Ratcheting up Reporting Rules
Everyone agrees on the merits of reducing accidental workplace fatalities and serious injuries.
Yet, according to some employment lawyers, including the former head of the U.S Department of Labor’s Occupational Safety and Health Administration, impending OSHA reporting rule changes that go into effect on Jan. 1 are going to make things look worse.
Under the revised rule, employers will be required to notify OSHA of work-related fatalities within eight hours, and work-related in-patient hospitalizations, amputations or loss of an eye within 24 hours.
Previously, OSHA’s regulations required report of work-related fatalities and in-patient hospitalizations of three or more employees.
“That could lead to huge numbers in terms of reporting.” — Ed Foulke,partner, Fisher& Phillips
“Under the former rules, very rarely would more than three people go to hospital in a single incident, so the new rules can exponentially increase reporting,” said Ed Foulke, former head of OSHA under George W. Bush and a partner with Fisher& Phillips in Atlanta.
Also, all employers covered by the Occupational Safety and Health Act, even those who are exempt from maintaining injury and illness records (10 or fewer employees), are required to comply with OSHA’s new reporting requirements.
Foulke said the injury reporting requirements are “significant” changes.
To complicate matters, he said, OSHA has expanded the definition of amputations, so that even the loss of the tip of the finger, for example, without bone loss, now is considered an amputation, which is a reportable injury.
“That could lead to huge numbers in terms of reporting,” he said.
Foulke also said that the updated regulations add 25 new industries — such as “bakeries and tortilla manufacturers,” auto dealers, building supplies, beer, wine and liquor stores, performing arts companies and lessors of real estate — to those required to keep OSHA 300 injury and illness records.
Those records will be posted on the OSHA website, he said.
“OSHA never talked about it during this rule-making process for three years,” he said. “Plaintiff’s attorneys, unions, anti-industry groups and other organizations can easily obtain that information, and that could lead to increased litigation.”
According to the Bureau of Labor Statistics, 4,405 workers died on the job in 2013.
In announcing the new rules on Sept. 11, U.S. Secretary of Labor Thomas Perez said workplace injuries and fatalities are “absolutely preventable, and these new requirements will help OSHA focus its resources and hold employers accountable for preventing them.”
OSHA said it will not do an inspection based on every report, but rather will “interact” with the employers who file reports.
The “most obvious effect” of the new rules, said Bill Principe, a partner in Constangy’s Atlanta office, “is that when you report one of these types of cases, you can almost expect an OSHA inspection. And that gives you a chance to prepare properly. But no one knows at this point how long you are going to have to prepare.”
“A relatively minor accident could trigger additional citations.” — Nickole Winnett, senior associate, Jackson Lewis
On the flip side, Principe said, the new regulations could overwhelm OSHA, with the sheer volume of new data coming in.
“I would believe that these types of report cases almost would take the place of general inspection schedules,” Principe said. “OSHA hasn’t said that the call-ins definitely will trigger an inspection, but that could turn out to be the case.”
Nickole Winnett, a senior associate in the Washington, D.C. office of Jackson Lewis, said the new OSHA rules “will require additional resources and time spent on providing the information, responding to follow up questions and, in some cases, being investigated for these types of accidents.”
She noted that once OSHA decides to do a worksite inspection, it can look for other safety issues as well.
“A relatively minor accident could trigger additional citations,” Winnett said.
The best strategy for employers, Foulke said, is to know what OSHA standards apply to them and make sure the company is in full compliance.
“They need to know what is required within every applicable standard,” he said, estimating, for example, that 50 percent of employers in the U.S. today have not done a basic workplace hazard assessment. “It’s important for several reasons, including maintaining a safer workplace.”
Risks of Wearables
While wearable devices are being touted by many as the next big thing on the consumer computing front, opinions differ on whether or not gadgets like smart glass, fitness tracking bracelets and smart watches will ever match the hype.
