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Record vs. reality

May 1, 2009

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Are recordkeeping rules for contractor injuries skewing safety data?

By Marvin V. Greene, associate editor

KEY POINTS
  • In 2005, independent contractors represented 7.4 percent of the total U.S. workforce, according to the Bureau of Labor Statistics.
  • Federal OSHA does not require host employers to record contractor injuries and fatalities unless the employer actually supervises these workers on a “day-to-day basis.”
  • Safety experts said a disconnect exists between workplace safety data that is being recorded by host employers and what is actually occurring on jobsites.
  • Contractor work models are typically complicated arrangements, with independents often working alone on nonroutine projects.

Independent contract workers represent the largest segment of the nation’s labor force of on-call, part-time and temporary employees, according to the Bureau of Labor Statistics. Numbering 10.3 million (7.4 percent of the total U.S. workforce) in 2005, these workers provide “host” employers with options for lower-cost staffing, specialization and extra help in a crunch.

In industry sectors such as sales and financial services, the pace of contracting work is largely routine. However, in heavy industries such as utilities, mining and construction, emerging issues are forcing host employers, safety experts, regulators and researchers to rethink the effect of independent contractors – both on an organization’s safety culture and on safety and health statistics.

Federal OSHA does not require host employers to record contractor injuries and fatalities unless the employer actually supervises the workers on a “day-to-day basis.” This includes the “details, means, methods and processes by which the work objective is accomplished,” according to agency recordkeeping regulations.

Conversely, OSHA can cite host general contractors in construction during inspections for alleged independent contractor safety violations under the agency’s contentious multi-employer citation doctrine. (See “OSHA policy upheld,” Safety+Health, April 2009, p. 38.) OSHA interprets the policy to mean that a host general contractor can prevent or abate hazardous conditions created by subcontractors through the reasonable exercise of supervisory authority – regardless of whether the general contractor created the hazard.

Data disconnect

Contractor work arrangements can be complicated, with independents often working alone in the field on nonroutine projects. They seldom interact with the host employer’s permanent workforce and may have minimal exposure to the organization’s established safety culture.

Because incidents among the independent contractor workforce are not assigned to the host employer’s safety record, some safety experts say a disconnect exists between recorded data and what is actually occurring on jobsites.

“It is likely that a company is going to pound its chest and say, ‘We’re doing a great job on safety,’ and not recognize the fact that their contractors are suffering from higher fatality numbers and more serious injuries. A lot of the companies don’t collect the data on contractors. They have no idea,” said Scott Madar, a consultant with Washington-based ORC Worldwide.

In January, Rep. Gene Green (D-TX) reintroduced legislation that would compel OSHA to change its recordkeeping regulations regarding contractors. H.R. 242 would require host employers to keep a site log for independent contractors, and list recordable injuries and illnesses “whether such employees are directly employed by the site-controlling employer or are employed by contractors or temporary help or employee leasing services.” Green first introduced the bill in response to the March 2005 explosion at the BP Products North America petroleum refinery in Texas City, TX, in which 14 of the 15 workers killed were employed by contractors.

“The loss of life and injuries of contract workers did not go to that site,” Green said. “So many times there are almost as many contract workers as there are employees of the actual company. I wanted to make sure that OSHA had the correct numbers so they could see that contract workers were injured on that plant site even though they weren’t employees.”

H.R. 242 has been referred to the House Education and Labor Committee. Green said he is seeking to have it attached to OSHA reform legislation expected this year.

‘Starting to think about it’

ORC Worldwide recently made contractor worker safety part of its practice following a 2006 summit underwritten by the foundation of Duke Energy Corp. The Charlotte, NC-based utility company had determined contract workers experience a disproportionately large share of serious injuries and fatalities on jobsites.

Although an ORC Worldwide survey associated with the initiative found that about 40 percent of host employers responding did not track contractor injuries and illnesses, firm consultant Steve Newell noted the subject is “more on their radar screens than ever before” as part of increasing attention to principles of corporate sustainability and social responsibility.

“In the past, companies would outsource their most hazardous work and didn’t really think about it that much. Now they are starting to think about it,” Newell said.

The Mine Safety and Health Administration examined the issue at its own summit in 2005. David Dye, then-acting MSHA administrator, told summit participants that contractor work hours in mining operations increased 193 percent between 1984 and 2004, while mining operator employee hours decreased 31 percent during the same period. He added that contractor fatalities represented 14 percent of mining industry work hours during calendar year 2004, but accounted for 24 percent of work-related fatalities.

Tracking a company’s safety history

BLS, whose workplace injury and illness data is used extensively by OSHA and MSHA, recently announced it would begin tracking independent contractor fatalities in various industries in 2011. BLS already tracks fatalities among special trade contractors in construction – plumbers, painters, roofers, electricians, carpenters and others who represent the largest segment of the industry. In 2007, 680 of the 1,178 construction fatalities were from that group.

John Mendeloff, director of the RAND Center for Health and Safety in the Workplace, a Pittsburgh think tank, applauded the move, saying it allows data to be used as a predictor of overall contractor fatalities. In construction, for instance, data has shown a relationship between a company’s compliance record and the likelihood of a fatality, said Mendeloff, whose organization conducted a study on contractor safety in conjunction with the Duke Energy summit.

“If you don’t really have a good way of measuring or predicting safety, it is hard to give it very much weight in the decision about whom to hire,” Mendeloff said. “It would be very helpful for a host firm to have a good way to predict how a contractor will perform.”

One strategy emerging among host employers is using safety prescreening and evaluation. A contractor’s safety compliance record with OSHA, lost workday injury and illness rates, and experience modification factors with workers’ compensation insurance carriers are some elements host employers are reviewing more closely before deciding which independents to hire.

“Very often these hazardous jobs are infrequent jobs. They are a specialty ... the company has decided there is no reason to maintain people with that specialty on staff full time when, let’s say, they have to do this work once a year. So, it makes business sense for them to remove that from their portfolio of workers and contract that work out,” Madar said.

Contractor prequalification is on the rise, according to George Kennedy, vice president of safety for the National Utility Contractors Association. The Arlington, VA-based trade association provides safety outreach and training to independent contractors on issues such as trenching and confined spaces.

“It’s happening more and more. If I were a general contractor or an owner, I would want to know their safety history – especially with the way third-party liability is these days. We don’t want somebody out there who takes chances all the time and puts his people at risk,” he said.

Paradigm shift

Daniel C. Hendrix is business manager for the Pipeliners Local 798 union in Tulsa, OK. The union supplies natural gas pipeline workers to contracting companies, who then supply host employers. Hendrix said host employers increasingly are changing the paradigm of how they use independents, preferring today to go through a contracting firm rather than hiring individual workers directly.

“Ten to 15 years ago, [host employers] just paid a flat fee, maybe $50 an hour. But [contract workers] had to pay their own taxes and liability insurance policies. We don’t see much of that anymore. Now everything goes through the contracting company,” he said. Hendrix said employers in his industry have become more proactive in scrutinizing the safety records of contracting companies.

Participants at the Duke Energy summit conceded that reliance on contractors in heavy industries for job tasks and functions will likely be a long-term trend.

“The complexities of the contractor-host employer relationship makes it more difficult to manage safety,” Newell said. “We need to fully understand contract settings and the losses that contractors are experiencing.”

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