Magazine for Senior Financial Executives: Business to OSHA: “OUCH!” – Occupational Safety and Health Administration – Brief Article

Business to OSHA: “OUCH!” – Occupational Safety and Health Administration – Brief Article – Statistical Data Included

Stephen Barr

ON NOVEMBER 14, the Occupational Safety and Health Administration (OSHA) issued the most far-reaching set of work-related rules ever, provoking an immediate barrage of criticism that the new ergonomics regulations are too broad, overly vague, and scientifically unsound.

In response, more than 60 organizations and companies have signed on to legal actions seeking to overturn the new rules, which take effect January 16 but give businesses until October to comply.

Baruch Fellner, a lawyer in the Washington, D.C., office of Gibson, Dunn & Crutcher LLP and lead counsel of the court challenge, says, “We believe the standard is fatally flawed.” He cites as examples OSHA’s economic analysis and rule-making procedures, potential conflicts between certain provisions and state workers’ compensation laws, and the absence of compelling medical evidence of the need for the new regulations.

In addition, with George W. Bush in the White House, the Republican-controlled Congress may “feel the pain” of OSHA’s antagonists and introduce legislation to rescind the rules or withhold funds to enforce them.

Under the new guidelines, many employers may have to do little more than give workers information on ergonomics-related injuries. But if two workers complain of musculoskeletal ailments such as carpal tunnel syndrome, lower back pain, or sciatica, companies would be required to screen for causes in the workplace and take steps to reduce those hazards.

One of the harshest provisions would require companies to pay an injured worker 90 percent of his or her pay for up to 90 days, while workers’ compensation insurance covers no more than 67 percent of pay. “The employer will have to pay the difference,” says Bob Gibson, vice president of loss prevention at Missouri Employers Mutual Insurance Co., a Workers’ comp provider. Another concern is that companies would increasingly find themselves responsible for injuries that were largely caused by non-work activities.

OSHA puts the cost of complying with its new regulations at $4.5 billion a year, and projects a benefit of $9.1 billion from improved productivity and reduced insurance claims. Business groups say the agency is way off, offering up annual estimates that range from $18 billion to $126 billion. They also insist that such heavy-handed regulations are unnecessary, since ergonomics-related injuries are on the decline nationwide.

For the most part, in fact, major corporations are already on the ergonomics bandwagon. SuperValu Inc., based in Eden Prairie, Minn., spent $160,000 at one of its warehouses on a new exercise machine that isolates and strengthens the muscles along the spine. Workers who spend their days lifting heavy boxes use the device 10 minutes a week; if back-strain injuries are down after a year, SuperValu will consider putting the machine in each of its 38 food distribution centers.

“I’m frustrated that OSHA thinks that if it were not for OSHA, no one would care about ergonomics,” says James Koskan, corporate risk-control manager at SuperValu, who estimates that it would cost the company a minimum of $17 million to comply with the OSHA rules, based on a study by Food Distributors International, a trade association in Falls Church, Va.

Yet it is likely that companies with a few hundred employees or less will feel the greatest burden. “Small businesses are going to have a harder time than large ones,” says Phyllis King, an ergonomics expert at the University of Wisconsin, Milwaukee. They have fewer resources to spend on ergonomics programs, she notes, and would reap fewer benefits from the money they can invest.

COPYRIGHT 2001 CFO Publishing Corp.

COPYRIGHT 2001 Gale Group