Outlook on the Federal Regulatory Agenda: A Tectonic Shift in Washington

The Trump Administration and Republican leaders in Congress have launched 2017 with several early actions on an agenda that, if implemented, would represent a tectonic shift in the U.S. regulatory landscape, particularly in the areas of environment, labor, health and safety.

Nominees and Advisors

The president’s nominees to head key agencies – Oklahoma Attorney General Scott Pruitt for the Environmental Protection Agency and burger chain executive Andy Puzder for Department of Labor – are widely known critics of the federal bureaucracy and government overreach. Pruitt led states’ efforts in recent years in major lawsuits against EPA. Puzder, who battled regulation in California, has warned that overly strict labor laws will lead employers to replacing workers with machines. Both nominees are now awaiting Senate confirmation.

The president also recently named activist investor and billionaire Carl Icahn as his special advisor on regulatory overhaul. He promised a regulatory moratorium and a rollback of key Obama Administration executive orders and memos on a host of topics. That’s exactly what’s transpired since Trump took office.

The President’s EPA transition team chief, libertarian think-tank advocate Myron Ebell, recently called the environment movement “the greatest threat to freedom.” He suggested last week that EPA’s budget should be cut by two-thirds, from 15,000 to 5,000 employees.

Executive Orders and a Regulatory Freeze

The President just this week signed an executive order promising that going forward for each new regulation issued, two old regulations would have to be eliminated. In announcing the policy, he noted “we’re cutting regulations massively for small business – and for large business” and that the annual impact on the economy of government rules would be “no greater than zero.”

The order follows an Inauguration Day memo from the President’s Chief of Staff Reince Priebus to all departments and agencies. The directive would freeze a number of recently finalized regulations for a 60-day review period. It also instructed agency heads to also consider delaying effective dates for regulations beyond the 60-day time period. The temporary moratorium on regulations is not uncommon for incoming presidents.

Indeed, several major rules that the Obama administration was speeding to the finishing line will be held up. Among them is the Department of Labor’s controversial overtime rule to boost worker pay, along with several EPA regulations.  Another on the slate is a rule to make hardrock mining operations show the financial ability to pay for contamination clean-up if closed. This is the first in a series of rules that EPA has anticipated would affect a range of industries in the future, including surface finishing.

Regulatory Reform Legislation on Capitol Hill

On Capitol Hill, Republicans with control of both legislative chambers on Capitol Hill have moved swiftly in the first few weeks of the new Congress to reshape the future of regulation. In its first week back in Washington, the House began action on and approved several regulatory relief bills, including:

  • the REINS Act (Regulations from the Executive in Need of Scrutiny) – requires Congress to approve any agency rule estimated to have more than a $100 million cost on the U.S. economy;
  • the Regulatory Accountability Act – requires agencies to complete a number of steps on a proposed rule, including weighing the direct and indirect costs and benefits of their rules on jobs and economic growth; and
  • the Midnight Rule Relief Act – allows Congress to repeal in a single vote any rule finalized in the last 60 legislative days of the Obama administration.

Since passage in the House, the Senate is now reviewing these measures, but Democrats have promised opposition there. The bills were passed by the House in earlier Congresses but were never previously acted on by the Senate.

In addition, House leaders have assembled a first short list of major Obama-era rules for repeal in the coming days. Republican leaders have promised to use their legal authority to scuttle the regulations under a rarely used legislative tool, the Congressional Review Act. The law, enacted in 1996, has been successfully invoked by Congress only once. In 2001, Republicans used it as President George W. Bush took office to overturn a major OSHA workplace ergonomics standard from the Clinton Administration.

EPA – Selected Regulatory Targets

Several major environmental regulations that the Trump administration has targeted for elimination, reform or delay include EPA’s Clean Power Plan to set carbon emission limits on power plants, the agency’s revised ozone standard and EPA’s controversial Clean Water Rule, which would determine which rivers, lakes, streams and ponds are subject to federal jurisdiction. The U.S. Supreme Court just this month agreed to hear arguments in litigation over the water rule. For surface finishing, EPA is still reviewing whether to propose tighter wastewater discharge limits for the industry, and NASF will continue to work closely with EPA and the Trump administration to inform the agency’s decision.

