OSHA’s Revised Instance-By-Instance Policy and the Impact on the Construction Industry

In Legally Speaking
June 26, 2023
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By Michael Metz-Topodas & Seth Gitner, Saul Ewing LLP

Contractors could start seeing six-figure fines from the Occupational Safety and Health Administration (OSHA) in the next few months thanks to sweeping policy changes implemented earlier this year. In a press release and two internal memoranda issued January 26, 2023, the Department of Labor (DOL) revised OSHA’s instance-by-instance policy (IBI). The IBI directs when OSHA should cite employers for each and every occurrence that violates an OSHA safety standard, as opposed to aggregating multiple violations into one citation. OSHA’s unilateral action fundamentally changes how the agency will issue citations for alleged workplace safety standard infractions, especially in the construction industry.

Introduced in 1990 by an OSHA directive, the original IBI formalized an OSHA practice of issuing separate penalties for each and every violation of certain standards. The IBI increased OSHA’s effectiveness, in spite of its limited resources, by disincentivizing continued violations. But, it also had limits as it applied only to willful violations where the employer knew of a violation, made no reasonable effort to eliminate it, and:

the violation resulted in worker fatalities, a worksite catastrophe, or a large number of injuries or illnesses;
the violation resulted in persistently high rates of worker injuries or illnesses;
the employer had an extensive history of previous violations;
the employer had intentionally disregarded safety and health responsibilities;
the employer’s conduct, taken as a whole, amounted to clear bad faith in performing duties under the Occupational Safety and Health Act (OSH Act); or
the employer had committed a large number of violations so as to significantly undermine any existing safety and health program’s effectiveness.

Although OSHA originally limited IBI to particularly egregious circumstances, the revised policy expands its use significantly by allowing IBI citations where an inspector finds any one of these factors:

the employer has received a willful, repeat, or failure to abate violation within the past five years where that classification is current;
the employer has failed to report a fatality, inpatient hospitalization, amputation, or loss of an eye;
the proposed citations relate to a fatality or catastrophe; or
the proposed recordkeeping citation(s) relate(s) to injury or illness(es) from a serious hazard.

Despite broadening the factors for IBI citations, OSHA did limit the revised IBI’s scope to certain “high-gravity serious violations” related to falls, trenching, machine guarding, respiratory protection, permit required confined spaces, lockout tagout, and other-than-serious recordkeeping violations. Nonetheless, for violations that fall within these guidelines, OSHA now has the authority to cite those violations per machine, location, entry, or employee, which means for each and every time a machine, location, or employee does not conform to a particular standard, OSHA can issue a separate penalty.

A common roofing situation illustrates how IBI could operate. Where five employees are installing shingles on a pitched roof over six feet above grade without any fall protection, inspectors typically cite the employer for one violation of a standard, perhaps 29 C.F.R. § 1926.501, with a penalty issued in accordance with OSHA guidelines, say $11,718.75. If, however, that employer has previously received a repeat violation of any standard or has failed to report a hospitalization where required, then under the new IBI, that employer could face five separate citations with a total fine of $58,593.75‬. Similar fines could follow for other standards similarly violated. Under the new IBI, OSHA inspections could result in citations with six-figure total penalties far more often than before.

OSHA’s own words make no secret of the reasons for this policy change. OSHA wants to give inspectors “another tool” to “make its penalties more effective” and create “a deterrent effect.” In particular, OSHA issued this policy for employers whom OSHA thinks “increased citations are needed” because they “don’t get it” and need “additional deterrence.”

To ensure consistency with other OSHA policies, the agency also revised its policy on grouping citations to direct inspectors to refrain from aggregating violations that arise out of separate and distinct conditions or different conduct. OSHA also noted the inspectors could group serious and other-than serious violations where grouping achieves a “deterrent effect,” such as where the overall violation can be classified by the more serious item.

Although the policy applies across all employers, construction companies could feel the new IBI’s effects more acutely. Of the six areas the new IBI policy targets, two pertain directly to three construction-industry violations that regularly appear on OSHA’s yearly top ten list of citations issued—fall protection, fall protection training, and respiratory protection. Thus, the IBI has a statistically greater likelihood of affecting contractors. Additionally, because so much of construction work involves teams of employees, construction companies face greater likelihood of being subject to the multiplying effect of IBI citations.

To counter this increased likelihood of higher penalties from the IBI, contractors will need to devote greater resources to safety compliance. For help in identifying potential hazards and vulnerabilities, contractors should consider a professional safety audit from either their insurance broker or a third party consultant. Additionally, contractors should consider increased safety training through either individual classes or a full scope program. Finally, contractors should communicate frequently with their counsel to ensure they have complied properly with governing regulatory standards.

Much of the ISI’s impact will depend on OSHA having sufficient inspectors to enforce the IBI’s requirements properly. With reports that OSHA already hired hundreds of new compliance safety and health officers and intends to hire more, OSHA looks poised to fully implement the new IBI. In this new regulatory atmosphere, contractors will need guidance from experienced OSHA counsel.

About the Authors

Michael Metz-Topodas is a partner in the Construction Group at Saul Ewing. His practice includes OSHA compliance and citation defense, as well as construction litigation, day-to-day project and claims counseling, and contract review and drafting. He has handled a range of OSHA-related matters from hearings before the Occupational Safety & Health Commission to informal conferences to responses to investigation requests. Mr. Metz-Topodas also represents general contractors, subcontractors, owners, designers, and suppliers on private, public, and federal projects in matters involving all varieties of construction disputes. He can be reached at michael.metz-topodas@saul.com.

Seth Gitner is an associate at Saul Ewing where he counsels clients on regulatory, compliance, enforcement and transactional matters. He can be reached at seth.gitner@saul.com.