OSHA 4 IV JRNL

OSH 2304, Introduction to Contractor Safety 1

Course Learning Outcomes for Unit IV Upon completion of this unit, students should be able to:

4. Summarize methods for ensuring contractor accountability. 4.1 Identify relationships between host employer and contractor liability. 4.2 Compare and contrast insurance requirements. 4.3 Develop best practices for contractor prequalifications.

Required Unit Resources Chapter 5: Workers’ Compensation and Other Kinds of Construction Insurance In order to access the following resources, click the link below. Occupational Safety and Health Administration. (2016). Recommended practices for safety and health

programs: Communication and coordination for host employers, contractors, and staffing agencies. United States Department of Labor. https://www.osha.gov/shpguidelines/communication.html

Occupational Safety and Health Administration. (2014). Injury and illness recordkeeping requirements

(Temporary Worker Initiative Bulletin No. 1). United States Department of Labor. https://www.osha.gov/temp_workers/OSHA_TWI_Bulletin.pdf

Wilbanks, D. W. (2019, July). Contractor safety prequalification: The significant limitations of loss rates.

Professional Safety, 64(7), 22–26. https://libraryresources.columbiasouthern.edu/login?url=https://www.proquest.com/scholarly- journals/contractor-safety-prequalification-significant/docview/2251995068/se-2?accountid=33337

Unit Lesson

Who’s on First? We touched briefly in Units II and III on the relationships between the controlling (host) contractor, and the contractor or subcontractor roles. Let’s look a little more deeply into the way this actually works. In the unit reading assignment, we look at what Occupational Safety and Health Administration (OSHA) has to recommend regarding contractors, subcontractors, independent contractors, and temporary help from staffing agencies. The key issue here is communication. Why is this so important? Would you want to accept a job not knowing anything about the hazards? Letting everyone know what hazards may be present, how to avoid them, and how to report accidental contact with them is part of the host employer’s responsibility. Think of it this way. If you invite someone to your home, and you know that your front step is damaged and someone could fall through it, would you fix the step, route a path around it, tell them to avoid that step, or take the chance that they will see it for themselves? Of course, fixing the step is the best choice, but in the event that is not possible and there is no avoiding it, you would want to make them aware of it so they can avoid contact themselves. Communication really is where it all starts. As the contract manager, construction manager, or general contractor, your company is considered to be the host employer. You control the entire site. As the employer in control of the entire site, it is your responsibility to recognize and identify potential hazards and work to eliminate them. Communication is a two-way street. It is also the host employer’s responsibility to listen to the

UNIT IV STUDY GUIDE Contractor Prequalification and Insurance

OSH 2304, Introduction to Contractor Safety 2

UNIT x STUDY GUIDE Title

contractors and to ask what hazards their work will bring to the site. As the host employer, you are responsible to find out what those hazards are. Working with the contractors, you must understand what their operations entail, how they interact with other operations, and the hazards that may be added to the site as a whole. Each phase of a project will bring its own unique hazards, and it is up to you to ensure communication about these is transmitted to everyone. How are you going to accomplish this? Coordination between all is critical. Holding weekly coordination meetings to discuss not only the ongoing work, but the hazards involved is crucial in ensuring everyone is made aware of them. There may be multiple activities going on in the same area and without coordination, if so, nobody is going to know what the other is doing, and that can cause chaos. Consider this example from building construction—your electricians need to work in the same area as your plumbers, at the same time. Ladders everywhere! And materials all over the place. Let’s add in some HVAC work, because the ductwork also has to be installed. So now we have scissor lifts running around and pallet jacks trying to make their way through the mess. All of these activities go hand in hand, and all have to be installed in coordination with each other. If you start installing the ductwork before the plumbing or fire sprinkler pipes go in, how do you reach above the ductwork to get where you need to be? (I have seen workers try to climb on the ductwork to get to the plumbing lines!).

