October 2018 Updates in Labor and Employment Law

October 30th, 2018

OSHA Rolls Back Obama-Era Directives on Initiative Plans, Drug Testing

Earlier this month, the federal Occupational Safety and Health Administration (OSHA) issued a memorandum to its regional administrators and state designees that purported to “clarify,” but actually substantially altered, the agency’s position on two issues of importance to employers, and especially those with industrial or otherwise high-risk workplaces: workplace safety initiative programs and post-incident drug testing.

In October 2016, during the Obama administration, OSHA issued a memorandum to regional administrators that involved OSHA’s prohibition of employer retaliation against employees for reporting a work-related injury. The memorandum suggested that an incentive program that promised employees a prize or some other benefit when the worksite comes in below a certain threshold for injuries may improperly provide an incentive for employees not to report injuries or illness actually suffered on the job—or, put differently, losing the right to that benefit because an employee reported an injury or illness may constitute OSHA-prohibited retaliation against that employee. Under this guidance, it was difficult for employers to know whether any safety incentive program would actually be permissible, since any incentive for avoiding accidents could also be seen as an incentive for not reporting accidents.

The October 11, 2018 memorandum “clarifies” that OSHA will no longer consider such programs a violation. Claiming that “[i]ncentive programs can be an important tool to promote workplace safety and health,” the newer memorandum states that “[r]ate-based incentive programs” like those described above are permissible “as long as they are not implemented in a manner that discourages reporting.” Put another way, “[i]f an employer takes a 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 employers feel free to report an injury or illness.”

This is a direct reversal of the October 2016 memorandum’s discussion of such incentive programs, which suggested that they may always be viewed as retaliatory. It is not clear what an employer could do to implement such a program that is not “in a manner that discourages reporting,” but presumably, so long as the employer has adequate safety policies and informs employees (e.g. in a handbook and/or on a bulletin board) that it encourages employees to report any injury or illness, incentive programs based on the rate of reported injuries will not be cited by OSHA.

In a similar vein, the 2016 memorandum required employers to have an “objectively reasonable basis” for post-incident drug testing. Because the specter of facing a drug test for an incident that could not possibly have been impacted by drug use could discourage employees from reporting such incidents, the Obama-era OSHA required employers to have some reason to believe that drug use played a role in an accident in order to administer a drug test.

The 2018 memorandum again essentially eliminates this rule, holding that “most instances of workplace drug testing are permissible under” the OSHA regulations, including “[d]rug testing to evaluate the root cause of a workplace incident that harmed or could have harmed employees.” The guidance does go on to say that if “the employer chooses to use drug testing to investigate the incident, the employer should test all employees whose conduct could have contributed to the incident, not just employees who reported injuries”—presumably attempting to remove one charge that such drug testing could be retaliatory by requiring the non-reporting employees to undergo the same testing.

It should be noted that this is merely an interpretation by OSHA—not a statute, or even a regulation subject to the notice-and-comment process—and as such, can be rescinded or replaced at any time (and almost certainly will be, should a Democratic administration take over after the 2020 election). Also, employers should keep in mind that there are other laws and state or local regulatory bodies that may have a say over this (in particular, many states have regulations regarding drug testing). But for now, at least at the federal level, it appears that employers with safety incentive programs and routine post-incident drug testing are in the clear.

Update Your Background Check Forms

On September 21, a provision in the new Economic Growth, Regulatory Relief, and Consumer Protection Act kicked in that required employers to update their background check forms to advise applicants and employees that a “national security freeze” was available to protect them from identity theft.

The law, passed in May 2018, requires a “national security freeze” to be provided by consumer reporting agencies to consumers, free of charge. The freeze restricts access to an individual’s background report, which helps prevent identity theft. Pertinent to employers, however, is that the law provides that a notice regarding the availability of a security freeze must be included any time the Fair Credit Reporting Act requires a “consumer” to receive a Summary of Consumer Rights. Employees or applicants are “consumers” for FCRA purposes when an employer seeks a background check on him or her, so any time such a report is ordered on an applicant or employee, that individual must receive a notice of the national security freeze. An updated model version of the Summary of Consumer Rights can be accessed at https://www.consumerfinance.gov/about-us/newsroom/bureau-consumer-financial-protection-issues-updated-fcra-model-disclosures/.

Accordingly, if you are an employer who obtains background checks from applicants or employees for use in hiring or termination decisions, it is important to ensure that your background check forms are updated to include the newly required notice.

If you have questions regarding this article or any other labor and employment law matters, please contact Bill Parker (wparker@seatonlaw.com or 952-921-4602) or any other attorney at Peters, Revnew, Kappenman & Anderson, P.A.

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Categories: Labor and Employment Law
Tags: William E. Parker