BILL ANALYSIS
AB 2774
Page A
Date of Hearing: May 5, 2010
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 2774 (Labor Committee) - As Amended: April 14, 2010
SUBJECT : Occupational safety and health.
SUMMARY : Codifies a definition for "serious physical harm" in
the statute governing occupational safety and health.
Specifically, this bill :
1 Defines "serious physical harm" as any injury or illness,
specific or cumulative, occurring in the place of employment
or in connection with any employment, which is the consequence
of a condition, practice, means, method, operation or process
that meets any of the following:
a) Requires inpatient hospitalization for a period in
excess of 24 hours for other than medical observation.
b) Causes an employee to suffer the loss of any member of
the body.
c) Causes an employee to suffer any serious degree of
permanent disfigurement.
d) Could reasonably lead to impairment of a part of the
body by substantially reducing its efficiency on or off the
job for more than 24 hours.
2)Specifies that a single condition, practice, means, method,
operation or process can be properly classified as resulting
in "serious physical harm."
EXISTING LAW :
1 Provides that a "serious violation" of occupational safety and
health law shall be deemed to exist in a place of employment
if there is a substantial probability that death or "serious
physical harm" could result from a violation.
2)Does not contain a statutory definition for "serious physical
harm."
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FISCAL EFFECT : Unknown
COMMENTS : This bill attempts to address an issue of
significant concern that has been raised by, among others,
worker advocates, the Division of Occupational Safety and Health
(DOSH), and the federal Occupational Safety and Health
Administration (OSHA): how "serious violations" are defined and
cited under California law.
General Background on Types of Citations and Penalties Under
California Law
Under California law, an employer may be issued a citation by
DOSH for an alleged violation of the law which affects the
safety or health of employees. Citations may be issued for the
following reasons:
A "regulatory violation" - cited when an employer fails
to comply with record keeping, posting or permit
requirements.
A "general violation" - cited when an accident or
occupational illness resulting from violation of a standard
would probably not cause death or serious physical harm,
but would have a direct or immediate relationship to the
safety or health of employees.
A "serious violation" - cited where there is substantial
probability that death or "serious physical harm" could
result from a condition which exists - or from practices,
operations or processes at the workplace.
A "willful violation" - where evidence shows that the
employer committed an intentional and knowing violation-as
distinguished from inadvertent or accidental or ordinarily
negligent-and the employer is conscious of the fact that
what they are doing constitutes a violation, or is aware
that a hazardous condition exists and no reasonable effort
was made to eliminate the hazard.
A "repeat violation" - when a recurrence of the
previously cited standard, regulation, order or condition
is found within three years of the previous violation
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becoming a final order. Repeat violations differ from
willful violations in that they may result from an
inadvertent, accidental or ordinarily negligent act. If a
repeat violation is also willful, a citation for willful
violation is issued.
Civil penalties are issued to employers for alleged violations
and/or failure to abate a violation. An employer who receives a
citation for a "serious violation" may be assessed a civil
penalty of up to $25,000 for that violation. Penalties for
"general" and "regulatory" violations may be assessed up to
$7,000 for each violation. A penalty of not less than $5,000
nor more than $70,000 may be assessed an employer who willfully
violates any occupational safety and health standard or order.
The maximum civil penalty that can be assessed for each repeat
violation is $70,000.
Criminal penalties may also be levied in certain cases. For
example, a willful violation that causes death or permanent or
prolonged impairment of the body of any employee results, upon
conviction, in a fine of up to $250,000 or imprisonment up to
three years, or both - and if the employer is a corporation or
limited liability company, the fine may not exceed $1.5 million.
Anyone convicted of making a false statement or certification
on records or other documents required under the Cal/OSHA
program is subject to a fine of up to $70,000 or imprisonment up
to six months, or both. The law also contains misdemeanor
provisions relating to matters such as knowingly or negligently
violating a workplace safety and health regulation, repeatedly
violating a regulation, or refusing to comply with a regulation,
and thereby creating an employee hazard. Criminal penalties are
enforced by the local district attorney.
"Serious Physical Harm" and the 1985 Abatti Farms/Produce Case
As discussed above, current California law provides that a
"serious violation" shall be deemed to exist in a place of
employment if there is a substantial probability that death or
"serious physical harm" could result from a violation (Labor
Code 6432(a)). However, the code does not contain a specific
definition of the term "serious physical harm."
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However, case law does provide some guidance. The seminal
decision is a 1985 Decision After Reconsideration (DAR) issued
by the Occupational Safety and Health Appeals Board (Appeal
Board) in Abatti Farms/Produce<1>.
