Staffing Cal/OSHA Enforcement Responsibilities

Background

Federal Law Lays Out Standards for Safety and Health in the Workplace. The federal Occupational Safety and Health Act of 1970 provides that employers have a general duty to provide their employees with a place of employment that is free from recognized hazards that are likely to cause death or serious harm. Under the Act, the federal OSHA is responsible for setting specific standards related to workplace safety and health and has authority to inspect workplaces and enforce these standards.

Cal/OSHA Enforces Safety and Health Standards on Behalf of Federal OSHA. Federal law provides that states may, with federal approval and oversight, optionally assume responsibility for enforcement of federal occupational safety and health standards. States wishing to assume this responsibility develop “state plans” that must be at least as effective at enforcing federal occupational safety and health standards as the federal OSHA would be. California is 1 of 21 states that have an approved state plan. In California, Cal/OSHA—a division of DIR—is responsible for administering the state’s responsibilities for occupational safety and health under the state plan. Cal/OSHA has jurisdiction over more than 1.3 million business establishments across the state that employ roughly 15 million workers.

State Law Provides for Additional Standards to Be Developed by the Occupational Safety and Health Standards Board (OSHSB) . . . State law provides for the OSHSB—also situated within DIR—to develop additional occupational safety and health standards that may clarify or exceed federal standards and that are binding on California employers. For example, federal OSHA standards require that employers address worksite hazards related to heat illness under the general duty clause to prevent hazards that are likely to cause death or serious harm to employees. In 2005, the OSHSB adopted a distinct heat illness prevention standard that places specific duties on employers related to preventing heat illness hazards, such as providing access to drinking water and adequate shade under specified conditions.

. . . And Places Specific Requirements on Cal/OSHA That Help Define Enforcement Priorities. State law also places specific requirements on Cal/OSHA that, in part, define enforcement priorities. Figure 1 shows some of these requirements. For example, state law prioritizes responding to formal complaints made by employees or their representatives by requiring that these complaints must begin to be evaluated within a short time frame. As a result, Cal/OSHA’s enforcement activities focus primarily on responding to complaints, as opposed to planned inspections.

Cal/OSHA Funding. Cal/OSHA activities are primarily funded by (1) a federal grant and (2) an assessment levied on employers that is equal to a percentage of workers’ compensation insurance premiums and is deposited into the Occupational Safety and Health Fund.

Legislature Has Recently Approved Increases in Funding and Staffing in Cal/OSHA. As part of the 2014–15 budget package, the Legislature approved two proposals put forward by the administration related to Cal/OSHA funding and staffing levels. The first provided additional positions dedicated to Cal/OSHA’s process safety management unit, which oversees enforcement of occupational safety and health standards at refineries and other facilities that process or store large quantities of toxic, flammable, and explosive chemicals. Concurrently, a new fee on the refinery industry was put in place to support additional staff dedicated to refineries (also deposited into the Occupational Safety and Health Fund). The second proposal increased Cal/OSHA’s expenditure authority to support 26 positions that had previously been unfunded.

Summary of the 2015–16 Budget Proposal for Cal/OSHA. Figure 2 displays funding and authorized positions for the support of Cal/OSHA in 2013–14 through 2015–16 (as proposed). Under the Governor’s 2015–16 budget proposal, total Cal/OSHA funding would increase by $11 million (8 percent) and 52 authorized positions. Of this total increase in 2015–16, $4.6 million and 24.5 positions are tied to the proposal we analyze in this report, which would significantly increase the number of workplace safety and health inspections performed each year, with the remainder related to other proposals. (Other Cal/OSHA proposals include funding to increase elevator safety inspections and to implement recently enacted legislation.)

Overview of the Governor’s Proposal

Governor Identifies Several Concerns With Current Occupational Safety and Health Enforcement

The Governor’s proposal identifies several concerns related to Cal/OSHA enforcement activities that we describe below.

California Has Higher Rate of Nonfatal Injury and Illness Than National Average. As shown in Figure 3, the state has a relatively low rate of workplace fatalities compared to the nation. The state’s rate of nonfatal injury and illness, however, is above the national average, with a rate of 124 nonfatal injuries and illnesses involving days away from work per 10,000 full–time workers in 2013, compared to a rate of 109 for the United States.

