OSHA Inspections Making an Impact

While some may consider federal workplace-safety inspections to be a costly drain on productivity, researchers have recently found reduced injury claims and lower workers' compensation claims as a result of such visits.

Thursday, July 5, 2012
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Many business leaders are of the opinion that Occupational Safety and Health Administration inspections are costly and undermine productivity. But a new study implies that couldn't be further from the truth.

In a paper published on May 17 in Science, researchers found inspections conducted in highly hazardous industries in California reduced injury claims by 9.2 percent and saved 26 percent on workers' compensation costs in the four years following inspections. On average, the study said firms that were inspected saved an estimated $355,000 in injury claims and compensation for paid lost work over that period.

What's more, the researchers found, the inspections had no discernible impact on companies' profits.

The study, co-authored by Harvard Business School Professor Michael Toffel, Hass School of Business (at University of California, Berkeley) Professor David Levine and Boston University doctoral student Matthew Johnson, analyzed workplace safety inspection data compiled by Cal/OSHA.

The study's authors point out that they removed some of the biases of previous studies, which evaluated the effectiveness of inspections using data resulting from complaints or previous accidents and analyzed OSHA logs, which tended to be more comprehensive following an inspection.

A 1993 California mandate requiring Cal/OSHA to conduct some of its workplace inspections randomly provided the researchers with an opportunity to evaluate the effectiveness of OSHA inspections that weren't spurred by a complaint or accident.

Toffel says he was surprised by the magnitude of the effects. "Going into the study," he says, "we figured there might be a small decline, but the effects are actually quite large."

The findings suggest that inspections had a lasting, across-the-board impact on companies with both small (less than $2,000) and large (more than $2,000) workers' compensation claims.

Further, the study concluded that there was no evidence that inspections led to declining sales or affected companies' ability to survive, he adds.

Toffler admits that the research includes "a number of caveats," including the fact that only California inspections were considered. Nonetheless, he says, the results were quite promising and suggest that further follow-up is warranted.

Despite the aforementioned limitations, Jim Johnson, group vice president of workplace safety initiatives for the National Safety Council in Itasca, Ill., believes the Toffel and Levine study is important and demonstrates how OSHA activities are making a difference.

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 "The OSHA inspection itself affords employers an opportunity to recognize where their safety policies and programs aren't fully effective and, in turn, encourages them to take action, whether that means dealing with a specific hazard noted in the workplace and eliminating or lowering it or changing the way you communicate and train employees," Johnson says. "There are many ways employers can identify and understand the areas where they can improve safety, and OSHA is one of them."

Johnson points out that the Toffler and Levine research was complementary to a study published on May 7 by the American Journal of Industrial Medicine. That study, "A New Estimate of the Impact of OSHA Inspections on Manufacturing Injury Rates," looked at injury data from the Pennsylvania workers' compensation program between 1998 and 2005 and found inspections with penalties at employers with between 20 and 250 employees reduced injuries by an average of 19 percent to 24 percent annually in the two years following the inspections.

Regardless of the presidential election results this fall, Johnson says, the latest research makes a strong case for future OSHA funding.


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