The Abatti Farms/Produce case involved a citation issued against
an employer for a "serious violation" related to the use by
farmworkers of short lettuce knives to cut tall weeds between
mature heads of lettuce.
In its decision, the Appeals Board first noted that the statute
does not define the term "serious physical harm." The Appeals
Board noted that prior Appeals Board decisions had essentially
equated the term with "serious injury or illness," which is
defined in statute<2>. However, the Appeals Board stated that
that definition was "inadequate" under the circumstances of that
case.
Instead, the Appeals Board adopted a different definition for
"serious physical harm" by stating the following:
"For the purpose of the Act, the Appeals Board defines
'serious physical harm' as an injury or illness, immediate
or cumulative, occurring in the place of employment or in
connection with any employment which is the consequence of
a condition, practice, means, method, operation or process
which requires inpatient hospitalization for a period in
excess of 24 hours for other than medical observation, or
which causes an employee to suffer a loss of any member of
the body, or which causes an employee to suffer any serious
degree of permanent disfigurement, or which reasonably
could lead to impairment of part of the body by
substantially reducing its efficiency on or off the job for
more than 24 hours. A single such practice can be properly
classified as serious." (emphasis provided).
Critics have alleged that subsequent Appeals Boards (including
the present one) have limited the scope of this definition by
improperly limiting its application only to cases involving
cumulative injury or illness. For the vast majority of other
"serious violation" cases, critics contend that the Appeals
Board has instead reverted to merely applying the "serious
---------------------------
<1> 1985 CA OSHA App. Bd. LEXIS 121
<2> See Labor Code 6302(h).
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injury or illness" definition to define the term "serious
physical harm."
Why Does It Matter?
As discussed above, current California law provides that a
"serious violation" shall be deemed to exist in a place of
employment if there is a substantial probability that death or
"serious physical harm" could result from a violation (Labor
Code 6432(a)).
Therefore, the existence (or lack thereof) of an adequate
definition of "serious physical harm" affects the ability of
"serious violations" proposed by the DOSH to be upheld
throughout the appellate process.
Critics allege that currently (with no statutory definition for
"serious physical harm") far too many citations issued after
serious injuries or fatalities are reclassified as general
violations. Therefore, they contend that employers who should
be cited and penalized appropriately for serious violations are
instead given a "slap on the wrist" and issued a general
violation citation instead.
Moreover, critics contend that the inadequate definition
currently applied by the Appeals Board also impacts the behavior
of DOSH to issued proposed serious violation citations in the
first place. The attached "Appendix" contains information on
the percentage of all citations issued as "serious" for
California as compared to other states with state-run OSHA plans
(and compared to federal OSHA). That data indicates that
California issues "serious" citations in 19 percent of all
violations, compared with an average of 43 percent for other
state plans and 77 percent for federal OSHA.
Critics also point to other interpretations of the current
Appeals Board that make it exceedingly difficult to prove
"serious violation" cases. For example, the Appeals Board has
also applied a strict interpretation of the requirements that
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there be a "substantial probability" that serious physical harm
occur - at least a 50 percent chance. In fact, in a recent
article the Chief of DOSH characterized this interpretation by
stating, "That is impractical, unrealistic and calculated to
make it almost impossible for us to meet our burden.<3>"
In addition, there have been concerns that the Appeals Board has
erected extremely high evidentiary standards for expert
testimony by DOSH inspectors and others in serious violation
cases. Recent Appeals Board decisions have found DOSH
inspectors not competent to testify as to likelihood of serious
injury as well as other matters well within an inspector's
training and knowledge. Again, the Chief of DOSH has publicly
criticized this interpretation, stating, "It would seem that the
public interest might be better served if the highly paid and
trained safety engineers and industrial hygienists who conduct
investigations and issue citations are allowed to offer
testimony as to why they have classified a citation as serious.
An administrative law judge might find their testimony
compelling or not so compelling, but it seems inconsistent with
common sense to disallow them the opportunity to offer their
opinion at hearing.<4>"
Recent Federal OSHA Letters and Audit
Critics here in California are not the only ones to have raised
concerns about this issue.
In recent months, federal OSHA has commenced an audit of DOSH
(including a "special study" of the Appeals Board) looking at a
number of issues. However, federal OSHA has raised particular
concerns about the issues involving "serious violations" and the
current Appeals Board's interpretation of the term "serious
physical harm."
In a January 8, 2010 letter to the Chair of the Appeals Board,
federal OSHA stated the following:
---------------------------
<3> Cal-OSHA Reporter Vol. 37, No. 2 (January 15, 2010) Page
00-9649.
<4> Id. at 00-9650.
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"One area of concern that has been identified during our
initial review is regarding Appeals Board policy/approach
for reviewing the classification of serious violations.
