7 Secrets that Cost Your Client a Bundle on their Workers' Comp

Getting LOTO wrong could cost



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Getting LOTO wrong is costly

Here’s how to get it right

Many companies believe they are in compliance with OSHA’s Lockout/Tagout (LOTO) standard; yet, it is one of the most difficult to comply with and is the number five violation in general industry and construction. To give you an idea of the standard’s complexity, a compliance directive to explain the enforcement policy and inspection procedures for compliance officers is 136 pages long, whereas the standard is only a few pages.

An increased focus on violations of Lockout/Tagout (1910.147) and Machine Guarding (1910.212, .213, .217, and .219) began in 2006 with the Amputations National Emphasis Program (NEP). This became even more pronounced when OSHA changed the requirements for reporting work-related fatalities and severe injuries in 2015. Employers must report any in-patient hospitalization, amputation or loss of an eye within 24 hours of learning of the incident.

When an amputation is reported, it’s almost certain that an inspection will take place. In 2017, more than 10% (3,596) of all OSHA inspections were under the Amputations NEP, 75% of which were in manufacturing, and 1,247 were triggered by employer reports.

What’s important to note is that this resulted in 7,850 citations, including 302 willful and repeat violations, which carry maximum fines of $126,749. The proposed total cost of the citations is over $55 million. In addition to the potential for costly fines is the even more ominous possibility of being placed in OSHA’s Severe Violators Enforcement Program (SVEP).

One of the criteria OSHA uses to place an employer in the SVEP is 2+ Willful, Repeat, or Failure to Abate violations related to high emphasis hazards. There are only nine high emphasis hazards and amputations is one of them. According to a Conn, Maciel Carey PLLC webinar, 68% of the SVEP cases fall under this qualifying criterion.

When OSHA puts an employer in the SVEP, it issues a press release before employers can

contest the citation(s). This can have a negative impact on recruiting employees, obtaining bids and permits, and be devastating to a company’s reputation. Moreover, there are mandatory follow-up inspections, inspections at related facilities, and corporate-wide abatements. It’s not a place employers want to be  – once designated as a severe violator, there is no clear-cut method for getting out of the program. And it’s not only employers that are affected. Small employers make up the majority, with about 75% having 100 or fewer employees and roughly 55% having 25 or fewer employees.

Lastly, LOTO is among the most frequent OSH Act criminal violations.

What employers get wrong

When OSHA conducts an inspection, it’s relatively easy to spot LOTO violations. In 2017, the most frequent standard section cited was related to machine-specific procedures: 1910.147(c)(4)(i) – procedures shall be developed, documented, and utilized for the control of potentially hazardous energy. Employers that are cited often misunderstand the scope of activities covered by LOTO. They often focus exclusively on electrical hazards, but the standard covers a broad range of energy sources, such as mechanical, hydraulic, pneumatic, chemical, thermal, or other types of energy.

The program must include written equipment-specific LOTO procedures for all equipment, including vehicles such as forklifts and trucks, with hazardous energy sources and must include all energy sources. While it is possible to group equipment and machinery that have the same hazardous energy sources and the same or similar methods of controlling the energy, some employers do not understand the criteria for grouping that is set forth in section IX of OSHA’s compliance directive  or may neglect to list all covered machinery in the scope of the energy control procedure.

In some cases, employers neglect to document key elements of the procedure. There are also specific rules that apply when a contractor services the machinery and noncompliance leads to citations.

Employers and employees may mistakenly believe a procedure falls under the minor servicing exception. The standard contains specific criteria that must be met for the minor servicing exception to apply and all elements must be satisfied for an exception. Other common mistakes include not updating the procedures when changes occur, applying the construction rather than general industry standard, and overlooking facility support and operational equipment, such as HVAC machinery, boilers, and compressors.

The second most frequently cited standard is 1910.147(c)(6)(i) – the employer shall conduct a periodic inspection of the energy control procedure at least annually to ensure that the procedure and the requirements of this standard are being followed. In this case, annual means every twelve months. Some companies have the wrong person conducting the inspection. It must be an “authorized employee” other than the workers utilizing the lockout/tagout procedure being inspected.

If machines are grouped together the inspection must be of a representative number of employees implementing the procedure. “Representative” is subject to interpretation, so it’s important to have a rationale for the number chosen (complexity, older procedure, etc.). Moreover, the outcome of the inspection must be reviewed with all authorized employees as part of the periodic inspection. Employers also must “certify” that the inspections include the machine or equipment on which the energy control procedure was being utilized, the date of the inspection, the employees included in the inspection, and the person performing the inspection. And inspections must take place for each one of the LOTO procedures.

The third most cited standard is 1910.147(c)(1) – The employer shall establish a program consisting of energy control procedures, employee training and periodic inspections to ensure that before any employee performs any servicing or maintenance on a machine or equipment where the unexpected energizing, startup, or release of stored energy could occur and cause injury, the machine or equipment shall be isolated from the energy source and rendered inoperative.

A written lockout procedure is not required when a machine only has one energy supply that’s easy to identify and lock out. The machine can’t have any potential for stored energy and locking that one energy isolating device completely de-energizes the machine. Even if an employer uses an outside contractor for servicing and does no in-house servicing, a LOTO program is required because there are affected employees.

Fourth is related to training.  1910.147(c)(7)(i)-The employer shall provide training to ensure that the purpose and function of the energy control program are understood by the employees and that the knowledge and skills required for the safe application, usage, and removal of the energy controls are acquired by the employees.

Employers do a good job of training authorized employees, but sometimes overlook affected employees (who operate equipment being serviced) and all other employees who may be present in areas where LOTO is utilized, including management. Also, temporary employees often are forgotten. Another common problem is failure to develop “Group Lockout” procedures when more than two employees service a machine or to require use of a Group Lockout device.

Other common citations include wrong use of locks, wrong use of tags, and working under someone else’s lock.

Complying with OSHA’s Control of Hazardous Energy policy is difficult and the consequences for violating the regulation can be severe. Proposed changes in the regulation (see next article) may lead to more citations. An effective program will reduce the potential for employee injury as well as regulatory liability.