RISK INSIGHT: OSHA Reverses Position on Workplace Safety Incentive & Drug Testing Guidelines

Property & Casualty, Risk

On October 11, 2018, the federal Occupational Safety and Health Administration (OSHA) issued a new letter of interpretation regarding safety incentive programs and post-accident drug testing under its Improved Tracking of Workplace Injuries and Illnesses (“Electronic Recordkeeping”) Rule (29 C.F.R. § 1904.35(b)(1)(iv)).

With this notice, OSHA has reversed its position completely on both issues by clarifying that the Department does not interpret the rule to prohibit workplace safety incentive programs or post-incident drug testing and confirms that employers who implement such programs do so to promote safety and health in the work environment.  The memorandum supersedes all previous guidance to the contrary.

Included in the memorandum are notable items regarding Safety Incentive Programs and Post-Incident Drug Programs:


The following are highlights regarding employer-based safety incentive programs:

  • Near-misses/hazards:  OSHA will allow employers to incentive reporting of near-misses.  They state:  “One type of incentive program rewards workers for reporting near-misses or hazards, and encourages involvement in a safety and health management system. Positive action taken under this type of program is always permissible under § 1904.35(b)(1)(iv).”
  • Rate-based incentive programs:  Rate-based incentive programs will be allowed as long as they do not discourage safety reporting.  The memo states:“Another type of incentive program is rate-based and focuses on reducing the number of reported injuries and illnesses. This type of program typically rewards employees with a prize or bonus at the end of an injury-free month or evaluates managers based on their work unit’s lack of injuries.  Rate-based incentive programs are also permissible under § 1904.35(b)(1)(iv) as long as they are not implemented in a manner that discourages reporting.  Thus, if an employer takes a negative action against an employee under a rate-based incentive program, such as withholding a prize or bonus because of a reported injury, OSHA would not cite the employer under § 1904.35(b)(1)(iv) as long as the employer has implemented adequate precautions to ensure that employees feel free to report an injury or illness.”
  • Workplace culture:  Employers are encouraged to promote a workplace safety culture. They state: “An employer could avoid any inadvertent deterrent effects of a rate-based incentive program by taking positive steps to create a workplace culture that emphasizes safety, not just rates. For example, any inadvertent deterrent effect of a rate-based incentive program on employee reporting would likely be counterbalanced if the employer also implements elements such as:
    • an incentive program that rewards employees for identifying unsafe conditions in the workplace;
    • a training program for all employees to reinforce reporting rights and responsibilities and emphasizes the employer’s non-retaliation policy; or
    • a mechanism for accurately evaluating employees’ willingness to report injuries and illnesses


OSHA offered the following items for workplace drug testing:

  • Workplace drug testing:  OSHA clearly stated that “most instances of workplace drug testing are permissible under § 1904.35(b)(1)(iv).”
  • Examples of permissible drug testing:  The memorandum cited examples of permissible drug testing, which included:
    • Random drug testing
    • Drug testing unrelated to the reporting of a work-related injury or illness
    • Drug testing under a state workers’ compensation law
    • Drug testing under other federal law, such as a U.S. Department of Transportation rule
    • Drug testing to evaluate the root cause of a workplace incident that harmed or could have harmed employees
    • If the employer chooses to use drug testing to investigate the incident, the employer should test all employees whose conduct could have contributed to the incident, not just employees who reported injuries


The new interpretation of the Workplace Safety Incentives and Post-Incident Drug Testing provisions under the Improved Tracking Rule indicates a more favorable position to employers and provides helpful examples of lawful programs. Due to this being an interpretation of existing rules, employers should immediately note these changes.

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