Section 17(k) of the [Federal] Act provides that 'a serious
violation shall be deemed to exist in a place of employment
if there is a substantial probability that death or serious
physical harm could result from a condition which exists,
or from one or more practices, means, methods, operations
or processes which have been adopted or are in use, in such
place of employment unless the employer did not, and could
not with the exercise of due diligence, know the presence
of the violation.'
In the recently updated Field Operations Manual (FOM) for
OSHA, it states that the CSHO shall utilize the following
definition of 'serious physical harm':
Impairment of the body in which part of the body is made
functionally useless or is substantially reduced in
efficiency on or off the job. Such impairment may be
permanent or temporary, chronic or acute. Injuries
involving such impairment would usually require treatment
by a medical doctor or other licensed health care
professional?
?Unfortunately it appears that in defining 'serious
physical harm,' the Board's current policy limits this
phrase to the Labor Code definition of 'serious injury,' at
section 6302(h). There are other issues of concern
regarding the issuance of serious violation, however even
if this finding is correct, a determination of the [D]OSH
program not being at least as effective as?Federal OSHA is
possible." (original emphasis included).
The audit is expected to be completed and released in the next
several months.
Recent Regulatory Action (or Lack Thereof)
In response to the concerns raised by Federal OSHA, in January
the Chief of DOSH filed a rulemaking petition with the Appeals
Board suggesting that they address the issue of "serious
violation" and "serious physical harm" via regulation.
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The Appeals Board subsequently convened a series of "advisory
committee" meetings to consider these and other rulemaking
proposals. At one of the initial advisory committee meetings
there was significant discussion of this issue. The Cal-OSHA
Reporter article describing the advisory committee stated the
following:
"One solution could be to reintroduce a fourth criterion
for 'serious physical harm' that the Appeals Board adopted
in the Abatti Farms Decision After Reconsideration in 1985,
but that later boards apparently have disregarded. That
version of the board added an injury or illness 'which
reasonably could lead to impairment of part of the body by
substantially reducing its efficiency on or off the job for
more than 24 hours.' The other criteria include:
Inpatient hospitalization for more than 24
hours for other than observation.
Loss of any body member.
Serious degree of permanent disfigurement.
The DOSH Chief has told the board he believes there is no
legal impediment to it devising a formula for determining
serious physical harm using all four criteria, and the
board could clear up these issues through rulemaking.<5>"
However, at subsequent Appeals Board advisory committee
meetings, the Chair of the Appeals Board indicated that they
could not address the issue of "serious physical harm" via
regulation because in the Appeals Board's opinion it was
"substantive" in nature rather than "procedural." Therefore,
the Appeals Board is currently not proceeding with rulemaking on
this specific issue.
In response to this decision not to proceed by the Appeals
Board, the Chief of DOSH has announced that he intends to
address this issue administratively via "Director's Regulations"
under the authority of the Department of Industrial Relations
(DIR).
ARGUMENTS IN SUPPORT :
Supporters argue that this bill is a necessary first step to
---------------------------
<5> Id. at 00-9649.
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bring the California occupational safety and health program into
compliance with Federal OSHA law and will help strengthen the
Cal/OSHA program, improve enforcement, and result in better
working conditions for all California workers.
Supporters note that California's rate of serious citations is
currently the lowest in the country. Moreover, California is
likely out of compliance with the Federal OSHA program. In
January, 2010, Federal OSHA informed both DOSH and the Appeals
Board that it was conducting a Special Study of the state
program. While Federal OSHA has not yet issued its findings,
the letters indicated the state plan was likely not as effective
as the Federal OSHA program with respect to the definition of
"serious physical harm."
Supporters contend that this bill defines "serious physical
harm" to comport with Federal OSHA law and existing California
law. The legislation closely tracks the definition of "serious
physical harm" in the Federal OSHA Field Operation Manual and
closely tracks current settled California law as set first forth
in a 1985 Appeals Board case, Abatti Farms/Produce.
Supporters argue that this bill is needed because there is no
other avenue for defining "serious physical harm." The Appeals
Board has indicated it will not issue a regulation defining
serious physical harm. And even if the Department of Industrial
Relations issues such a regulation, the Appeals Board indicated
it is not obliged to follow that regulation. They note that the
Appeals Board recently articulated in a March 25 public meeting
its position that it is not obligated to follow the dictates of
a regulation issued by DOSH or the Department of Industrial
Relations because "director's regulations are for agencies under
the director" and organizationally the Appeals Board is not
under the Department of Industrial Relations.