Whether or not they succeed in terms of sales and eventual widespread acceptance, however, legal and insurance experts believe this latest tech trend will bring added risk, both for employers whose workers use wearable tech on the job and for those who manufacture and — by extension in some cases — manage those devices.
Much like “bring your own device” (BYOD), where employees conduct company business on their personal smart phones and tablets, wearable technology use requires strong cyber policies to avoid company exposure.
But wearable technology goes a step farther in that products such as smart glass (Google Glass is just one example) bring a new dimension to risks in such areas as workers’ comp and product liability.
Currently, there are mixed views on wearable technology’s true impact. On the optimistic side, according to Statista, an Internet-based statistics provider in New York City, the global wearable device market is expected to grow from $5 billion in 2014 to $12.6 billion by 2018.
Tempering that is a 2013 Harris Interactive poll of 2,577 U.S. adults, where overall opinions seem to be mixed, with Americans slightly skeptical. According to the Harris poll, about half of Americans believe wearable tech is just a fad (49 percent) and not likely to become as common as smartphones (also 49 percent). Roughly one-third of the respondents (35 percent and 37 percent, respectively) disagreed.
While the jury is out on the “stickyness” of wearable devices, their potential as workplace tools, for example, is undeniable. However, there exists the double-edged sword of balancing productivity with various risks.
Boston-based Anand Rao, a principal in PwC’s insurance practice, said that for the insurance industry, smart glass products can augment a claims professional’s capability of adjudicating claims.
“Smart glass products can create an almost a real-time assessment of losses in personal or commercial lines,” he said. “It could speed up efficiency. I can definitely see smart glass being used more in that area.”
Privacy Protections at Risk
Yet, while wearable technology may boost productivity aross several business sectors and in general areas, such as employee training, risk exposures are obvious, Rao said.
For example, an employee wearing company-issued Google Glass might become distracted and cause an accident. Or, they may injure themselves at work after becoming distracted.
“It’s definitely an issue by causing a distraction when driving or walking or doing other things,” he said. “The notion around changing someone’s focus, that is an obvious risk. If an individual consumer does it, there’s not much you can do. But if an employer has authorized use and something happens, it becomes a serious issue.”
Company-issued glass also can be used to invade someone’s privacy, as Google Glass is able to capture real-time facial images and video, and search and/or post data on that person.
Shawn Ram, technology practice leader at Crystal & Company in San Francisco, said companies that engineer and deliver wearable devices such as fitness wristbands also face exposure.
“If a fitness wristband device is collecting information on me, it puts me in a position whereby the company can be broaching privacy-related concerns,” he said.
The private health data on such devices also puts the manufacturer at risk if protected data is lost.
“That is a topic that is much discussed, but due to the current nature of wearables, you won’t find companies managing the risk like hospitals or large cloud-based companies,” he said.
PwC’s Rao said regulatory laws are needed. Right now, he said, it is unclear who owns the data and who can see the data generated by wearables.
“If a health or life insurance carrier is getting that data and charging a higher premium, that’s not what you want,” he said. “It must be used only for the purposes that have been stated. If insurers start making use of data to do something else, that’s not acceptable.”
Data Security Concerns
Christine Lyon, a partner in the Palo Alto, Calif., law office of Morrison Foerster, said there is concern that employees may use smart glass to collect and record proprietary information.
“For insurance carriers, risk managers and employers, the world of wearable devices will evolve very quickly, making it a challenge to keep up from a risk transfer perspective.” — Shawn Ram, technology practice leader, Crystal & Company
“This is not unique to wearables but it’s another front that requires attention,” she said. “And the smaller these devices get, the harder they are to identify that someone is using one. Also, the smaller they are, the easier they are to lose.”
She said wearables are similar to BYOD because a company’s workers may have data on third-party devices that have not been properly vetted.
Smart glass, she said, is a “different animal” than other wearables because it is so stealthy in collecting information — raising questions about when and how that data is used.