Cal/OSHA Not Meeting Certain Requirements Established in State Law. The proposal identifies a few requirements in state law that Cal/OSHA is currently not meeting. Specifically, Cal/OSHA is (1) not meeting statutory timelines for initiating investigations in response to formal complaints (both serious and nonserious), (2) not performing repeat inspections for 20 percent of business establishments with a serious violation (in 2013, Cal/OSHA should have performed 231 repeat inspections, but only performed 49), and (3) not performing sufficient inspections prior to issuing permits for statutorily defined “high–risk” activities (such as demolitions or digging deep trenches). While there is no statutory requirement for Cal/OSHA to conduct on–site inspections prior to issuing such permits for high–risk activities, Cal/OSHA believes that in many cases an on–site inspection is needed to verify compliance with occupational safety and health standards prior to issuing the permit. In 2013, only 15 percent of worksites that received permits were inspected beforehand.

Cal/OSHA Not Meeting Certain Federal OSHA Expectations. In evaluations of Cal/OSHA activities over the past several years, federal OSHA has been critical of what it views as low staffing levels and an insufficient number of annual inspections by Cal/OSHA. In its most recent evaluation of Cal/OSHA, federal OSHA had additional specific concerns that (1) the state has a low rate of serious violations from planned inspections, indicating that Cal/OSHA may not be targeting business establishments with the highest likelihood of improving compliance, and (2) the state has a relatively long inspection “lapse time,” referring to the period between when an inspection is opened to when a citation is issued (or not issued). Findings and recommendations in federal OSHA evaluations of Cal/OSHA are technically not binding on the state. However, federal OSHA ultimately has the authority to revoke California’s state plan status, thereby resuming responsibility for enforcement of federal standards, if it finds that Cal/OSHA is not at least as effective as federal OSHA in enforcing federal standards.

Governor’s Proposal Would Increase Staffing and Annual Inspections

The Governor proposes to provide a total of 44 additional positions for Cal/OSHA (34 with inspection responsibilities), to be phased in beginning in the fall of 2015–16 and continuing in 2016–17. When fully phased in, it is estimated that the proposal will result in roughly an additional 1,400 inspections annually, on top of the roughly 8,700 inspections that would be conducted if the proposal were not approved. The cost of these new positions is $4.6 million in 2015–16 and $7.1 million ongoing, funded by general employer assessments deposited in the Occupational Safety and Health Fund. The proposal would attempt to address the concerns identified by the Governor in the following ways.

Increases Staff Resources to Enable Better Compliance With Requirements Mandated in State Law. The proposal would provide 4 safety and health inspectors and 16 assistant district managers (which would also have inspection responsibilities in addition to management responsibilities) to (1) increase timely initiation of investigations following formal complaints to meet the 3–day and 14–day requirements in state law, (2) increase repeat inspections of business establishments with serious violations to meet the 20 percent statutory requirement, and (3) increase inspections at worksites prior to issuing permits for high–risk activities. Taken together, these new positions would result in an estimated 300 additional inspections each year.

Creates New Assistant District Manager Classification to Improve Inspection Processing Times. As mentioned above, the proposal would provide 16 assistant district managers, a job classification that currently does not exist in Cal/OSHA. The proposal notes that the new classification is needed in order to (1) create promotional opportunities to improve retention of inspection staff and (2) improve timeliness of inspection processes by expanding the pool of staff that can perform certain activities (such as approving citations, handling appeals, and managing inspector workload) that currently are handled primarily by district managers. Expanding staff capacity to perform these activities is intended to allow for improved inspection processing times, thereby helping to address federal OSHA concerns about relatively long inspection lag times. Assistant district managers would spend roughly half their time on inspections, allowing them to contribute to the total number of increased inspections assumed in the proposal.

Prioritizes Inspections of Serious Violations Over Nonserious Violations. The proposal would take certain steps to prioritize inspections in response to serious violations over inspections in response to nonserious violations. First, the proposal would utilize the 4 inspectors and 16 assistance district managers mentioned above to increase inspections in response to “informal” complaints of serious violations. Under current law, informal complaints, or those that are anonymous or come from a former employee or other member of the public, are not required to result in an on–site inspection. Under the proposal, Cal/OSHA would begin conducting on–site inspections for roughly 10 percent of informal complaints that currently do not result in an inspection, leading to an additional 480 inspections annually. Second, the administration has proposed language that would clarify that investigations of serious accidents are prioritized over investigations of formal but nonserious complaints. Under current law, although formal complaints of nonserious violations must be investigated within 14 days, no such requirement exists for investigating serious accidents. Both of these actions are intended to prioritize Cal/OSHA resources to investigating potential serious violations ahead of nonserious violations and, in part, help address federal OSHA concerns about how Cal/OSHA targets its inspection resources.