Compare and Contrast Insurance Requirements Preparing for the worst. Insurance can be defined as a contract between the insurer (i.e., an insurance company) and the insured (person or company who purchase the policy) to reimburse for losses under predetermined circumstances in exchange for a fee (the premium). What does this mean to you in plain language? The English commonly use the term assurance, which has the same meaning as insurance in the United States (International Risk Management Institute, n.d.). For this course, we are only going to look at workers’ compensation. This is the type of insurance we, as safety professionals, deal with most regularly. When a worker is injured as a part of doing their job, in most cases, measures are in place to ensure they are taken care of. They do not have to pay for their own medical treatment or therapy, and if they lose time from work, they will receive a portion of their average wages (after a waiting period, in most states). This serves two purposes: 1) to get the worker healthy and whole and back to work; and 2) to eliminate the threat of lawsuits against the employer. This is the case in most industries, but not all, and workers’ compensation will vary from state to state, as it is regulated at the state level (Goetsch, 2018). This insurance only covers employees. In the required unit resource readings, we look at different levels of who is considered an employee, and who is not. Now, here is where this gets a little complicated in terms of contractors. Let’s look at the different levels of contractors. Your company may hire a contractor to do some work in your facility that your own work force would not normally do, such as repairs, modifications, additions, or other work. Again, some of you might call these turnarounds or shutdowns. Any work that your own company does not self-perform will likely be contracted out. Now, this work may require a whole company to do the work, or just a person or two. Maybe you just need to have landscaping maintenance. Or hire a single consultant.

So Who Covers These Workers? In most cases, the contractor/subcontractor for larger work will have their own workers’ compensation insurance that covers their own employees. But let’s look at this: in the consultant’s case, they should have what is called professional liability insurance, which should be part of the contract you have with them, protecting your company from unforeseen events. In other cases where you might hire an independent contractor, such as a lawn care firm, how do you handle this? Do you check to see if they have insurance, and are bonded and licensed? Going back to the contractor/subcontractor that your company brings in to do major work, are you checking to see if they have the right coverage in place? What happens if they have all temporary workers performing the tasks? How are they covered?

OSH 2304, Introduction to Contractor Safety 3

UNIT x STUDY GUIDE Title

In the required unit resources reading, we learn that there are many different definitions of employee. How do we make sure all workers on our sites are covered under workers’ compensation? How do we ensure that those uncovered workers cam not turn around and make claims against our companies? If your company uses a staffing agency to provide temporary workers, it would be a good idea to review the insurance coverage the staffing agency provides. In many cases, they will provide workers’ compensation, however the deductible will be large. OSHA (2014) holds that, in most cases, the host employer and the staffing agency will be joint employers. What does this mean? In your required unit resources reading, we learn that OSHA considers the host employer, in many cases, to be the one responsible for recording the injury or illness on their OSHA log. The key factor here is supervision and direction. If the host contractor is providing the day-to-day supervision, the temporary worker becomes an employee of the host employer. This can, and has, resulted in the temporary worker being covered under the host employer’s workers compensation policy. In a case several years ago, several temporary workers were hired at a project to do general labor. One of them fell and sustained a head injury which eventually led to his death. The staffing agency claimed that because the host employer provided the direct supervision, the employee belonged to the host employer. The staffing agency did have workers’ compensation insurance; however they also had a million dollar deductible, meaning that everything up to that million dollars came out of the staffing agency’s pocket. If you have used a staffing agency, you may have noticed that the workers will bring their “tickets” to be signed by the host employer’s supervisor at the end of each day. Does your company read the back of those tickets? They are essentially a contract you are agreeing to abide by. Many host employers now use a contract with the staffing agency and insist that they provide their own supervision, much like any other contracted or subcontracted firm. This can provide protections for the host employer. Now, as we read above, while the worker cannot sue the employer under workers’ compensation, contracted employees are able, in most cases, to sue the host employer under their general liability policy. But that is another story for another day. This rolls us right into prequalifying our contractors. We should be looking at several factors when hiring contractors. We should be using staffing agencies and making sure they have their own supervision— workers’ compensation and other insurance is one of those areas.