“This is fertile new territory because so much is unknown right now,” Lyon said.
But, she said, the focus should be more on data security than litigation at this point.
Companies need to establish policies with specific rules for the use of wearables, which means they should see if current policies are broad enough to cover the risks associated with wearables.
“We haven’t seen any claims or litigation yet around wearables,” Lyon said.
“Employers are dealing with it on an ad hoc basis for the most part.”
Michele Lange, director of legal technologies for Kroll Ontrack, a data recovery company based in Minneapolis, specializes in issues related to e-discovery and technology’s role in the law.
She said wearables should be included in a company’s BYOD policies to proactively address issues such as security of the device data and preservation and collection of electronically stored information (ESI) if a regulatory request is issued.
Video: Tech experts discuss medical uses of wearables at the SXSW conference in Austin, Texas.
“The only way to prevent liability is to completely disallow wearables,” she said.
“But we know that’s an imperfect solution. It’s better to manage their responsible use, considering the influx of the technology will be difficult to curtail.”
Lange noted that part of the allure of wearables is the promise of efficiency and convenience, and nowhere are these values more embraced than in the workplace. Thirty years ago, computers were not on every desk, but today it’s impossible to imagine the workplace without them.
“Whenever technology can offer a business a more efficient employee base and cost-savings due to increased productivity, it will catch on. It’ll be no different for wearables,” she said.
“As these devices evolve into stand-alone technologies, we can assume more issues will arise because they’ll begin to store their own data,” she said. “The tricky part for businesses and courts is knowing where to draw the line between personal and private data, and that which is relevant to litigation.”
Recovering data from a fitness tracking wearable, for example, could be a great tool to fight a workers’ comp claim. But it’s also a privacy law minefield touching everything from the Privacy Act of 1974 to potentially even HIPAA, she said.
Wearables are going to be a headache for employers, she said, calling the emerging technology a “high-risk, high-reward innovation.”
While tech-savvy firms may hand out wearables to employees to increase productivity, she said, more conservative businesses may not and risk missing a competitive edge.
But what happens if the wearable produces adverse health effects? Or if an employee who is driving to work and using work-issued Google Glass gets in a car accident?
Also, how can you protect trade secrets and intellectual property when an employee can record everything they look at through their glasses — with the employer being none the wiser?
“These are the questions lawyers will be asking in the coming years as even bigger tech players like Apple join the wearables industry,” she said.
Speaking of Google Glass as a potential headache-causing wearable, Ram said that product recall is another outcome that may dampen the hype around wearables. Risks arise as wearables become more invasive and closer to the skin.
In fact, in March 2014, the U.S. Consumer Product Safety Commission issued a total recall of the Fitbit Force, one of the most popular fitness tracking wristbands on the market.
Fitbit Inc. had sold more than one million Fitbit Forces, but some users developed allergic contact dermatitis to “the stainless steel casing, materials used in the strap, or adhesives used to assemble the product, resulting in redness, rashes or blistering where the skin has been in contact with the tracker,” according to the official CPSC recall notice.
“When you use a cell phone, you can put it down,” Ram said.
“Wearables are always on you, other than when charging. Recall for wearables is something not being adequately addressed by the insurance marketplace right now.
“For insurance carriers, risk managers and employers, the world of wearable devices will evolve very quickly, making it a challenge to keep up from a risk transfer perspective,” Ram said.
Ebola Sends Employers Wake-Up Call
Finally, it happened. The United State is experiencing its first cases of Ebola. A Liberian national living in Dallas died after being diagnosed with the virus, and now two of his treating nurses have now come down with the disease.
While the nation’s Ebola threat remains relatively minor right now, that’s hardly the case, of course, in the West African countries of Liberia, Nigeria, Guinea and Sierra Leone.
With the media reports as a backdrop, experts stress that recent Ebola media coverage on domestic shores is the perfect lynchpin for employers to review their emergency contingency plans already in place and update them, if necessary.