Department of Labor and OSHA – Selected Regulatory Targets

One of the most controversial labor regulations advanced by the Obama Administration has been the overtime rule. The rule, which would have raised the salary threshold for exemption from overtime pay, was blocked by a Texas district court judge just before it went into effect on Dec. 1, 2016. Both the incoming White House and Republicans in Congress have argued the rule should be scrapped, along with a growing list of other Obama-era labor rules and decisions from DOL, the National Labor Relations Board and the Equal Employment Opportunity Commission.

On workplace safety matters, the Occupational Safety and Health Administration’s efforts to make major changes in recordkeeping and reporting for business have been opposed by a range of industry groups, including NASF. Among these have been OSHA’s final electronic reporting rule to put injury and illness records of employers on the internet, and the agency’s pending final rule that would allow OSHA to cite employers for alleged injury and illness recordkeeping violations up to five years old, an extension much longer than the current limit of six months.

It’s only January, and a profound shift is underway in Washington. The regulatory agenda will be in a center spotlight this year, along with further action on tax reform, trade, immigration, health care and infrastructure. NASF has been closely engaged at the agencies and will continue to monitor and inform decisions that impact the industry as the year unfolds.  Look for new updates on specific issues in play in the coming weeks and months. In the meantime, we look forward to having you join us for the NASF Washington Forum in the nation’s capital on Apr. 25-27, 2017. For more information, go to www.nasf.org.


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OSHA Fines for Workplace Violations to Increase in 2016

The budget deal passed by Congress and signed into law by the President on November 2 contained provisions to raise spending caps and the debt limit as well as delay major budget battles until after the presidential election.  NASF members should know that the package also contained an essentially unnoticed provision that allows OSHA to increase fines starting August 1, 2016 for workplace safety violations.

OSHA Process for Increased Fines

The provision, which caught both business and labor by surprise, outlines a process that permits the agency to increase penalties for the first time in 25 years. First, the White House Office of Management and Budget (OMB) must issue guidance to implement the new law’s provision by January 31, 2016.

Second, OSHA will be allowed to increase fines to “catch up” with inflation since 1990 by issuing by next July 1, 2016, an “interim final rule,” which is typically a rulemaking process that does not require an agency to invite public comment before a final decision is made. The rule would become effective by August 1.

Third, starting in 2017, OSHA will be allowed to increase fines to keep up with inflation. The bill, importantly, does allow OSHA to select a lower fine increase if it chooses and the White House agrees. Whether this will occur, of course, remains to be seen.

The new law doesn’t say anything about the 28 states that run their own safety and health programs, and it’s early enough in the process that OSHA has not begun developing any guidance for the states. However, it’s anticipated that the new federal fine structure will be required by states so they will be at least as stringent in their own programs.

Fine Amounts Could Jump by 80 Percent

If OSHA implements the maximum increase allowed, which is the inflation rate from 1990 to 2015 as measured by the Consumer Price Index, then the penalty for violations would jump by over 80 percent. What that would mean is that fines for serious violations could increase from $7,000 to about $12,000.

The highest penalty amount – for repeat and willful violations – could increase from $70,000 to about $125,000. In the bigger picture, if this maximum increase were applied to OSHA fines for all US violations in fiscal year 2014, then this past year’s total OSHA nationwide penalties of $143.6 million would have increased to $261.4 million instead.

It’s useful to point out that OSHA is not required by the new provision to raise its penalties to the maximum, however, and the agency may use its discretion on amounts for individual citations.

Labor & Industry Views

While OSHA has been reviewing the changes, prominent labor advocates note that the agency’s new penalty adjustment authority means progress, although simply linking penalty increases to inflation won’t raise fines nearly as high as earlier legislative attempts by congressional Democrats to dramatically boost penalties for worker fatalities. They point out that the average 2014 employer fine for a worker fatality was $7,000, which was ultimately reduced on average to $5,050 upon settlement.

Some industry leaders have noted that that increased fines will undoubtedly have a serious impact on business, particularly smaller operations, and will plan to oppose OSHA efforts next year. Other workplace safety legal experts argue that boosting fines for OSHA still keeps them extremely low compared to other agencies, like EPA, which imposes such maximum penalties of $270,000 for violating the Clean Air Act and $1 million for tampering with a public water system.

Some business advocates – including NASF Washington Forum speaker Baruch Fellner of Gibson Dunn’s Washington, DC office – also argue that increasing fines on a per citation basis may be beneficial, as OSHA inspectors may be relieved from having to combine a number of “nitpicky citations” in order to reach higher penalties for employers.


