OSHA’s Severe Violator Enforcement Program Is Worse Than Ever Before

August 15, 2023
By: Adam R. Young, Mark A. Lies II and Daniel R Birnbaum

Many employers are unaware of an Occupational Safety and Health Organization (OSHA) enforcement program known as - the Severe Violator Enforcement Program (SVEP). Those who are unaware of SVEP should become aware of it quickly, as it is essentially a blacklist that can have a significant, negative impact on one’s business.

For the first time in over a decade, OSHA has updated its compliance directive related to SVEP. With this update, it’s important employers know how they can be added and removed from the program, how to navigate through the program if one finds themselves in it and what these changes mean for OSHA enforcement policies.

Why Is OSHA’s SVEP Problematic for Employers?

As part of SVEP, federal OSHA maintains a nationwide list of severe violator employers. This list, updated quarterly, is easily accessible on OSHA’s national website and visible to the following:

• Potential and existing clients
• Competitors
• Labor organizations
• Workers’ compensation attorneys
• Public interest groups
• Personal injury attorneys

Given OSHA’s limited resources for enforcing its regulations, SVEP seeks to concentrate OSHA and the Department of Labor’s legal resources against employers on the SVEP list, on a nationwide basis (including federal OSHA and OSHA State Plan states).

An employer’s inclusion in SVEP immediately creates a host of labor, operational, legal and publicity issues. In many cases, the employer is unaware that it is even on the publicly available SVEP list until it receives inquiries from third parties, including the media. Additionally, employers on the list may be subject to negative publicity, lose out on work from potential clients, be subject to aggressive negative campaigns by both competitors or labor organizations, and could potentially be targeted by aggressive personal injury attorneys.

It is clear that OSHA cannot simply open an enforcement inspection against an employer unless it has some basis to indicate that the employer may not be compliant with OSHA and is creating a hazard to employee safety and health. Thus, OSHA must have probable cause for the specific inspection, including a neutral basis to choose that employer. OSHA takes the position that SVEP creates such probable cause and a neutral basis to allow it to do “referral” inspections that otherwise would be impermissible at many work sites around the country. While OSHA referral inspections are supposed to be limited to “related workplaces” with “similar hazards,” these terms are undefined and nebulous. OSHA broadly interprets these terms to justify inspections on an employer’s other work sites that have “substantially similar” hazards. In such instances, OSHA could potentially issue Willful or Repeat citations with penalties up to $145,027 per violation. Moreover, under OSHA’s procedures, after an inspection results in an employer’s designation on the SVEP list, OSHA could do a follow-up inspection at the cited work site or a similar work site at any workplace around the country.

Criteria for Inclusion (and Removal) From OSHA’s SVEP

When OSHA issues a citation, an employer’s inclusion in SVEP is programmatic and based on the alleged violation, assigned gravity of the violation and classification of the citation. OSHA does not do any independent qualitative analysis and will add an employer to the list based on the following types of citations:

• A fatality/catastrophe inspection where OSHA finds:
  • At least one Willful or Repeat violation; or
  • A Failure-to-Abate notice based on a serious violation directly related either to
    • an employee death; or
    • an incident causing three or more employee hospitalizations.
• In cases where OSHA’s citation is not based on a fatality, an employer will be placed in SVEP where they have at least two Willful or Repeat violations, or Failure-to-Abate notices (or any combination of these violations/notices), based on the presence of high gravity serious violations of low or moderate gravity do not qualify.
  • Employers cited for Willful-Egregious citations (e.g., violation-by-violation penalties) also will be included in SVEP.

OSHA identifies a SVEP case and refers the employer into the program at the time the citations are issued, meaning when the violations are alleged. An OSHA citation is merely an allegation that an employer can contest/appeal. The contest/appeal of OSHA citations does not stay the inclusion in SVEP or remove the employer for the duration of the appeal. The inability of an employer to prevent being included on the SVEP list and avoid the significant liabilities discussed in this article is one of the factors that poses a significant threat to the employer’s reputation and economic viability. OSHA is well aware of the dire consequences of being placed on the SVEP list since, at the time of its initial creation, the agency touted it as a regulatory tool specifically intended to shame employers into compliance.

OSHA includes employers in SVEP for a minimum of three years, beginning on the date OSHA receives abatement certification of the alleged violation (not the date of the accident or date that citations are issued). OSHA can choose to remove employers from the program, generally after three years, when they have paid the penalties, abated all hazards, received no serious citations related to the same hazard and have received at least one follow-up or referral SVEP inspection.

Recent Changes in Enforcement

On Sept. 15, 2022, OSHA updated its enforcement procedures related to SVEP for the first time since 2010. OSHA has expanded its reach under SVEP by no longer requiring exposure to specific high-emphasis hazards or hazards related to process safety management when considering non-fatality cases for inclusion in SVEP.

Additionally, SVEP removal eligibility has been expanded to begin three years after the date an employer completes abatement, as opposed to the three years from the final order date of a citation. OSHA has also updated SVEP enforcement by adding a minimum two-year duration in SVEP that includes specified criteria for removal based on a safety and health management system.

In order to reach an informal resolution of the citations that lead to the employer’s inclusion in SVEP, OSHA typically demands a draconian list of “enhancements” in order to agree to a settlement. Many of the enhancements involve substantial monetary investments by employers in engaging outside consultants, conducting audits, changes to work practices and periodic reporting of these actions, which frequently go well beyond the compliance requirements in the regulations themselves. In many cases, these enhancements can run into thousands of dollars of additional expenditures.

Another critical impact on employers who are included in SVEP is the negative impact on employer’s rights under workers’ compensation laws. The inclusion in the program could impact the employer’s ability to rely upon the limitations of liability under state workers’ compensation laws and result in employees being able to avoid workers’ compensation limitations and bring civil personal injury claims or seek enhanced workers’ compensation benefits as a result of the nature of the OSHA violations.

Recommend Practices for Employers

Because of the many technicalities involved in inclusion and removal from SVEP, it is critical that employers engage legal counsel who are very familiar with OSHA practice. For example, where inclusion in SVEP is based on new citations under contest, the fastest way to get the employer out of SVEP is to settle the citation for a lesser classification or, for fatality citations, a citation unrelated to the fatality. While reducing a Willful violation to a Repeat classification would not remove the company from SVEP, reducing a Willful to a Serious classification would remove an employer from the program. Also, as removal from the program is now based on abatement completion, it benefits an employer to abate as quickly as possible rather than waiting for the citation to become a final order. Employers must closely evaluate their defenses to any Willful, Repeat or high-gravity citations, and work with outside legal counsel to settle in a manner that will ensure that the employer is removed from SVEP.

Conclusion

It is apparent that SVEP is a lurking liability issue for employers, particularly in those industries that are classified as high-hazard industries. In order to avoid SVEP liability, an employer should 1) conduct a comprehensive hazard assessment at its work site to identify all hazards, 2) develop compliance safety programs that address each such hazard, 3) conduct meaningful training of employees in such safety programs, 4) enforce compliance by employees with safety programs through the use of discipline, and 5) document all efforts taken to address items 1 through 4. If an employer takes these steps, it is very unlikely that an they will be targeted for inclusion in SVEP. If you have any questions regarding this program or any other OSHA issues, please do not hesitate to contact the authors.