Develop Best Practices for Contractor Pre-Qualifications: Choosing the Best There are some great methods to ensure the safety of all, even before beginning work. One of the best ways is to do your homework! Prequalification of contractors is a great way to ascertain whether or not they have a history of injuries, fatalities, or violations. Check their past performance. Review their safety program. Some companies perform their own prequalification; some use a third-party to review a contractor’s performance history. Either way you go, it is a best practice to know who you are working with. Convincing your company to perform prequalifications before hiring contractors is one of the best ways to gauge the safety knowledge of those you will be working with. Of course, many small firms may not have strong safety programs. The independent contractor will rely on the host employer to provide the rules for the project. The staffing agency should work with the host employer to ensure that their employees are in tune with your policies and programs. It is a good practice to require that the contractor provide a site safety representative with a site specific safety plan developed for the work they will be performing on the particular project. A generic corporate safety manual is not a site specific safety plan (SSSP). Contractors should know and understand the work they are to perform and the environment in which they will be performing it. Once you have your own SSSP developed, you can share it with your contractors so they can understand what is expected of them before they come on site, and formulate their own SSSP for their specific work. By submitting an SSSP, it demonstrates that they have knowledge of the hazards they may encounter. Remember to require that they submit an example of their Pre-task Analysis (PTA) or Job Safety Analysis (JSA).

OSH 2304, Introduction to Contractor Safety 4

UNIT x STUDY GUIDE Title

References Goetsch, D. L. (2018). Construction safety and the OSHA standards (2nd ed.). Pearson. International Risk Management Institute. (n.d.). Insurance. https://www.irmi.com/term/insurance-

definitions/insurance Occupational Safety and Health Administration. (2014). Injury and illness recordkeeping requirements

(Temporary Worker Initiative Bulletin No. 1). United States Department of Labor. https://www.osha.gov/temp_workers/OSHA_TWI_Bulletin.pdf

OSH 2304, Introduction to Contractor Safety 1

Course Learning Outcomes for Unit IV Upon completion of this unit, students should be able to:

4. Summarize methods for ensuring contractor accountability. 4.1 Identify relationships between host employer and contractor liability. 4.2 Compare and contrast insurance requirements. 4.3 Develop best practices for contractor prequalifications.

Required Unit Resources Chapter 5: Workers’ Compensation and Other Kinds of Construction Insurance In order to access the following resources, click the link below. Occupational Safety and Health Administration. (2016). Recommended practices for safety and health

programs: Communication and coordination for host employers, contractors, and staffing agencies. United States Department of Labor. https://www.osha.gov/shpguidelines/communication.html

Occupational Safety and Health Administration. (2014). Injury and illness recordkeeping requirements

(Temporary Worker Initiative Bulletin No. 1). United States Department of Labor. https://www.osha.gov/temp_workers/OSHA_TWI_Bulletin.pdf

Wilbanks, D. W. (2019, July). Contractor safety prequalification: The significant limitations of loss rates.

Professional Safety, 64(7), 22–26. https://libraryresources.columbiasouthern.edu/login?url=https://www.proquest.com/scholarly- journals/contractor-safety-prequalification-significant/docview/2251995068/se-2?accountid=33337

