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OSHA's ergonomics standard causes lawsuits and controversy
Editor's note: On March 7, 2001, both houses of Congress voted to repeal OSHA's ergonomics standard in a joint resolution signed by President Bush on March 20, 2001. The repeal does away with OSHA's recently-adopted ergonomic standards for employers, and prohibits OSHA from adopting similar rules in the future. However, it does allow OSHA to implement "more reasonable protections" that will be less costly and protect workers from ergonomic injuries.
Federal ergonomics standards for the workplace, proposed by the Occupational Safety and Health Administration (OSHA) on Nov. 13, have sparked heated reaction from insurers and employer associations.
Citing 600,000 repetitive-stress injuries each year that result in lost work time, OSHA's new regulation mandates workplace ergonomics programs to cut the number of such injuries in half during the next decade. Under the new regulation, employers are required to implement an "ergonomics program" to manage musculoskeletal injuries in manufacturing jobs, jobs requiring manual labor, and any job for which an employee has reported a musculoskeletal injury.
What's an ergonomics program?
OSHA gives the following guidelines for what's included in a successful program:
Find out more about the new regulation at OSHA's Web site.
Employers must provide workers with information on musculoskeletal disorders (MSD) starting Oct. 14, 2001.
Insurance trade groups, including the Alliance of American Insurers (AAI), the Independent Insurance Agents of America (IIAA), and the National Association of Independent Insurers (NAII), together with employer trade associations, say the new regulations are too vague and will be expensive to implement.
Insurers worry that ergonomic standards will mean bigger payouts for workers comp claims, while employers argue that the expense of federally regulated ergonomics programs outweighs the benefit of greater worker productivity.
"The ergonomic rule is costly and heavy on administration," says David Farmer, vice president of federal affairs at the Alliance of American Insurers, a property-casualty insurance trade association. "Businesses could be required to create company-wide ergonomic programs and massive modifications on very slight grounds," Farmer says.
Scientific grounds for the OSHA ruling are lacking, detractors say. The Clinton Administration commissioned a study on workplace ergonomics, to be completed by the National Academy of Sciences (NAS) in January 2001, which is expected to give details on whether workplace ergonomics programs are effective or necessary.
"[The NAS study] may say there needs to be more federal oversight of ergonomics, or that it shoud be regulated at the state level, or that ergonomics programs are needed only in certain industries," says Robert Rusbuldt, executive vice president of the IIAA. "We think that OSHA should, at a minimum, wait until that study is released, and make their final determinations at that point."
A 1999 NAS ergonomics study, however, concluded that MSDs may be related to work, says Gary Orr, an OSHA ergonomist who helped to develop the new standards. OSHA expects little new or different information to arrive in the 2001 version.
In addition, insurers allege that the OSHA standard interferes with the state-centered workers compensation system under which each state decides what benefits accrue to injured workers who are on disability leave. The OSHA rule requires employees with MSDs to be compensated at a higher rate than is mandated for workers with other injuries in most states: Workers would receive 90 percent of average weekly wage, compared with the more typical, state-mandated 66 percent untaxable benefit for other injuries.
To receive benefits for an ergonomic injury, employees would not need to file a workers compensation complaint if the OSHA regulation becomes law. The regulation stipulates that if a worker is placed on restricted duty because of a musculoskeletal injury, the employer must continue to pay 100 percent of the worker's typical wage. If the employee must miss work altogether, the employer must pay 90 percent of the worker's regular wage.
"It's separate from workers comp," Orr says. "The employee could make a claim on workers comp if they need medical treatment, because [the OSHA regulation] does not provide for medical treatment. In that case the employer could offset the 90 percent wage requirement with the workers comp benefits."
Twelve insurers and the American Insurance Association have filed a lawsuit against OSHA in Richmond, Va. alleging that OSHA has no authority to regulate injured worker benefits. The 12 insurers are Ace USA, American International Group, CGU, Chubb, CNA, Fireman's Fund, The Hartford, Kemper, Liberty Mutual, PMA, Royal & SunAlliance, and Travelers. The IIAA is also planning a lawsuit against OSHA, to be filed in conjunction with other industry groups, Rusbuldt says. The AAI has joined the lawsuit filed against OSHA by the National Council on Ergonomics.
Organizations disagree about how much it will cost to implement the OSHA standards. OSHA estimates that $4.5 billion will be spent nationwide, but says that ergonomic improvements can garner $9 billion in savings. Industry groups dispute that claim with the results of a recent study by the Employment Policy Foundation, which finds that the new regulation would cost $126 billion. Meanwhile, the United States Small Business Administration, a government agency, calls the $4.5 billion price tag "underestimated."
The regulation is subject to a review by Congress; if approved, it will become effective on Jan. 16, 2001.