikes can disrupt operations, it argues that they should not be deemed unlawful because they are particularly effective in achieving that goal. The General Counsel adds that the current standard for determining whether intermittent strikes are protected activity is unclear and that the standard unnecessarily deprives unions and employees of the right to strike. It contends, among other things, that the current standard unnecessarily prioritizes the impact on an employer’s operation over a union’s right to engage in intermittent strikes. The new standard would permit intermittent strikes so long as “(1) they involve a complete cessation of work, and are not so brief and frequent that they are tantamount to work slowdown; (2) they are not designed to impose permanent conditions of work, but rather are designed to exert economic pressure; and (3) the employer is made aware of the employees’ purposes in striking.” While the General Counsel posited that a ten-minute strike every thirty minutes would be unprotected, their example begs the question of whether strikes every other day would be protected.

In defense of its position, the General Counsel notes that employers are not helpless to combat intermittent strikes, but can turn to numerous strategies, including permanently replacing employees who go on strike. Although many problems exist with the proposed new standard, the General Counsel seems to have overlooked the Board’s May 2016 decision in American Baptist Homes of the West. In that case, the Board held that it is unlawful for an employer to permanently replace striking employees if the employer’s motive is “to avoid future strikes.” In this regard, the General Counsel’s suggestion that an employer can “cope” with intermittent strikes, which by definition include future strikes, by permanently replacing those employees appears either disingenuous or misguided. Rather than achieve clarity, the General Counsel’s proposed standard would create another layer of confusion as employers struggle to determine how to contend with intermittent strikes.

At this point, the Board has not acted on the General Counsel’s proposed standard, but the General Counsel is asking the Board’s regional directors to identify cases involving intermittent strikes and to apply this new standard when prosecuting those cases before administrative law judges and the Board. We will continue to follow this issue as it develops.

This post was authored by Natale V. Di Natale.

OSHA Issues New Whistleblower Protection Guidance

In September, OSHA issued new guidance for evaluating settlement agreements between complainants and their employers to protect past and future whistleblowing activities. OSHA reviews these settlement agreements to ensure they are fair, reasonable, and entered into knowingly and voluntarily. While OSHA already has extensive whistleblower protections, this guidance provides new guidelines for approving settlement agreements between employers and whistleblowers.

The guidance provides that OSHA will not approve any settlement that contains “gag” restrictions that prohibit or discourage a complainant from engaging in a “protected activity.” A “protected activity” includes:

  • Filing a complaint with a government agency
  • Participating in an investigation
  • Testifying in proceedings
  • Otherwise providing information to the government

These prohibitions can arise in a number of settlement provisions that range in specificity. Such prohibitions can be found in specific settlement provisions, such as an outright restriction on providing information to the government regarding an occupational injury or exposure, a requirement that an employee notify the employer before communicating with the government, or a waiver of a complainant’s right to receive a monetary award under a government-administered whistleblower program. Other times, these provisions prohibiting or discouraging whistleblowing are found in very general contract provisions, such as broad confidentiality or non-disparagement clauses.

If OSHA sees these types of provisions in a settlement agreement, it may require that they be removed entirely, and/or it may require that the following language be “prominently positioned” in the agreement:

Nothing in this Agreement is intended to or shall prevent, impede or interfere with complainant’s non-waivable right, without prior notice to Respondent, to provide information to the government, participate in investigations, file a complaint, testify in proceedings regarding Respondent’s past or future conduct, or engage in any future activities protected under the whistleblower statutes administered by OSHA, or to receive and fully retain a monetary award from a government-administered whistleblower award program for providing information directly to a government agency.

OSHA will also scrutinize liquidated damages clauses in whistleblower settlements, evaluating whether such damages are disproportionate to the potential loss or excessive given the employee’s position or wages.

Time Running Out for Compliance with New DOL Overtime Regulation

As noted in this space in May, effective December 1, employees earning less than $47,476 per year may no longer be treated as exempt from overtime under the federal Fair Labor Standards Act.  See New Wage and Hour Requirements for Certain Employees of Manufacturers.”  Those manufacturers which have not yet addressed the issue have a little over two months to do so.

