Who’s the Boss in a Multi-Employer Workplace?Aug 12, 2022
As multi-employer workplaces grow in number, size, and complexity, the safety and other regulatory responsibilities of the primary (or “host”) contractor and multiple subcontractors can sometimes get fuzzy. Under state and federal statutes and regulations, which company constitutes an employee’s “employer”?
A recent decision by the Occupational Safety and Health (OSHA) Review Commission brought renewed attention to the agency’s Multi-Employer Citation Policy, the unfortunate “cite everybody” behavior of some OSHA field personnel, and why it’s essential for host employers (general contractors) to push back when “reasonable care” can be established.
Multi-employer worksites are everywhere
The multi-employer worksite is most common in the construction industry, where, on large projects, hundreds of contractors and subcontractors could be working at the same job site. However, the “subcontracting” business model that creates a multi-employer workplace is growing in other occupational sectors. According to the American Staffing Association, subcontractors and contract workers are involved in virtually all occupations in all business sectors:
- 36% industrial, construction, manufacturing
- 24% office, clerical, administrative
- 21% professional, managerial
- 11% engineering, information technology, scientific
- 8% healthcare
For years — essentially since OSHA published the policy in 1999 — the agency has advanced an aggressive citation strategy at multi-employer work sites. The approach empowers the agency to cite everybody —the general contractor, subcontractors, and consultants — for a single safety or health violation.
OSHA’s approach — its enforcement position — when inspecting a multi-employer worksite is described as a two-step process. The first step is determining each employer’s role at the job site or workplace.
- The creating employer created or caused the hazardous condition that violated an OSHA standard.
- The exposing employer is the entity whose employees are exposed to the hazard.
- The correcting employer is the entity responsible for correcting the hazardous condition.
- The controlling employer is the entity with supervisory authority over the worksite, including the power to correct hazards. In general industry, the host employer is usually the controlling employer. In construction, it is typically the general contractor. Controlling employers have a more significant compliance burden than the others. A general contractor, for example, is expected to take “reasonable care” to identify and prevent hazards — OSHA violations — throughout a job site.
Once roles are established, step two is the investigation to see if all entities have met their safety obligations. How many entities should be cited? OSHA has developed a reputation for taking a strict liability position whenever an accident occurs, and any employer with a possible role in oversight or safety is cited.
Exercising “reasonable care”
The Occupational Safety & Health Review Commission recently reversed the decision of Administrative Law Judge John Gatto — Secretary of Labor v. Summit Contracting Group, OSHRC Docket No. 18-1451 (May 10, 2022) — and vacated the $11,640 citation.
Summit Contracting Group, the general contractor on a large construction site, had been cited after three subcontractor employees were observed working without appropriate fall protection.
In challenging the citation, Summit demonstrated that they conducted daily walkthroughs of the worksite and hired safety consultants to do monthly inspections. Summit also showed that their subcontractor had their own safety consultants, fall protection plan and training program, and conducted their own inspections. According to the Review Commission, it wasn’t unreasonable for Summit to rely on the safety program implemented by their subcontractor.
In reversing the decision, the Review Commission indicated that “the Secretary has not established that Summit failed to exercise the reasonable care required of a controlling employer in a secondary safety role and, therefore, has not met his burden of proving knowledge.”
The Summit decision was consistent with a similar case a few years ago — Secretary of Labor vs. Suncor Energy, U.S.A.— where the judgment was reversed upon review. In that decision, the Review Commission said Suncor’s “reasonable care” efforts were “more than commensurate with the size, complexity, and short time frame associated with this project.”
What’s it all mean?
The good news is that controlling (host) employers have further support to argue a lack of “knowledge” when they lack actual knowledge and demonstrate “reasonable care.” Upon review, Summit’s safety program was deemed more than adequate. These decisions also indicate that controlling employers aren’t subject to the same “duty of care” as an exposing employer and can reasonably rely on a contractor if that contractor can demonstrate a history of implementing adequate safety policies and practices.
If you have questions about your OSHA or tort liabilities at a multi-employer worksite — or if OSHA opens an inspection at your multi-employer worksite — don’t hesitate to contact Orr & Reno for assistance.
About the Author: James Laboe