Edition No. 6

Multi-Employer Worksites: OSHA Changes That Could Impact Your Business

Have you read the safety programs of the subcontractors working at your site? Did you know that you’ve taken on their safety plans and programs when you hired them? If your company is based in California, you should be aware of recent developments in multi-employer workplace regulations. If you’re not in California, be forewarned that these regulations may be coming soon to your state.

A multi-employer worksite is defined as a workplace where more than one employer is working, primarily under a host employer/contractor relationship. Prior to January 2000, if a person was injured on a multi-employer worksite, Cal-OSHA could only cite the employer of the injured person. This was true even if that employer did not create the hazardous condition, or the person was injured as a result of another employer’s actions or negligence.

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As of January 2000, Cal-OSHA enacted a new set of rules that allow them to cite other employers on a multi-employer site when an injury occurs. The new regulations apply to construction work and general industry work (e.g. manufacturing, business office).
For now these regulations only pertain to California, but other states are watching the Golden State; Federal OSHA is also doing their due diligence on multi-employer liability. Consider this a trend in safety and because the regulations are applicable nationwide, expect that other states will soon adopt similar regulations.

Types of Employers

The Cal OSHA regulations define four categories of employers on a multi-employer worksite when an injury occurs: the Exposing Employer, the Creating Employer, the Controlling Employer, and the Correcting Employer. The Exposing Employer is the employer whose employee was injured. The Creating Employer is the employer who actually created the hazard or an employer whose employee created the hazard. The Controlling Employer is the employer who was responsible, by contract or through actual practice, for safety and health conditions on the worksite (i.e., the employer who had the authority for ensuring that the hazardous condition is corrected). And the Correcting Employer is the employer who had the responsibility for actually correcting the hazard.

Applying this Regulation

Let’s look at a hypothetical example. Your company has a general services contract with Management Company (MC) to manage all facilities-related maintenance, servicing, and new installations of equipment. You need to have a wall installed to subdivide a manufacturing area from a test area. Management Company, acting as the general, prime, or managing contractor hires subcontractors to perform the work under an MC project manager. MC hires the following subcontractors to perform the work: Acme General Contractors to build the wall; Acme contracts Chicago Scaffold to erect a scaffold for use by the contractors; Foremost Electric for the electrical work; and Premier Painters to finish the wall and paint it.

Chicago Scaffold erects the scaffold per the OSHA regulations. Acme constructs the basic wall using the scaffold. A Foremost Electric employee using the scaffold removes a section of guardrail to be able to install electrical conduits and then fails to replace the guardrail. Premier Painters has an employee who falls off the scaffold because of the missing guardrail and suffers disabling injuries.

Cal OSHA investigates and determines that the violation is classified as serious with a fine of $25,000. Prior to January 2000, Cal OSHA could only cite Premier Painters for the $25K since they are the employer of the person who was injured.

Potential fines

Under the new rules, the following fines could be levied upon the various parties with liability under the Multi-employer Workplace Regulations:

Your Company, as the Controlling Employer - $25,000
Management Co., as the Correcting Employer - $25,000
Foremost Electric, as the Creating Employer - $25,000
Premier Painters, as the Exposing Employer - $25,000

Cal OSHA regulations do allow relief from citation for the Exposing Employer (Premier Painters) under certain situations, but here’s the crux of the matter. A host employer and contractor or subcontractor create a liability under the Multi-employer Workplace Regulations either by contractual relationship or by providing work direction or control in lieu of a contractual relationship (e.g., a representative of one employer directs the safety actions of another contractor).

Staying in Compliance

Following are two recommendations to make sure you are in compliance. First, hire only contractors who have very good safety records (work/accident experience) and have strong safety programs, including documentation of implementation and disciplinary action programs.
Secondly, hire only contractors who can demonstrate they have programs that comply with the Cal OSHA requirements (provide copies of such things as the IIPP, Haz Comm, and required implementation documentation – inspections, training records, etc.).

There are many other recommendations for service providers, contractors, and subcontractors.

EORM has qualified and experienced consultants who have worked with multi-employer worksites in California, helping companies prioritize issues and implement plans and procedures. We can evaluate a company’s written safety programs and look for hidden areas of connection to contractors and liabilities. If you’d like more information about EORM’s multi-employer worksite services, either in regard to your current situation in California or to determine future regulations that may be coming to your state, please contact your local EORM consultant or call 800-648-1506.