Increases Planned Inspections in “High–Hazard” Industries. In addition to the new inspection staff described above, the proposal would provide 14 new inspectors to more than double the number of planned inspections conducted at worksites in high–hazard industries. High–hazard industries are defined as those with more than double the average rate of serious injury and illness in the private sector. In 2013, there were roughly 30,000 business establishments in high–hazard industries and Cal/OSHA conducted 382 inspections at business establishments in these industries. Under the proposal, the number of planned inspections at business establishments in high–hazard industries would increase by 630—an increase of 165 percent. Since planned inspections in high–hazard industries generally result in a higher rate of serious violations, this aspect of the proposal is intended to address federal OSHA concerns about California’s relatively low rate of serious violations resulting from its enforcement efforts and how Cal/OSHA targets its resources.

Increases Inspections to Roughly Equal Nationwide Rate of Inspections Per Business Establishment. Taken together, the proposal—when fully phased in—would result in roughly an additional 1,400 inspections annually. Cal/OSHA notes that increasing annual inspections by this amount will bring the state essentially in line with the national average number of annual inspections per business establishment. This is intended to at least partially address federal OSHA concerns about the number of inspections conducted by Cal/OSHA.

Provides Additional Legal and Administrative Staff to Address Enforcement–Related Workload Issues. Finally, the proposal would provide additional legal and support staff to address workload concerns. Specifically, the proposal includes four new attorneys and two new legal secretaries to address a reported growing number of appeals of Cal/OSHA citations. The proposal would also upgrade 16 existing office technicians to a higher classification to better reflect their responsibilities and improve the retention of employees in these positions. Finally, the proposal would provide four additional administrative staff for central human resources functions to account for workload associated with the increased overall staffing levels in Cal/OSHA that would result from this proposal.

LAO Assessment

Overall Comments

Concerns Raised by the Governor Are Valid. We find that the concerns raised by the Governor relating to Cal/OSHA’s failure to meet certain statutory requirements and the state’s elevated rate of nonfatal injury and illness are valid. Furthermore, we find that additional inspection staff will be needed in order for Cal/OSHA to meet statutory requirements on an ongoing basis. As we describe in greater detail below, we believe the staff proposed by the Governor would enable Cal/OSHA to comply with requirements in state law.

Decisions About Inspector Staffing Levels and Allocation of Inspection Resources Should Be Tied to Broader Cal/OSHA Outcomes. As described above, the administration notes that the proposal would provide additional inspectors and result in sufficient additional inspections to bring California in line with the national average rate of inspections per business establishment. While this is true, setting such a benchmark ties staffing levels to an “output” (number of inspections conducted) rather than an “outcome” (such as incidence of nonfatal occupational injury and illness). Tying staffing decisions primarily to outputs may not result in the optimal allocation of state resources, since increasing the number of inspections per business establishment to equal the national average may or may not have a meaningful effect on the rate of occupational injury and illness. Instead, we believe greater consideration should be given to whether Cal/OSHA’s resources are directed to those activities with the greatest likelihood of leading to improved compliance with occupational safety and health standards, thus improving safety and health outcomes. Broadly speaking, we find that the proposal to add inspection staff to increase planned inspections in high–hazard industries has merit in concept as a reasonable step to improving working safety and health outcomes. However, as described in greater detail below, we emphasize that the methods used by Cal/OSHA to target these inspections are critically important to using these additional resources in the most cost–effective way.

Proposal Likely to Meet State Statutory Requirements and Help Meet Federal Expectations

Providing Requested Resources Would Likely Result in Cal/OSHA’s Compliance With State Requirements . . . Cal/OSHA estimates that 4 inspectors and 16 assistant district managers will allow for sufficient new inspections to (1) meet statutory timelines for initiating inspections following formal complaints, (2) meet the statutory requirement to perform repeat inspections of at least 20 percent of business establishments with serious violations, and (3) increase inspections of worksites prior to granting permits for high–risk activities. We find these estimates reasonable, and think it is likely that approving these positions would allow Cal/OSHA to meet these statutory requirements.

. . . And Facilitate Meeting Certain Federal Expectations. We also find it likely that the 4 inspectors and 16 assistant district managers mentioned above would contribute to decreasing inspection lapse time, helping to address federal OSHA concerns.

Creation of Assistant District Manager Position Could Streamline Inspection Processes . . . Establishing the assistant district manager classification could also contribute to reduced inspection lapse times as a larger pool of staff would have the ability to approve citations and perform other tasks currently performed primarily by district managers.

