11 Possible Effects of a Contracted Federal OSHA on State Plans

Federal OSHA will be under additional scrutiny in the coming years as critics seek to overhaul the fifty-five-year-old agency. Opponents have asserted that OSHA has overstepped its constitutional boundaries and exercised excess authority through an administrative state. They argue that this overreach has had a detrimental effect on businesses' ability to implement effective workplace safety controls and instead places an undue burden on Industry to comply with regulatory statutes that have little impact on actual worker safety.

The Bureau of Labor and Statistics (BLS) states that since the establishment of OSHA in 1970, workplace accident trends have shown a significant decline. There has been a substantial drop in both the number of fatalities and overall injury rates, with the average worker death rate falling from around 38 per day in 1970 to approximately 15 per day in 2023. Most would argue some causal relationship between OSHA and this downward trend, but critics will point to market and technological drivers as the primary force driving workplace safety controls.

Contraction points for Federal OSHA:

· The executive order requiring a Regulatory Freeze Pending Review for all federal agencies has put the planned federal OSHA Heat Illness Prevention rules on ice. It seems unlikely any new record-making will occur under the current administration.

· The federal employee hiring freeze, buyout programs, and RTO rules will indeed affect the agency's ability to maintain current enforcement and service levels with fewer workers on the payroll.

· A DOGE audit could significantly impact the agency as it seeks to cut trillions in federal spending. Federal agencies that OSHA relies on for information and research, such as NIOSH and the NIH, could also be affected and in turn, have an impact on OSHA.

· A bill introduced to the House of Representatives, dubbed “NOSHA," seeks to repeal the OSH Act of 1970 and abolish OSHA as a federal agency. Industry voices tend to believe that this bill has little chance of passing Congress, but proponents use it as a talking point to discuss overhauling the agency.

The most common argument heard for abolishing or contracting federal OSHA is to “let the states deal with it.” After all, twenty-two states already have a state OSHA plan in effect. Can state OSHA plans function in a federal vacuum and what could the effects of a contracted federal OSHA be on a state plan? Some consideration should be given to the following possibilities:

1. State plans originally received their authority through the OSH Act of 1970. If the act is repealed could state plans be found unconstitutional in court? It seems like an easy statutory fix if the goal is to relegate safety to the states, but nothing should be assumed in a regulatory transformative time.

2. Federal OSHA can provide as much as half of the funding for a state plan. A contracted federal OSHA could place state plans into spiraling budget shortfalls if alternative funding cannot be found.

3. Absent a functioning OSHA, could insurance be the new enforcer? Requiring companies to comply with consensus standards and/or pay increased premiums. Insurance understands that reducing hazardous conditions by complying with safety rules reduces risk and, in turn, claims and costs.

4. Lacking regulatory drivers, worker safety will primarily be driven by the culture of the business itself. Some businesses will maintain and improve their safety programs. However, some industries and businesses will race to the bottom to cut up-front costs and labor.

5. Federal OSHA produces and enforces minimum standards. Absent these, states could have state plans that are not at least as effective as the current federal level is now. This leaves any regulatory body particularly vulnerable to industry lobbying.

6. Tort law could reenable employees' ability to sue their employers directly over unsafe work conditions. Lawsuits are notoriously time and resource consuming.

7. OSHA is the primary agency that can compel a business to implement corrective action to protect worker safety. Absent OSHA, who could, for example, require corrective action during a work-related post-death incident investigation?

8. Consensus standards, such as ANSI, NFPA, and ASSP, could primarily drive compliance or audit-based requirements. These standards are notoriously more stringent than OSHA standards and can be more challenging to comply with.

9. Trend-specific enforcement focuses, such as National Emphasis Programs (NEPs), could be put on hold under a leaner agency. NEPs use inspection data, injury and illness data, NIOSH reports, peer-reviewed literature, analysis of inspection findings, and other available information sources to target enforcement activity.

10. Any budgetary challenge would likely affect proactive OSHA programs that are not enforcement-related, such as Voluntary Protection Programs (VPPs), consultation programs, outreach, training, and research programs—some of state OSHA's most popular programs.

11. OSHA’s record-keeping rules and programs, such as the Injury Tracking Application (ITA), collect valuable national data on injury and illness trends. This system could be affected by a patchwork of state program data collection and ultimately impact safety professionals' ability to use data to target safety hazards and evaluate the effectiveness of implemented measures.

Major changes at Federal OSHA could significantly impact any state plan, including Oregon and Washington. The author suggests that we should all be careful what we wish for, as a shake-up could have unforeseen consequences.

Maintaining a safety program that exceeds regulatory compliance is valuable to any business. Safe companies understand that maintaining a fully functioning safety program provides a steady hand for the industry during regulatory ambiguity and change. Regardless of federal or state OSHA drivers, safe companies keep their businesses running by implementing effective safety programs. Smart companies will stay aware of a rapidly changing regulatory environment and make informed decisions regarding workplace safety.