Repeat Violations and OSHA’s “Single Employer” Test

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Published: 06/3/20 9:11 AM

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Repeat Violations and OSHA’s “Single Employer” Test

This article was published on: 06/3/20 9:11 AM

Multi-location companies with similar business models are discovering that OSHA can tag them with a “repeat violation” for similar violations that occur at other facilities, affiliates or subsidiaries within the company—which significantly increases the chances that OSHA will find a repeat violation. Read on to find out more about repeat violations, what OSHA considers a “single employer” and how this could affect your business.

Download the PDF version: RI OSHA Single Employer Test.pdf

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What to Know About Repeat Violations

OSHA defines a “repeat violation” as a violation of any standard, regulation, rule or order where, on re-inspection, a substantially similar violation is found and the original citation has become a final order. In the past, OSHA didn’t cite many repeat violations, but this has recently changed. The agency is actively pursuing employers to ensure that they have fixed violations, and imposing hefty fines for those who have not. The following are important topics to know about repeat violations:

Longer look-back period: In 2010, OSHA extended its look-back period for violations from three years to five years. This means that OSHA can review all of the employer’s violations from the past five years and cite a repeat violation for a substantially similar violation that occurs within a five-year period.

Modified penalty structure: OSHA also modified the penalty structure, increasing the financial consequences of all violations. To calculate the penalty for repeated violations, OSHA adjusts the initial penalty for the size of the business and then multiples it by a factor of two, five or 10, depending on the size. Repeat violations can be a big financial hit, with penalties up to $129,336 for each repeat violation that occurs within the five-year period.

OSHA’s Severe Violator Enforcement Program (SVEP): Repeat violations can put you in OSHA’s Severe Violator Enforcement Program (SVEP), which replaced its Enhanced Enforcement Program in 2010.

If your company has multiple locations or operates through subsidiaries or affiliates, you may have more exposure to OSHA repeat violations.

Employers that have committed willful, repeat or failure-to-abate violations are placed in the SVEP. The program also allows inspectors to eliminate many penalty discounts and reductions, meaning higher average fines per violation.

OSHA’s Definition of a “Single Employer”

OSHA is putting greater emphasis on business-wide compliance, and you can expect that OSHA will pursue and issue repeat violations to employers with similar multi-location business models. OSHA defines an “employer” as one or more individuals, partnerships, corporations, business trusts or organized groups of persons. Single employer means that related entities—multi-locations, subsidiaries and affiliates—within a corporate family are treated as one workplace.

Retail giant Wal-Mart Stores Inc. has been a regular target of repeat violations. OSHA cited Wal-Mart for two repeat violations of workplace safety and health standards at its Great Falls, Montana store in 2013, one of which had occurred before at that store. OSHA had previously cited Wal-Mart for the other violation at its Arlington, Texas store in 2010, and also at two other locations in Pennsylvania in 2009. Wal-Mart received a heftier fine in 2013 because OSHA considered both violations at the Great Falls location to be repeat violations, even though one of those violations had occurred at different stores. Wal-Mart contested this in court, but the judge upheld OSHA’s citation and determination that all Wal-Mart locations fell under a single employer.

Traditional “corporate separateness” doesn’t protect a company from getting hit with a repeat violation. OSHA uses a “single employer” test to determine whether a violation is a repeat.

The Single Employer Test

OSHA’s “single employer test” determines when to hold one entity responsible for another entity’s violations.

Under the single employer test, entities are measured against a three-pronged test that includes three criteria to determine whether two or more entities are operating as a single employer:

  1. The entities share a common work site where employees of both companies face the same hazards.
  2. The entities have interrelated and integrated operations.
  3. The entities share a common president, management, supervision or ownership.

There is also a “single employer” test with four factors. The major difference between the three-part and four-part tests is the absence of the “common work site” factor. With the four-part test, the entities must have the following:

  1. Interrelated operations
  2. Common management
  3. Centralized control of labor relations
  4. Common ownership

Keep in mind that OSHA has not formally adopted one test over the other, and it has been applying whichever approach best fits the facts of the case and its agenda for prosecution.

Mitigate the Risk of Repeat Violations

OSHA’s objective is to ensure that initial violations are found and fixed, and that they do not occur again. It’s critical for companies to pay attention to OSHA’s yearly “hit list,” which lists the employers the agency plans to inspect in a given year as part of its Site-Specific Targeting (SST) program.

OSHA is specifically targeting inspections for those employers that have had past violations or violations at sister facilities. Use these strategies to mitigate the risk of a repeat violation or any violation:

  • OSHA inspectors usually arrive unannounced; if you are on OSHA’s annual hit list, which is usually published early in the year, you can expect that you’ll be inspected at some point during the year, so be prepared. Keep in mind that if you have repeat violations, all facilities of your company will end up on the hit list. Even if you aren’t on the annual hit list, know that an inspection could happen at any time.
  • Consult an OSHA lawyer for ways to mitigate risks before, during and after an OSHA inspection.
  • Create a committeewith one or more representatives from each facility to focus on OSHA compliance. The committee should meet regularly to go over inspection results so that one location or entity knows what’s going on at other entities within the company. Coordinate compliance efforts across all facilities and/or affiliates by sharing results and other data from an inspection at one facility with all locations of the company.

Contact TPG Insurance Services today for more information on updates from OSHA so you can stay on top of regulations and avoid violations.

Download the PDF version: RI OSHA Single Employer Test.pdf