September 2018

by Ross A. Boden, Sandberg, Phoenix & von Gontard, P.C.

Subcontractors must remain cognizant of OSHA’s continued enforcement focus on multi-employer job sites and joint-employer relationships. At current penalty rates of $12,934 per violation or $129,336 for willful violations, citations carry significant consequences. This article summarizes the responsibilities you need to know with examples and practice tips to help you escape your next OSHA inspection without a dreaded citation.

OSHA’s Multi-Employer Citation Policy, Examples, and Practice Tips

Under OSHA’s multi-employer citation policy, more than one employer may be cited for a violating condition. OSHA’s multi-employer policy identifies four types of employers who may be cited:

1. Creating Employer: The employer that caused a hazardous condition that violates an OSHA standard. Under this definition, it does not matter whose employees were exposed to the hazard. Creating employers can be cited even if none of its own employees were exposed to the hazard, which is consistent with all employers’ duty not to create hazardous conditions.

   Example: While operating a crane on a job site, XYZ Subcontractor damages guardrails that were installed as fall protection in a currently vacant part of the job site. The extent of the damage is unclear, and XYZ Subcontractor does not have access to that area of the job site. Although no employees of XYZ Subcontractor or any other contractor are present, XYZ Subcontractor is potentially citable. However, XYZ Subcontractor should be able to avoid citation if it immediately notifies the general contractor (preferably verbally and in writing) and prevents its employees and other contractors’ employees from accessing that area of the job site until the damage can be assessed and corrected.

   Practice Tip: Educating your employees through continual training goes a long way. Your employees should be well-trained to identify actual or potential hazards and report the hazard immediately to their supervisor, safety manager, and general contractor. Your safety manager (or whoever fulfills this role at your company) should then coordinate with the general contractor to prevent access to the area until the hazard is corrected.

2. Exposing Employer: An employer whose own employees are exposed (or even potentially exposed) to the hazard. Under this definition, the focus is protecting your employees regardless of who caused the hazard. Exposing employers are citable for (a) known hazards or unknown hazards that would have been discovered with reasonable diligence or (b) failing to protect its employees. Even if the exposing employer does not have authority to correct the hazard, the employer can be cited if it does not: (i) request the creating/controlling employer to correct the hazard; (ii) inform its employees of the hazard; and (iii) take reasonable alternative protective measures. In cases of imminent danger, employees must be removed from the job site.

   Example: XYZ Subcontractor’s employees are using an elevated ramp to access their work area. The guardrails of the access ramp are dangerously loose. XYZ Subcontractor discovered the condition by inspecting and testing the guardrails. XYZ Subcontractor does not have authority to fix the guardrail, but it notified the general contractor verbally and by email. In the meantime, XYZ Subcontractor called an employee meeting immediately, informed its employees of the hazard, and instructed them to use an alternate access ramp until further notice. XYZ Subcontractor should avoid citation here.

   Practice Tip: Remain vigilant at all times for potential hazards and train your employees to do the same, especially on job sites where ingress and egress routes create potential hazards. Instruct your employees to notify you immediately of the hazard and avoid it until you can take appropriate action. When a hazard is identified, immediately notify and safeguard your employees. Then, immediately notify the general contractor verbally and follow up with email confirmation documenting the call.

3. Correcting Employer: OSHA defines a correcting employer as an employer who is engaged in a common undertaking on the same worksite as the exposing employer and is responsible for correcting a hazard. In plain English, a correcting employer is the employer with authority or responsibility to fix the hazard. Correcting employers have a duty to prevent, discover, and correct hazards. In this scenario, OSHA is generally looking for an employer whose scope of work includes installing or maintaining safety equipment or devices.

   Example: XYZ Subcontractor was hired to excavate a trench greater than 5-feet deep, so a protective system was required and shoring was selected as the appropriate system. Installing and maintaining the protective system is part of XYZ Subcontractor’s scope of work under its contract. While working in the trench, other contractors’ employees cause damage to the shoring. Nobody notifies XYZ Subcontractor of the damage. The hazard goes unnoticed for several days, and OSHA shows up for an inspection. Even though XYZ Subcontractor did not create the hazard, XYZ Subcontractor may get a citation for failing to discover and correct the hazard. The other contractors may also be cited as creating or exposing employers.