Unit Lesson

Who’s on First? We touched briefly in Units II and III on the relationships between the controlling (host) contractor, and the contractor or subcontractor roles. Let’s look a little more deeply into the way this actually works. In the unit reading assignment, we look at what Occupational Safety and Health Administration (OSHA) has to recommend regarding contractors, subcontractors, independent contractors, and temporary help from staffing agencies. The key issue here is communication. Why is this so important? Would you want to accept a job not knowing anything about the hazards? Letting everyone know what hazards may be present, how to avoid them, and how to report accidental contact with them is part of the host employer’s responsibility. Think of it this way. If you invite someone to your home, and you know that your front step is damaged and someone could fall through it, would you fix the step, route a path around it, tell them to avoid that step, or take the chance that they will see it for themselves? Of course, fixing the step is the best choice, but in the event that is not possible and there is no avoiding it, you would want to make them aware of it so they can avoid contact themselves. Communication really is where it all starts. As the contract manager, construction manager, or general contractor, your company is considered to be the host employer. You control the entire site. As the employer in control of the entire site, it is your responsibility to recognize and identify potential hazards and work to eliminate them. Communication is a two-way street. It is also the host employer’s responsibility to listen to the

UNIT IV STUDY GUIDE Contractor Prequalification and Insurance

OSH 2304, Introduction to Contractor Safety 2

UNIT x STUDY GUIDE Title

contractors and to ask what hazards their work will bring to the site. As the host employer, you are responsible to find out what those hazards are. Working with the contractors, you must understand what their operations entail, how they interact with other operations, and the hazards that may be added to the site as a whole. Each phase of a project will bring its own unique hazards, and it is up to you to ensure communication about these is transmitted to everyone. How are you going to accomplish this? Coordination between all is critical. Holding weekly coordination meetings to discuss not only the ongoing work, but the hazards involved is crucial in ensuring everyone is made aware of them. There may be multiple activities going on in the same area and without coordination, if so, nobody is going to know what the other is doing, and that can cause chaos. Consider this example from building construction—your electricians need to work in the same area as your plumbers, at the same time. Ladders everywhere! And materials all over the place. Let’s add in some HVAC work, because the ductwork also has to be installed. So now we have scissor lifts running around and pallet jacks trying to make their way through the mess. All of these activities go hand in hand, and all have to be installed in coordination with each other. If you start installing the ductwork before the plumbing or fire sprinkler pipes go in, how do you reach above the ductwork to get where you need to be? (I have seen workers try to climb on the ductwork to get to the plumbing lines!).

Compare and Contrast Insurance Requirements Preparing for the worst. Insurance can be defined as a contract between the insurer (i.e., an insurance company) and the insured (person or company who purchase the policy) to reimburse for losses under predetermined circumstances in exchange for a fee (the premium). What does this mean to you in plain language? The English commonly use the term assurance, which has the same meaning as insurance in the United States (International Risk Management Institute, n.d.). For this course, we are only going to look at workers’ compensation. This is the type of insurance we, as safety professionals, deal with most regularly. When a worker is injured as a part of doing their job, in most cases, measures are in place to ensure they are taken care of. They do not have to pay for their own medical treatment or therapy, and if they lose time from work, they will receive a portion of their average wages (after a waiting period, in most states). This serves two purposes: 1) to get the worker healthy and whole and back to work; and 2) to eliminate the threat of lawsuits against the employer. This is the case in most industries, but not all, and workers’ compensation will vary from state to state, as it is regulated at the state level (Goetsch, 2018). This insurance only covers employees. In the required unit resource readings, we look at different levels of who is considered an employee, and who is not. Now, here is where this gets a little complicated in terms of contractors. Let’s look at the different levels of contractors. Your company may hire a contractor to do some work in your facility that your own work force would not normally do, such as repairs, modifications, additions, or other work. Again, some of you might call these turnarounds or shutdowns. Any work that your own company does not self-perform will likely be contracted out. Now, this work may require a whole company to do the work, or just a person or two. Maybe you just need to have landscaping maintenance. Or hire a single consultant.

So Who Covers These Workers? In most cases, the contractor/subcontractor for larger work will have their own workers’ compensation insurance that covers their own employees. But let’s look at this: in the consultant’s case, they should have what is called professional liability insurance, which should be part of the contract you have with them, protecting your company from unforeseen events. In other cases where you might hire an independent contractor, such as a lawn care firm, how do you handle this? Do you check to see if they have insurance, and are bonded and licensed? Going back to the contractor/subcontractor that your company brings in to do major work, are you checking to see if they have the right coverage in place? What happens if they have all temporary workers performing the tasks? How are they covered?

