Feds Accuse Arizona Commission of Wrongful Cuts to Workplace Safety Fines

An investigation by federal OSHA officials has determined that the Industrial Commission of Arizona is undermining the power of safety penalties through arbitrary reductions. These practices are not permitted under existing policies.

The investigation also found that the governor-appointed commission has been operating illegally by reclassifying the severity levels of safety violations recommended by Arizona Division of Occupational Safety and Health (ADOSH) inspectors.

“The big question is what the implication of this will be, in terms of the follow-up the state does to address these concerns,” said Peter Dooley, a Tucson-based workplace safety consultant.

The investigation was instigated by multiple public complaints, including one filed by Dooley last December.

Last year, an investigation by the Star revealed that the Industrial Commission routinely reduces penalties and reclassifies violations without clear justification. These actions often follow requests from employers during public meetings.

Scrutiny from the Star over six months in 2016, culminating in a December article, helped drive OSHA’s investigation, according to Dooley. “That certainly brought attention to the issue,” he said.

Industrial Commission chairman Dale Schultz defended the practices in a letter to federal OSHA officials, criticizing the agency’s “adversarial approach.”

“Federal OSHA’s actions in pursuing this complaint serve only to discourage state innovation,” Schultz wrote, arguing against the imposition of federal standards on state operations.

The Star’s 2016 analysis showed that the commission had reduced penalties by over $186,000 in 139 cases reviewed that year. More than half of the penalty recommendations from ADOSH were reduced by the commission.

Schultz emphasized that the commissioners aim to improve workplace safety through collaboration, not necessarily by issuing the highest penalties.

Arizona is one of 26 states with a state-level occupational safety and health program, which must be as effective as the federal OSHA program.

The commission’s practice of reducing penalties before they are officially issued is unique among OSHA programs, experts noted.

Under an agreement with federal OSHA, the Industrial Commission can review and adjust penalties based on pre-defined criteria such as employer size and safety history.

This agreement was not followed accurately, with additional reductions being made seemingly arbitrarily, according to OSHA’s findings. The practice diminishes the deterrent effect of higher penalties and fails to ensure equal treatment of employers.

Industrial Commission spokesperson Bob Charles stated that the commission is reviewing OSHA’s findings and asserted that declining workplace injury rates indicate the strategy’s effectiveness.

In December, OSHA sent a formal Complaint Against State Program Administration to Industrial Commission Director James Ashley. The complaint cited 10 cases where penalties were reduced or violations reclassified.

In one case, serious violations by a roofing company were downgraded to “non-serious,” and penalties were slashed from $18,500 to $4,750 after discussions with the employer.

OSHA requested an explanation for the criteria used in these reductions. In response, Schultz defended the commission’s philosophy and cited broad authority under Arizona statute.

The Industrial Commission has 30 days from the issuance of OSHA’s May 4 letter to respond. Federal OSHA has recommended the state propose changes to its OSHA plan, detailing the role and criteria for the Industrial Commission’s penalty adjustments, which would need federal approval.

Workplace safety advocates argue that high penalties are crucial deterrents for employers cutting corners on safety. Heavy penalties emphasize the importance of compliance, especially given ADOSH’s limited inspection resources.

Dooley highlighted that it would take ADOSH field workers 122 years to inspect each workplace in Arizona once. Hence, hefty fines for violations are essential to ensuring worker safety.