   Practice Tip: Be proactive and do not rely on other contractors to inform you of damage. If you have exclusive or joint authority to control the safety equipment at issue, periodically inspect and test the safety equipment with a frequency that is appropriate under the circumstances. In some scenarios, a daily inspection may suffice based on the size of the project and amount of activity in the area. Other scenarios may require multiple inspections per day. Track and document your inspections. If you spot an issue, immediately notify the other contractors verbally and in writing to avoid the area until the hazard is corrected.

4. Controlling Employer: An employer who has general supervisory authority over the worksite, including the power to correct safety and health violations itself or require others to correct them. Of course this is typically the general contractor and/or construction manager. Controlling employer status can be established in many different ways, often by contract but also by the exercise of control. Controlling employers have a duty to detect violations, implement correction systems, and enforce safety compliance.

   Example: GC Construction is general contractor for the construction of a new warehouse. XYZ Electric is the electrical subcontractor. XYZ Electric does extensive and regular safety training and has an impeccable safety record. GC Construction has a poor safety record. XYZ Electric fails to connect a grounding wire inside an electric panel box. GC Construction inspects the site, does not detect the hazard, but receives assurance from XYZ Electric that the equipment is safely installed. XYZ Electric could be cited in this scenario, and if XYZ Electric agreed to indemnify GC Construction for citations within its scope of work, XYZ Electric could face an even steeper penalty due to GC Construction’s poor safety record.

   Practice Tip: Contract language is important here. Indemnification provisions for OSHA citations within a subcontractor’s scope of work are fairly common. However, insist on a provision that explicitly excludes any liability for increased penalties due to the general contractor’s prior citations or poor safety record.

Joint-Employer Considerations and Practice Tips

Since the Temporary Worker Initiative was announced in 2013, OSHA has increased enforcement against joint-employers for deficiencies in protecting temporary workers. The purpose of the initiative is to protect temporary workers who are more likely to perform dangerous jobs, have limited English proficiency, and not receive necessary training. The initiative is designed to impose obligations on both the host employer and staffing agency to protect temporary workers. Given that OSHA recently released two more bulletins on the initiative, the increased enforcement is likely to continue for the foreseeable future.

When hiring temporary workers, communication between the host employer and staffing agency is critical to preventing citations. For the host employer, the focus should be on identifying site-specific hazards, safety equipment, and training necessary to protect the temporary workers who may not be familiar with the job site. OSHA permits host employers and staffing agencies to divide these responsibilities, but again, communication is key to making sure there are no misunderstandings. Best practices for subcontractors include a written contract that (1) describes each side’s responsibilities; (2) requires the staffing agency to conduct safety training (which should be in addition to any safety training you provide); and (3) includes an indemnity provision stating the staffing agency will indemnify, defend, and hold harmless the subcontractor for any citations attributable to the staffing agency’s acts or omissions.

Possible Changes to Watch For

The definition of a joint-employer has been a moving target in recent years. The National Labor Relations Board has grabbed most of the headlines on this issue with its well-publicized struggles to define employer-employee relationships for purposes of worker misclassification. The definition has expanded and contracted several times in the last three years and was recently expanded in February 2018, suggesting that even the unexercised potential to control working conditions may establish a joint-employer relationship. If the NLRB adopts a firm definition or if new laws are enacted to solidify a definition, it may impact OSHA’s multi-employer and joint-employer guidelines.

Ross A. Boden is an attorney in the Kansas City office of Sandberg, Phoenix & von Gontard, P.C., and focuses his practice in the areas of construction and employment litigation across Kansas and Missouri. Please do not hesitate to contact Ross for more information. He can be reached at (816) 627-5536 or rboden@sandbergphoenix.com. You can follow Sandberg Phoenix’s construction litigation blog at www.sandbergphoenix.com/construction-litigation/blog/.

##