. . . But Proposal Does Not Extend Assistant District Manager Concept to High–Hazard Unit. While the proposal would provide assistant district managers to the portion of Cal/OSHA that deals primarily with complaints (as well as other types of inspections), the proposal would not provide assistant district managers for the high–hazard unit, which, under the proposal, would receive significantly increased inspection staff and presumably could face similar challenges with inspection timelines. It is unclear to us at this point why the need for increased management–level inspectors in Cal/OSHA more broadly, as articulated in the proposal, would not apply to the high–hazard unit. To the extent increased management–level staff are needed in the high–hazard unit, the Legislature could consider replacing some of the inspector positions proposed for the high–hazard unit with assistant district managers.

Relatively Low Numbers of Inspections Per Inspector a Concern. The Governor’s proposal notes that, in 2012, Cal/OSHA inspectors each conducted 43 inspections on average, while inspectors in other states that administer occupational safety and health enforcement on behalf of federal OSHA conducted 50 inspections on average. We think it is important, as the Legislature considers approving additional inspection staff for Cal/OSHA, for Cal/OSHA to take steps to improve the productivity of Cal/OSHA inspectors. The proposal acknowledges that measures should be implemented to increase inspector productivity. To ensure accountability for additional approved resources, Cal/OSHA could be required to report to the Legislature on inspector productivity.

No Issues With Proposed Legal and Support Staff Increases. We have reviewed the justification for the proposed additional legal and support staff and find it reasonable. We raise no issues with this aspect of the Governor’s proposal.

Proposal to Increase Planned Inspections in High–Hazard Industries Has Merit

Cal/OSHA Activities Affect Worker Safety and Health Outcomes in Different Ways. Activities undertaken by Cal/OSHA can affect worker safety and health outcomes in different ways. On the one hand, Cal/OSHA engages in consultations with business establishments to assist them in developing plans and procedures to comply with occupational safety and health standards and prevent workplace injury and illness. On the other hand, Cal/OSHA engages in enforcement through inspections, including investigating accidents; responding to complaints; and initiating discretionary, planned inspections. Both of these primary activities contribute to reducing occupational injury and illness.

Conducting Planned Inspections Is Reasonable Approach to Improving Worker Safety and Health Outcomes. In order for enforcement inspections to be most effective at improving worker safety and health outcomes, it is important that they are focused on business establishments with the highest likelihood of improved compliance with occupational safety and health standards (in other words, those with the most serious, unaddressed violations). Responding to complaints is one way to target enforcement inspections on business establishments that are more likely to have a violation. As discussed previously, Cal/OSHA’s inspection activities are primarily driven by complaints. However, relying solely on complaints will not always lead to inspections in business establishments with the most serious violations, as some violations are not reported and not all violations that are reported are the most serious. Planned inspections, provided they are targeted to business establishments with the highest likelihood of improved compliance, can help fill gaps in enforcement in response to complaints.

Targeting High–Hazard Industries Is Relatively Cost–Effective Use of Planned Inspection Resources. Because high–hazard industries by definition have a higher rate of workplace injury and illness, and because inspections in high–hazard industries result in a higher rate of serious violations than other types of inspections, increasing planned inspections in these industries is a more cost–effective way to improve worker safety and health outcomes through planned inspections than randomly targeting all business establishments in the state.

High–Hazard Targeting Methodology Is Critical to Effectiveness of Planned Inspections. However, because the number of business establishments in high–hazard industries is so large (roughly 30,000) relative to the number of annual planned inspections for these business establishments (about 400 currently and about 1,000 if proposed additional inspectors are approved), additional targeting is critical to ensure that inspections of business establishments in high–hazard industries are focused on those establishments with the highest likelihood of improved compliance. At a high level, the current high–hazard targeting methodology used by Cal/OSHA includes the following basic steps.

• First, 3 or 4 industries are selected annually for targeting from a list of roughly 20 industries that are determined to be high hazard. As mentioned previously, high–hazard industries are those with a rate of serious occupational injury and illness that is at least twice the private sector average. In the past, typical high–hazard industries have included roofing contractors, structural steel and precast concrete contractors, ferrous metal foundries, janitorial services, commercial bakeries, and others. The four industries selected for targeting are chosen based on a variety of factors, including whether federal OSHA is requiring enforcement emphasis on that industry, whether Cal/OSHA has found serious violations in that industry in the past, and practical considerations such as the ease of accessing the worksite, to name a few.
• Once the four industries are selected for targeting, Cal/OSHA identifies business establishments in those industries with ten or more employees.
• From this pool of business establishments, Cal/OSHA creates a random list of 100 business establishments (for each selected high–hazard industry) for planned inspection.

