OSHA clarifies regulations on safety incentive programs and post-incident drug testing

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As we previously reported, back in 2016, OSHA issued a rule that amended its regulations (29 C.F.R. § 1904.35(b)(1)(iv)) to prohibit employers from retaliating against employees for reporting work-related injuries or illnesses. The subsequent interpretive guidance on this regulation discouraged employers from implementing certain aspects of workplace safety incentive programs and post-incident drug testing. On October 11, 2018, OSHA issued a new memorandum to clarify its position on these issues and to supersede prior guidance and interpretations that it issued.

The memorandum starts with a general statement that the regulations do not prohibit safety incentive programs or post-incident drug testing, but that action taken under a safety incentive program or post-incident drug testing policy would only violate the regulations if the employer took the action to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health. The memorandum then provides the following clarification:

Safety incentive programs

Positive action taken under programs that reward workers for reporting near-misses or hazards, and encourages involvement in a safety and health management system is always permissible under the regulations. Rate-based incentive programs that offer an incentive based on a lack of injuries (e.g., prizes for an injury-free month) are also permissible as long as they are not implemented in a manner that discourages reporting. Therefore, if an employer takes negative action against an employee under a rate-based incentive program, such as withholding a prize or bonus because of a reported injury, OSHA would not cite the employer as long as the employer has implemented adequate precautions to ensure that employees feel free to report an injury or illness. However, merely issuing a policy encouraging employees to report injuries would not, by itself, be adequate to ensure that employees actually feel free to report, particularly when the consequence for reporting will be a lost opportunity to receive a substantial reward. As such, an employer would need to take additional positive steps to avoid any inadvertent deterrent effects of a rate-based incentive program. Examples of positive counterbalancing steps for a rate-based program include:

  • A program rewarding employees for identifying unsafe conditions in the workplace;
  • A training program for all employees to reinforce reporting rights and responsibilities and emphasize the employer’s non-retaliation policy;
  • A mechanism for accurately evaluating employees’ willingness to report injuries and illnesses.

Workplace drug testing

The memorandum also provides examples of permissible drug testing to include:

  • Random drug testing (however, random employee drug testing is strictly limited under California law and not advisable for most California employers)
  • Drug testing under a federal or state law (such as workers’ compensation or transportation-related rules)
  • Drug testing to evaluate the root cause of a workplace incident that harmed or could have harmed employees (as long as the employer does not single-out only certain employees who could have contributed to the root cause).

Although this clarifying memorandum provides some additional examples of permissible practices under OSHA, and generally seems to soften prior interpretation of the regulations, how employers implement their safety programs and drug testing practices will ultimately determine whether they are compliant.

Employers must also keep in mind that applicable state law pertaining to drug testing or safety issues may be more restrictive than the federal law and OSHA’s standards, so employers should consult with counsel knowledgeable in their applicable state’s laws when it comes to workplace safety and drug test policies.