“The Ebola virus in Africa and the chikungunya virus in the Caribbean both demonstrate the need for employers and their employees to think about personal safety while traveling outside the United States,” said Dominick Zenzola, vice president and employee benefits manager for Chubb Accident & Health in Chicago.
“Employers have a duty of care to their employees who travel. Some prudent companies even have relocated business meetings and events to alternative destinations.” — Dominick Zenzola, vice president and employee benefits manager for Chubb Accident & Health
“Employers have a duty of care to their employees who travel. Some prudent companies even have relocated business meetings and events to alternative destinations,” he said.
Chicago-based Ed Hannibal, global leader of Mercer’s Mobility Practice, said that as more and more companies push deeper into global markets, safety and emergency planning for mobile employees has become an even more serious issue — from the executive on a single business trip to someone who locates to a country on a permanent basis.
Hannibal said employers should ensure their people systems are “linked up,” so they know where their employees are at all times, and where they have been or may be going.
Robert Quigley, U.S. medical director and senior vice president of medical assistance for International SOS, a Trevose, Pa.-based global medical and travel security risk services company, said employers have a “duty of care” to all their employees, but especially those who may need to work in high-risk countries or regions.
“The recent unfortunate Ebola outbreak should serve as a wake-up call for employers, to ensure they are doing the right thing,” Quigley said.
“Companies are reaching out to us, wondering if they are doing enough, or what is the benchmark in their industry segment. We have more than 10,000 clients, and many have a footprint in West Africa.”
Quigley also said it may be surprising that the companies with business in West Africa represent a wide spectrum of industry segments.
“Many of them want to know what everyone is doing in their segment, or what is [a] best practice for their industry,” he said. “One of our jobs is to help educate them, but depending on the sector, they will have a different risk tolerance.”
For example, a nongovernmental organization would have higher risk tolerance because their work typically takes them into some of the world’s most dangerous places.
Different clients have decisions to make, but the one thing they can’t do is make them on the fly, Quigley said.
Many plans, he added, are still based on the last pandemic with influenza, so it makes sense for employers to take a look at their current plan. For others who may not have any solution, they need to have something in place even if it’s somewhat generic and can be customized to meet special situations like Ebola.
“It’s not a decision to be made on the run and it must involve many levels of decision makers, from the C-suite down,” he said. “It requires systemic ownership and involvement.” — Robert Quigley, U.S. medical director and senior vice president of medical assistance, International SOS
“It’s not a decision to be made on the run and it must involve many levels of decision makers, from the C-suite down,” he said. “It requires systemic ownership and involvement.
“Having a pandemic plan on the shelf is not good [enough],” Quigley said, adding that employers should create a specific task force responsible for making sure such protocols and procedures are constantly updated.
Quigley compares the situation to company fire drills, which most employers conduct two or three times a year.
“You don’t want to [have to] invent protocol when there actually is a fire,” he said. “Call it whatever you want, but it needs to be planned and rehearsed. Having an updated plan is also a good morale builder, because it lets those employees know they mean something to the company because it is being proactive and taking measures to protect them.”
Mercer’s Hannibal emphasizes the importance of communications. He said plans must be very clear when sending employees out around the globe, noting that different locations will mean different levels of communication.
“For example, they should know that Ebola is not an easy virus to contract; they need to make sure they have briefed employees about the specifics for any potential risk,” he said.
At a basic level, Chubb’s Zenzola said, employers need to remind global travelers to check the list of travel alerts and warnings from the U.S. Department of State — which now includes Russia, Ukraine, Israel, Thailand, Egypt and Mexico — and from the Centers for Disease Control and Prevention before they book their trips and pack their bags.
“Right now, Ebola is the flavor of the month, but before it there was Mad Cow, SARS (severe acute respiratory syndrome), bird flu, West Nile. There will always be something,” said SOS’ Quigley.
“The Ebola outbreak must remind employers to ensure they have updated, effective emergency procedures and protocols in place.”