Due Diligence in Workplace Safety

Due diligence is often viewed with the same enthusiasm afforded to cleaning out your pantry. Which is to say, not much.

But these days, due diligence isn't just a PR checkbox. Businesses may well be in legal trouble if they neglect human rights vis-a-vis due diligence.

That said, many safety workers may not understand due diligence. They think of it as a legal checklist reserved for mergers. Here's why due diligence in workplace safety is just as important as due diligence in the boardroom.

What Is Due Diligence?

First, you have to understand what due diligence is.

Typically, due diligence is an investigation of a potential investment to confirm that all the facts line up. This is why it's usually performed before entering into a financial agreement with another company.

In safety, due diligence refers to the level of care, judgment, prudence, and activity that a person might reasonably be expected to perform. In other words, under due diligence, employers are expected to take all reasonable precautions to prevent workplace accidents and injuries.

To exercise due diligence, an employer must create and implement a hazard recognition plan and steps for corrective action if a problem is identified.

Why You Need It

With that in mind, let's talk about why you need due diligence as part of your safety program.

Every Reasonable Precaution

First and foremost, you need due diligence because it's the single best way to fulfill your legal safety obligation.

Under the guidelines of the Occupational Safety and Health Administration (OSHA), employers are legally required to provide a safe workplace. This includes taking all reasonable precautions to ensure that workplace conditions are safe and that hazards have been adequately addressed.

Due diligence is designed to ensure that you take every reasonable precaution for your workers. And if you practice it often, it will ensure that you make safety precautions a habit.

Mandatory Compliance

This means that due diligence is a good way to make sure that you meet your mandatory safety compliance requirements.

OSHA has a huge array of guidelines to ensure that industries address safety hazards. And while those guidelines are complex and ever-changing, ignorance of the law is not an excuse for breaking it.

OSHA isn't afraid to enforce those rules, either. The current penalty for serious violations is up to $13,260 per violation. If it's a willful or repeated penalty, the fine can get as high as $132,598 per violation, depending on the severity of the violation.

And keep in mind, OSHA isn't the only one who enforces workplace safety. The Environmental Protection Agency (EPA) and the Department of Transportation (DOT) are just two examples of organizations that track workplace safety violations and penalize you for crossing the line.

You may also have to deal with local and state safety agencies, industry regulators, and even workers unions. Workers may be willing to tolerate a level of acceptable risk at work, but that doesn't mean they need to tolerate unsafe working conditions just to pay the bills.

Due diligence helps you avoid the regulatory nightmare waiting on the other side of careless safety violations.

Due Diligence and OSHA's Multi-Employer Citation Policy

Due diligence gets more complicated, and more important, on sites where multiple employers are present. This is where OSHA's multi-employer citation policy comes into play.

Under this policy, OSHA can cite more than one employer for the same hazardous condition at a worksite. The agency evaluates each employer's role against four categories: creating employer, exposing employer, correcting employer, and controlling employer. A general contractor, for example, can be cited as a controlling employer even if its own workers were never exposed to the hazard, simply because it had the authority to ensure the hazard was corrected and failed to exercise that authority.

This means due diligence can't stop at your own employees and your own four walls. If you bring in contractors, subcontractors, or temporary staff, your due diligence obligations extend to monitoring and correcting hazards those workers create or encounter, even when those workers don't report to you directly.

The Contractor Management Connection

This is where contractor management becomes a due diligence issue rather than just an administrative one.

A documented contractor management program gives you the paper trail to demonstrate due diligence if OSHA ever evaluates your role under the multi-employer policy. At minimum, this should include prequalifying contractors based on their safety history, verifying training and certifications before work begins, conducting site-specific safety orientations, and tracking corrective actions when a contractor's work creates a hazard.

Without this kind of system, you have no way to show an inspector that you exercised reasonable care over work happening on your site, regardless of whose payroll the workers are on. With it, you have evidence that you identified hazards, communicated them, and followed up, which is exactly what due diligence requires.

Implementing Due Diligence in Workplace Safety

Of course, knowing that you need due diligence in workplace safety and actually implementing it are two very different things. It's recommended to create a safety plan prior to executing any safety initiative. For more tips on developing the best strategies and solutions, visit the EHS Insight Blog.

FAQ

What is due diligence in workplace safety?

Due diligence in workplace safety is the level of care, judgment, and action that a reasonable employer is expected to exercise to prevent workplace accidents and injuries. It requires identifying hazards, implementing controls, and taking corrective action when problems arise.

What is OSHA's multi-employer citation policy?

OSHA's multi-employer citation policy allows the agency to cite more than one employer for the same hazard at a worksite. Employers are evaluated as creating, exposing, correcting, or controlling employers, meaning a general contractor or site controller can be cited even if its own employees weren't directly exposed to the hazard.

Does due diligence apply to contractors and subcontractors?

Yes. If contractors or subcontractors are working on your site, your due diligence obligations extend to identifying and correcting hazards related to their work, not just hazards affecting your direct employees. This is especially true if you function as a controlling employer under OSHA's multi-employer policy.

How does contractor management support due diligence?

A documented contractor management program, covering prequalification, training verification, site orientations, and corrective action tracking, gives employers evidence of due diligence. This documentation can be critical if OSHA evaluates your role at a multi-employer worksite.

What happens if an employer fails to exercise due diligence?

Failing to exercise due diligence can result in OSHA citations and penalties, which currently run up to $13,260 per serious violation and up to $132,598 per willful or repeated violation. Other agencies, including the EPA and DOT, along with state and local regulators, may also impose penalties.