Targeting Methodology for High–Hazard Industries Could Potentially Be Improved. While current Cal/OSHA practices do focus inspections on business establishments in high–hazard industries, Cal/OSHA may not be using the best available data, such as workers’ compensation claims data and survey data on injuries and illness provided by the federal government, to narrow the pool of business establishments in high–hazard industries for potential enforcement targeting. Cal/OSHA has indicated that it has used some of these data sources for additional targeting in the past and is considering ways to improve the use of these types of data sources in the future. Given that Cal/OSHA’s practices are in a state of development, we think it would be beneficial for the Legislature to require Cal/OSHA to justify how its current targeting practices would allow for the cost–effective use of the proposed 14 additional inspectors for high–hazard industries and describe efforts to improve targeting effectiveness in the future.

Proposed Number of Additional Inspection Staff for High–Hazard Inspections Is Reasonable. State requirements place a high priority on investigating complaints of both serious and nonserious violations. Given these existing requirements, the primary remaining avenue for increasing enforcement as a way of improving worker safety and health outcomes is to increase planned inspections. Similarly, because Cal/OSHA activities are constrained by state requirements relating to inspections in response to complaints, it would likely be difficult to divert existing inspection resources to pursue additional planned inspections. As a result, we find the Governor’s proposal to provide additional inspection staff for planned inspections in high–hazard industries to be reasonable. We note, however, that although additional planned inspections in high–hazard industries could reduce the rate of worker injury and illness, it is difficult to know how much improvement in outcomes would result from a given increase in inspections. As a result, it is difficult to determine exactly how many additional planned inspections should be performed. In light of this uncertainty, we think the number of staff proposed by the Governor for high–hazard inspections reflects a reasonable attempt at determining the appropriate level of additional inspections. On an ongoing basis, staffing levels for planned inspections should be guided by data on the extent to which newly approved positions helped improve compliance with occupational safety and health standards.

Recommendations

Approve Requested Staffing Levels. We find that the increase in positions proposed by the Governor is likely to (1) allow Cal/OSHA to meet requirements in state law that currently are not being met and (2) improve worker safety and health outcomes by increasing planned inspections in high–hazard industries. Accordingly, we recommend that the Legislature approve the requested level of positions, subject to a potential change in the mix of positions as discussed below.

Require DIR to Testify on the Benefits and Costs of Extending the Assistant District Manager Concept to High–Hazard Unit. As noted above, it is not clear to us why the assistant district manager classification is needed for general Cal/OSHA enforcement activities, but not for planned inspections in high–hazard industries. Accordingly, we recommend that DIR comment on the costs and benefits of extending the assistant district manager concept to the high–hazard unit by potentially replacing some of the inspectors proposed for the high–hazard unit with assistant district managers.

Require DIR to Testify on Effectiveness of High–Hazard Targeting and Evaluation Methodologies. We emphasize that the methodology used by Cal/OSHA to target planned inspections of business establishments in high–hazard industries is critical to ensuring that new inspection staff are used as cost–effectively as possible to improve worker safety and health outcomes. We recommend that the Legislature require DIR to describe (1) how its current methodology uses available data to focus planned inspections on those business establishments with the highest likelihood of improved compliance with occupational safety and health standards and (2) what changes are being considered to improve this targeting methodology.

Establish Formal Reporting Process on Proposal Outcomes. As noted above, we believe that decisions about inspector staffing levels and allocation of enforcement resources should be tied to broader Cal/OSHA outcomes. Accordingly, we recommend that the Legislature require DIR to report no later than the start of the 2017–18 budget process on the outcomes of its enforcement activities, including the impact of positions approved as part of the 2015–16 budget package. Specifically, the Legislature should require DIR to report on trends since 2015–16, including information on:

• The extent to which Cal/OSHA has improved compliance with requirements in state law and federal expectations.
• The rate of serious violations from different types of inspections (such as inspections in response to formal and informal complaints of serious and nonserious violations and planned inspections) and how the rate of serious violations from planned inspections compares to the federal OSHA benchmark.
• The extent to which Cal/OSHA’s high–hazard targeting methodology results in planned inspections in those industries with the highest likelihood of improved compliance with occupational safety and health standards.
• The extent to which existing requirements in state law may hinder Cal/OSHA’s ability to effectively allocate enforcement resources.