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OSHA Urged to Watch Incentive Programs

Wednesday, June 13, 2012

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Can workplace safety incentive programs actually backfire, by becoming a numbers game that discourages reporting of injuries and illness?

They may—and federal safety officials need to be aware of that when basing their enforcement efforts on reporting rates, the U.S. Government Accountability Office is warning.

Safety incentive programs that offer bonuses, meals or other rewards for low injury rates may have the unintended effect of underreporting, the GAO found.

The Occupational Safety and Health Administration “needs to provide more detailed guidance on these programs so that employers do not use programs that illegally stifle a workers right to report a work-related injury or illness,” a GAO audit recently concluded in “Better OSHA Guidance Needed on Safety Incentive Programs.” 

Enforcement by the Numbers

OSHA requires employers to keep injury and illness logs, and the agency relies on these records in targeting enforcement efforts, the GAO noted.

But some experts and policy makers have questioned whether company safety programs that reward low numbers and punish high ones may end up influencing the reporting itself.

If so, they say, enforcement efforts and resources could be misdirected.

For example, GAO reported, in March 2005, 15 workers died and 180 others were injured during an explosion at the BP refinery in Texas City, TX. The refinery had a safety incentive program that tied workers’ bonuses to achieving low injury and illness rates.

A January 2007 study by an independent panel after the explosion found that workers feared reprisals for reporting potentially risky conditions at the refinery.

And in October 2009, GAO reported that safety incentive programs could provide disincentives for workers to report injuries and illnesses to their employers.

Rewarding Rates

In its new study, GAO reviewed academic literature, federal laws, regulations and OSHA guidance; surveyed a nationally representative sample of manufacturing worksites; and interviewed federal and state occupational safety and health officials, union and employer representatives, and researchers.

Although GAO found little research on the effect of safety programs and policies on reporting rates, experts told the agency that there was a link.

Manufacturers with safety incentive programs and other policies, by type, 2010

(GAO noted a distinction between rate-based safety incentive programs, which reward workers with money, gift cards or meals for achieving low rates of reported injuries or illnesses; and behavior-based programs, which reward workers for certain behaviors, such as recommending safety improvements.)

OSHA is not the only party looking at a company’s injury and illness rates, GAO noted. Insurance companies may base premiums on them, and potential contractors may ask to review them before signing a contract.

In fact, GAO found, manufacturers whose injury rates were requested by potential contracting companies were more than twice as likely to have rate-based safety incentive programs than manufacturers whose rates were not requested.

Discouraging Reporting

Experts and industry officials told GAO that rate-based programs may discourage reporting of injuries and illnesses.

For example, when an injury is minor or easy to hide, and the reward is large, “workers may not report their injuries to preserve their rewards,” the GAO found.

The potential for underreporting is even greater when team rewards are at stake. In such systems, “there may be pressure on all members of the team to not report injuries,” GAO said.

Workplace policies such as post-incident drug and alcohol testing may also discourage reporting, the experts told GAO.

Focus on Demerit Systems

About 25 percent of U.S. manufacturers had safety incentive programs in 2010, and most had policies that could affect injury and illness reporting, GAO reported.

About 22 percent of manufacturers had rate-based safety incentive programs; almost 70 percent had demerit systems, which discipline workers for unsafe behaviors, and 56 percent had post-incident drug and alcohol testing policies.

Most manufacturers had more than one safety program or policy, and more than 20 percent had several. Such programs and policies were more common among larger manufacturers.

Mixed Messages

The GAO said OSHA had taken only “limited action” to address the possible effect of rewards or sanctions on reporting.

GAO noted, for example, that some OSHA programs exempt employers with exemplary programs from routine inspections, while another prohibits rate-based incentive programs. Some of OSHA’s cooperative programs with employers address incentive programs, while others do not.

While OSHA provides information about safety incentive programs to employers, the OSHA’s field operations manual does not address the topic. Thus, some inspectors review safety incentive programs in the field, while others do not, GAO said.

And while OSHA can cite an employer for missing or incomplete records, it has no way to monitor underreporting.


GAO recommended that OSHA “provide guidance” about workplace safety incentive programs and policies “consistently across the agency’s cooperative programs” and add language about these programs and policies in its field operations manual.

OSHA told GAO that it agreed with the recommendations and planned to address them.


Tagged categories: Health and safety; OSHA; Workers

Comment from John Fauth, (6/14/2012, 11:34 AM)

This is a common miscalculation assocatiated with regulators and politicians alike... that regulation will not unintentionally influence individual behavior. It's the same reason that the Endangered Species Act unintentially causes the destruction of sensitive habitats on private lands to avoid land use restrictions. We don't live in a static world.

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