Finally, supporters conclude that California's occupational
safety and health program has been the best in the country in
many regards for years. California cannot and should not risk
jeopardizing the entire program because one aspect is out of
compliance, particularly when this aspect of the problem may be
promptly and effectively addressed through legislation. This
bill is a crucial tool in the effort to improve Cal/OSHA's
ability to reach the worst offenders and to level the playing
field for legitimate law-abiding businesses. Supporters state
that this bill would benefit those employers that play by the
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rules by enabling Cal/OSHA more effectively to prosecute those
employers that gain an economic advantage from not protecting
their employees' safety and health.
ARGUMENTS IN OPPOSITION :
A coalition of employer groups, including the California Chamber
of Commerce, oppose this bill unless amended, arguing that this
overly expansive definition will lead to an increase in
citations classified as serious that are now and should continue
to be classified as general. A serious citation carries
significant financial implications so should therefore only be
issued where warranted.
Opponents point out that AB 1127 (Steinberg) of 1999
significantly increased penalties assessed on employers who are
cited for serious citations. Prior to this measure,
California's base penalty for a serious citation was the same as
Federal OSHA - $5,000. AB 1127 increased that base penalty more
than three times to the highest in the country at $18,000
(California Code of Regulations, Title 8, 336 (c) (1)). This
enormous increase in liability to employers significantly
increased the number of citation appeals, resulting in a backlog
that has just been cleared this year. Because of the level of
penalty that is assessed against an employer for a serious
violation, we should be judicious in issuing serious citations.
It is important that the violative condition and the hazard to
which the employee is exposed warrant such a penalty.
Opponents contend that this new definition will encourage
employer appeals because an employer's citation record is
considered in most competitive bidding situations. Employers
routinely appeal serious citations which they believe are
unwarranted. A significant increase in the number of serious
citations issued is likely to create a significant increase in
appeals to those citations. The current Appeals Board resources
cannot timely adjudicate an increase in appeals that is likely
from this expansive change to the serious violation definition.
However, opponents do state that they appreciate the discussions
that they have had with author's staff and sponsors of the bill.
The employer coalition has submitted amendments to the bill for
consideration and will continue to participate in good faith
discussions.
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REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation, AFL-CIO
National Lawyers Guild Labor & Employment Committee
Worksafe
Opposition
Associated General Contractors
Associated Roofing Contractors of the Bay Area Counties, Inc
California Association of Joint Powers Authorities
California Association of Sheet Metal and Air Conditioning
Contractors' National Association
California Automotive Business Coalition
California Chamber of Commerce
California Chapter of the American Fence Association
California Construction & Industrial Materials Association
California Farm Bureau Federation
California Fence Contractors Association
California Framing Contractors Association
California Independent Grocers Association
California Manufacturers and Technology Association
California Professional Specialty Contractors Association
California Restaurant Association
Engineering Contractors Association
Flasher/Barricade Association
Marin Builders Association
Residential Contractors Association
SafeCon
Walter & Prince, LLP.
Western Growers
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
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APPENDIX
FY 2009 Inspection Activity
Percent of All Violations Cited as Serious
---------------------
| | FY |
| | 2009 |
|--------------+------|
|Alaska | 26% |
|--------------+------|
|Arizona | 23% |
|--------------+------|
|California | 19% |
|--------------+------|
|Connecticut | 28% |
|*** | |
|--------------+------|
|Hawaii | 60% |
|--------------+------|
|Indiana | 57% |
|--------------+------|
|Iowa | 65% |
|--------------+------|
|Kentucky | 63% |
|--------------+------|
|Maryland | 45% |
|--------------+------|
|Michigan | 37% |
|--------------+------|
|Minnesota | 74% |
|--------------+------|
|Nevada | 28% |
|--------------+------|
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|New Jersey | 82% |
|*** | |
|--------------+------|
|New Mexico | 67% |
|--------------+------|
|New York *** | 58% |
|--------------+------|
|North | 38% |
|Carolina | |
|--------------+------|
|Oregon | 43% |
|--------------+------|
|Puerto Rico | 47% |
|--------------+------|
|South | 70% |
|Carolina | |
|--------------+------|
|Tennessee | 55% |
|--------------+------|
|Utah | 71% |
|--------------+------|
|Vermont | 66% |
|--------------+------|
|Virgin | 53% |
|Islands *** | |
|--------------+------|
|Virginia | 61% |
|--------------+------|
|Washington | 34% |
|--------------+------|
|Wyoming | 55% |
|--------------+------|
|All State | 43% |
|Plans | |
|--------------+------|
|Federal OSHA |77% |
---------------------
Source: U.S. Department of Labor, OSHA, FY 2009.
State Plan ENFC Report, 11.19.2009, Public and Private Sectors
included.
*** State Plan covers public employees only