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Study examines impact of OSHA inspections on work safety, work comp costs

For the past four decades, the Occupational Safety and Health Administration (OSHA) has come under fire from both organized labor groups and business interests. The former asserts that the federal agency is consistently failing to take the necessary steps to prevent work injuries, while the latter asserts that the federal agency imposes unnecessary costs through inspections and regulations.

Interestingly, a group of three professors from the University of California, Harvard and Boston University decided to put these assertions to the test by examining whether OSHA inspections of industrial workplaces were effective in reducing work injuries and/or had a negative impact on the financial health of these businesses.

In order to achieve this, the professors compared 409 workplaces that were inspected by California's Occupational Safety and Health Administration (Cal/OSHA) from 1996 to 2006 with 409 random workplaces that were not inspected during this same timeframe.

(California was selected because during the 10 years of the study it conducted random inspections as opposed to merely investigating complaints.)

"We went in not really knowing what to expect, because from my perspective the rhetoric on both sides seems in some ways convincing but in some ways extreme," said Professor Michael Toffel of Harvard Business School. "It seemed like a real puzzle that people had such strong opinions without a whole lot of evidence."

The study, published in the latest edition of the journal Science, determined the following:

  • Those companies subjected to a random inspection by Cal/OSHA had 9.4 percent fewer work injuries than companies not randomly inspected
  • Those companies subjected to a random inspection by Cal/OSHA were not more likely experience a negative business impact (i.e., loss of jobs and/or sales, decreased credit ratings)
  • Those companies subjected to inspection by Cal/OSHA had work comp costs that were 26 percent lower than companies not randomly inspected (when work injuries were reported)

These findings were embraced by several prominent industry groups.

"What the study tells us is that protecting your workers on the job and keeping them safe is good for workers but is also good for business," said Peg Seminario, the AFL-CIO's director of safety and health. "What's too costly is not addressing injuries and illnesses. We can't afford not to protect people."

Stay tuned for further developments in the area of workers' compensation defense law ...

This post was provided for informational purposes only and is not to be construed as legal advice.


Insurance Journal, "Safety inspections don't hurt businesses; do lower workers' comp costs: Study," Scott Malone, May 17, 2012

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