NASF will be closely monitoring OSHA’s activity moving into next year and will keep members abreast of rulemaking and related developments. At this point, it’s likely that getting even a Republican-controlled Congress to block or reverse OSHA’s action next fall will be challenging, as Congress approved the language with this month’s approval of the budget bill. Stay tuned for future NASF updates.

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OSHA Workplace Exposure Limits Deemed “Not Safe Enough”: More Enforcement on the Way

Nearly 30 years ago, OSHA attempted a comprehensive overhaul of its chemical workplace exposure rules, but this effort was halted by several legal challenges.  Since that time, OSHA has only adopted a handful of new chemical workplace exposure standards.

In late Fall 2013 the OSHA Administrator, Dr. David Michaels, publicly announced that “[o]ur workplace exposure limits are dangerously out-of-date . . . and do not adequately protect workers.”  In addition, OSHA has posted on its website an annotated table of exposure limits that include recommendations from third-party organizations that are much lower than the legal limits for many chemicals.

Worker safety advocates have argued that OSHA should use these recommendations and the general-duty standard to protect workers at exposure levels below the legal limits.  The general-duty standard can be used by OSHA in an enforcement action if a given hazard is well known and an employer fails to protect workers from the hazard.

In a recent enforcement action, OSHA cited a Wisconsin company pursuant to the general-duty standard for allowing exposures in excess of a recommended limit, even though the exposures were below the legal permissible exposure limit (PEL).  Specifically, the company exceeded a recommended NIOSH exposure limit of 50 ppm for styrene with workplaces exposures of 65 ppm.  Even though the OSHA PEL for styrene is 100 ppm, OSHA relied on the general-duty standard and concluded that the company should have known that workplace exposures to styrene above 50 ppm posed hazards to workers.  The company is in the processing of challenging OSHA’s citations in this case.

NASF and other industry groups are concerned that OSHA is trying to enforce more stringent workplace exposure standards without formally and legally revising the applicable PEL through a rulemaking process.  Under this approach, companies that meet applicable PELs may be liable for potential violations of OSHA rules if a lower standard is recommended by a third-party, even though OSHA has not officially recognized and adopted that standard.

NASF will continue to monitor this enforcement action and OSHA’s future use of the general-duty standard to enforce third-party workplace exposure standards.  If you have any questions or would like additional information regarding this issue, please contact Jeff Hannapel at jhannapel@thepolicygroup.com.

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OSHA’s GHS HazCom Rule: Training Deadline is December 1, 2013

NASF members should be ready to comply with new training and other requirements under OSHA’s implementation of the Globally Harmonized System (GHS).  Did you know the deadline for the first round of regulations is  December 1, 2013?

The GHS is an approach for standardizing and harmonizing the classification and labeling of chemicals.  OSHA is now implementing the framework through its revised Hazard Communication Standard (HCS), first published in the Federal Register on March 26, 2012.  The new rule aims for a more logical approach to classifying chemicals and communicating hazards on labels and safety data sheets.  Companies that regularly handle, store, and use hazardous chemicals must periodically update safety data sheets and labels for chemicals covered under the hazard communication standard.  Employees must be trained as well.

What GHS Means to You

The new rules contain a new set of terminology for communicating potential chemical hazards in the workplace.  Companies handling chemicals will need to replace old Material Safety Data Sheets (MSDSs) with new Safety Data Sheets (SDSs) and update labels to meet GHS requirements, including new pictograms.  In addition, businesses will need to train employees to read the new SDSs and labels.

What are the Regulatory Deadlines?

By December 1, 2013, businesses must train employees regarding hazards of chemicals or categories of chemicals and the new label elements and SDS format.

By June 1, 2015, all labels and SDSs must be updated by chemical manufacturers, distributors or importers.  Distributors have an additional six months to distribute containers with manufacturers’ labels.

By June 1, 2106, employers must update Hazard Communication program and signs to comply with the new GHS requirements.

More Information from NASF and OSHA

NASF is preparing more information to assist companies with compliance.  In the meantime, background and guidance on complying with the GHS and the hazard communication standard is available on the OSHA website at www.osha.gov/dsg/hazcom/index.html.

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Is Your Facility Ready? Preparing for a New Type of OSHA Inspection

OSHA recently issued a letter of interpretation that allows union representatives and other non-employee third parties to accompany OSHA inspectors on walk-around inspections of non-union workplaces. The applicable OSHA regulations provide that workers may designate an employee of the facility to participate in the walk-around inspection, unless there is good cause shown that a third party is “reasonably necessary” to conduct a thorough and effective physical inspection.

