Many VPP companies have been using some type of incentive or recognition program to reward employees when certain safety goals or milestones are achieved for many years. Now, OSHA suddenly seems to have a problem with this practice. But is there really a problem with the approach of engaging employees in safety and health by offering incentives, especially in VPP sites?

In 2009, the General Accounting Office (GAO) prepared a report on injury and illness recordkeeping that revealed employers were not accurately reporting and recording injuries/illnesses. However, the report did not directly address the effect of incentive programs and their possible relationship in the underreporting of injuries and illnesses.

OSHA’s response to the GAO report was to implement a National Emphasis Program (NEP) on recordkeeping. The NEP did not target incentive programs, but OSHA reviewed them as part of the inspection. The results were not surprising: One-third of the sites inspected had an incentive program tied to injury/illness performance.

OSHA’s Position on Incentives, VPP

OSHA VPP teams have been evaluating incentive programs for many years. The VPP Policies and Procedures Manual provide guidance to the on site evaluation teams:

“The review of incentive programs must focus on ensuring that any incentive programs in operation are not based solely on providing awards to employees for the reduction or absence of safety or health incidents. Instead, these programs should be innovative, positive, and promote safety awareness and employee participation in safety-related activities. The onsite evaluation will focus on the incentive program’s potential impact on the accuracy of reporting, injury and illnesses data.”

Dr. David Michaels, assistant secretary of labor for OSHA, expressed OSHA’s current stand on incentive programs at the VPPPA National Conference in Orlando, Fla., on August 23, 2010: “We disapprove of programs where managers receive large bonuses for driving down their DART rate. We have found that incentive programs based primarily on injury and illness numbers often have the effect of discouraging workers from reporting an injury or illness. We cannot tolerate programs that provide this kind of negative reinforcement.”

Subsequently, on June 29, 2011, OSHA issued revised VPP Policy Memorandum #5, which addressed how VPP applicants or approved site’s incentive programs would be evaluated. Programs that promote injury and illness reporting and employee involvement are encouraged and acceptable. Incentive programs that focus on injury/illness numbers are discouraged. The policy further states that existing VPP sites will not be reapproved if they have a numbers-driven incentive program; VPP applications will not be accepted if they have a numbers-driven incentive program. In either case, an incentive program can be changed to meet OSHA’s guidelines and allow a site to proceed through the application or re-approval process.