To recap, generally speaking all employees must be paid at least minimum wage ($7.25 per hour under federal law) for all hours work and time-and-a-half for all hours worked in excess of 40 hours per week.  An employee may be “exempt” from these requirements if she or he (a) is employed as a bona fide executive, administrative, or professional employee, (b) is paid on a “salary basis” and (c) receives a minimum annual salary of not less than $455 per week ($23,660 per year)(prior to 12/1/16).  On December 1, the minimum salary will double to $913 per week ($47,476 per year).  This change could dramatically increase the wages of first level managers, foremen and leads.

Economic Impact.  Manufacturers must take a look at every employee paid on a salary basis and making less than $47,476 per year to assess the impact.  For each employee, manufacturers must decide (1) whether to pay the employee hourly based on her or his hourly wage rate (calculated by dividing the numbers of hours worked per week by the weekly salary) and then overtime for all hours worked in excess of 40 hours per week based on that rate; (2) increase the employee’s weekly salary to not less than $913 per week, or (3) adjust the employee’s hourly rate downward and pay overtime for all hours worked in excess of 40 hours per week based on the new rate.  (While adjusting the wage rate should reduce to almost zero the economic impact of the change, an employer will need to know the number of overtime hours the employee works each week.  To calculate the “new rate,” take the number of overtime hours worked, multiply that by 1.5, add the product to 40 and then divide the previously paid weekly wage by this result).

Record Keeping Impact.  Keep in mind that the new overtime requires not only impact how a manufacturer pays employees, but also what records the manufacturer must keep.  Manufacturers must now keep detailed time records for previously-exempt employees who fall below the salary threshold.  Among other things, manufacturers must keep a record of starting time, ending time, breaks of more than 10 minutes (if unpaid), total number of hours worked per day, and total number of hours worked per week.  In addition, manufacturers will now have to pay these previously exempt employees for waiting time (if the employee cannot use time effectively for her or his own purposes), travel time (between employment sites), travel time away from employee’s “home community,” time spent in mandatory training, and potentially time spent checking e-mail, phone calls, text messaging.  Manufacturers may need to consider its policies with respect to use of smart phones, especially outside of normal working hours.

Other Impact.  Remember there could be other “unintended” impacts as a result of the new DOL rule.  The increase in wages for lower level managers and supervisors could create or increase wage compression issues.  The recent publicity surrounding the DOL’s regulation may also bring new attention from workers who may have reason to question their previous designation as an exempt employee.  Finally, keep in mind that state law may require substantially higher wages than current requirements and employees get to take advantage of the more beneficial law.

Manufacturers should not wait until the last minute to address the dynamic situation created by the DOL’s new regulation.

Key Considerations For Foreign Manufacturers That Wish To Sell Products In The United States

Last week, I had the privilege of speaking at the American Bar Association’s Business Law Section Annual Meeting in Boston.  The title of my presentation was:  “Key Considerations for Foreign Manufacturers That Wish to Sell Products to the United States” which was presented at the meeting of the International Expansion and Cross-Border Transactions Subcommittee.

Here are some of the key takeaways from my presentation:

  1. CONSIDER THE BRAND:  Although the tax implications often drive foreign investment and the corporate form selected, I often focus on things beyond the “mechanics” of the deal.  For instance, if a manufacturer is launching a product in the United States, we need to consider intellectual property protection.  The key here is often not just coming up with a name that can be trademarked, but considering whether the product will actually sell.  For that reason, we often engage consultants on our client’s behalf to consider these business issues.
  2. LOCATION, LOCATION, LOCATION:  There are three considerations that often are most important for foreign manufacturers when selecting a location for their U.S. subsidiary:  (1) access to a distribution network; (2) geographic proximity to key customers; and (3) access to skilled labor.  Often times, executives at foreign manufacturers also heavily weigh quality of life issues for those executives that will be leading the U.S. operations.
  3. GLOBAL COMMUNICATION:  Not surprisingly, there is always an extreme sensitivity about maintaining corporate formalities so that the assets of the foreign parent are protected from liability that may arise in the United States.  While it is important to respect these lines, there can be overkill.  Specifically, manufacturers often struggle at having the various departments talk to each other about product development and experience in the marketplace.  When a company has global operations, these challenges only increase as it is not uncommon for a lack of communication between engineers/quality in the United States and the rest of the world.  For that reason, we have helped several companies establish a process that allows for communication with the goal of minimizing liability risks.

I have some brief slides from the presentation.  Please email me at jwhite@rc.com if you would like them.

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