OSHA has broadly interpreted this language such that a third-party representative is “reasonably necessary” when they will make a positive contribution to a thorough and effective inspection.

The NASF has joined the Coalition of Workplace Safety (CWS) in opposing OSHA’s interpretation. On June 12, 2013 the 56 organizations in the CWS sent a letter to Dr. David Michaels, Assistant Secretary of OSHA, stating the rationale of why this interpretation is inconsistent with OSHA’s statutory and regulatory requirements and represents bad public policy.

Practical Steps Employers Can Take

In issuing this new interpretation, OSHA has raised more questions than it has answered. As these issues are being addressed, there are several practical steps that employers can consider when a third party arrives with an OSHA inspector for a walk-around inspection at the workplace. The practical steps are presented merely as general guidance, employers should consult with their legal counsel for the specific application to each individual situation.

  1. First, ask for the credentials for every person that is with the OSHA inspector to determine each individual’s affiliation.
  2. Second, you may consent to the OSHA officials accessing the facility for a walk-around inspection, but deny access to third parties that are not government officials or contractors.
  3. If the OSHA inspector has a warrant for the inspection, check to see if the warrant covers the third parties present. If not, then you may deny access to the third parties.
  4. If the warrant does include third parties, you may want to consider challenging the warrant’s application to those third parties before a magistrate before allowing access to third parties.
  5. If you allow third parties access for the walk-around inspections, you may want to limit the third parties’ participation as summarized below.
    • Limit the third parties’ access to only the walk-around inspection – no participation in pre- and post-inspection conferences and no interviews with employees
    • Require third parties to sign Confidentiality Agreements and a Waiver of Liability (consistent with what applies to OSHA officials)
    • Require third parties to wear appropriate personal protective equipment (PPE) during the walk-around inspection
    • Require third parties to undergo applicable safety training prior to walk-around inspection
    • Do not allow third parties to take photographs or videos or take samples during the walk-around inspection

Emerging Outlook

Because OSHA’s new interpretation appears to open novel legal issues, it is not clear how OSHA will choose to implement this new approach. The NASF will continue to work as part of the CWS to oppose the inappropriate application of this new interpretation. In the meantime, employers can take reasonable and appropriate measures to minimize unnecessary and intrusive walk-around inspections pursuant to OSHA’s letter of interpretation.

If you have any questions or would like more information regarding OSHA’s letter of interpretation on inspections, please contact Jeff Hannapel with NASF at jhannapel@thepolicygroup.com.

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A New OSHA Interpretation: Union Representatives Can Accompany OSHA Inspector at a Non-Union Worksite

OSHA is startling employers with a new “Interpretation Letter” that departs from 40 years of practice and expands the rights of non-employees and union representatives during the walkaround portion of an OSHA inspection at non-union workplaces.

In a recently released letter, which NASF members discussed at the Washington Forum in April with U.S. Chamber of Commerce Labor Policy Director Marc Freedman, OSHA responded to a United Steelworker safety representative who asked:

“whether workers at a workplace without a collective bargaining agreement may authorize a person who is affiliated with a union or a community organization to act as their representative under the Occupational Safety and Health Act (OSH Act). This would include “representing the employee(s) as a personal representative” and “accompanying the employee on an OSHA inspection” in a non-unionized workplace.”

OSHA answered, in part:

“The OSH Act authorizes participation in the walkaround portion of an OSHA inspection by “a representative authorized by [the employer’s] employees.”…. Therefore, a person affiliated with a union without a collective bargaining agreement or with a community representative can act on behalf of employees as a walkaround representative so long as the individual has been authorized by the employees to serve as their representative. This right, however, is qualified by the Secretary’s regulations, which allow OSHA compliance officers (CSHOs) to exercise discretion over who participates in workplace inspections.”

The new letter disavowed and withdrew a 2003 Interpretation Letter suggesting that the OSHA law imposed more restrictions on non-employee involvement in inspections than OSHA’s new interpretation.

Many employers are just beginning to hear about the new interpretation and are concerned about the implications of the letter. But legal and safety experts are stating the obvious – that outside organizations or unions will be allowed to hijack the workplace safety process for reasons wholly unrelated to protecting workers.

NASF members who would like a copy of the complete OSHA Interpretation Letter, please email Christian Richter at The Policy Group at crichter@thepolicygroup.com.

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