OSH 2304, Introduction to Contractor Safety 3

UNIT x STUDY GUIDE Title

In the required unit resources reading, we learn that there are many different definitions of employee. How do we make sure all workers on our sites are covered under workers’ compensation? How do we ensure that those uncovered workers cam not turn around and make claims against our companies? If your company uses a staffing agency to provide temporary workers, it would be a good idea to review the insurance coverage the staffing agency provides. In many cases, they will provide workers’ compensation, however the deductible will be large. OSHA (2014) holds that, in most cases, the host employer and the staffing agency will be joint employers. What does this mean? In your required unit resources reading, we learn that OSHA considers the host employer, in many cases, to be the one responsible for recording the injury or illness on their OSHA log. The key factor here is supervision and direction. If the host contractor is providing the day-to-day supervision, the temporary worker becomes an employee of the host employer. This can, and has, resulted in the temporary worker being covered under the host employer’s workers compensation policy. In a case several years ago, several temporary workers were hired at a project to do general labor. One of them fell and sustained a head injury which eventually led to his death. The staffing agency claimed that because the host employer provided the direct supervision, the employee belonged to the host employer. The staffing agency did have workers’ compensation insurance; however they also had a million dollar deductible, meaning that everything up to that million dollars came out of the staffing agency’s pocket. If you have used a staffing agency, you may have noticed that the workers will bring their “tickets” to be signed by the host employer’s supervisor at the end of each day. Does your company read the back of those tickets? They are essentially a contract you are agreeing to abide by. Many host employers now use a contract with the staffing agency and insist that they provide their own supervision, much like any other contracted or subcontracted firm. This can provide protections for the host employer. Now, as we read above, while the worker cannot sue the employer under workers’ compensation, contracted employees are able, in most cases, to sue the host employer under their general liability policy. But that is another story for another day. This rolls us right into prequalifying our contractors. We should be looking at several factors when hiring contractors. We should be using staffing agencies and making sure they have their own supervision— workers’ compensation and other insurance is one of those areas.

Develop Best Practices for Contractor Pre-Qualifications: Choosing the Best There are some great methods to ensure the safety of all, even before beginning work. One of the best ways is to do your homework! Prequalification of contractors is a great way to ascertain whether or not they have a history of injuries, fatalities, or violations. Check their past performance. Review their safety program. Some companies perform their own prequalification; some use a third-party to review a contractor’s performance history. Either way you go, it is a best practice to know who you are working with. Convincing your company to perform prequalifications before hiring contractors is one of the best ways to gauge the safety knowledge of those you will be working with. Of course, many small firms may not have strong safety programs. The independent contractor will rely on the host employer to provide the rules for the project. The staffing agency should work with the host employer to ensure that their employees are in tune with your policies and programs. It is a good practice to require that the contractor provide a site safety representative with a site specific safety plan developed for the work they will be performing on the particular project. A generic corporate safety manual is not a site specific safety plan (SSSP). Contractors should know and understand the work they are to perform and the environment in which they will be performing it. Once you have your own SSSP developed, you can share it with your contractors so they can understand what is expected of them before they come on site, and formulate their own SSSP for their specific work. By submitting an SSSP, it demonstrates that they have knowledge of the hazards they may encounter. Remember to require that they submit an example of their Pre-task Analysis (PTA) or Job Safety Analysis (JSA).

OSH 2304, Introduction to Contractor Safety 4

UNIT x STUDY GUIDE Title

References Goetsch, D. L. (2018). Construction safety and the OSHA standards (2nd ed.). Pearson. International Risk Management Institute. (n.d.). Insurance. https://www.irmi.com/term/insurance-

definitions/insurance Occupational Safety and Health Administration. (2014). Injury and illness recordkeeping requirements

(Temporary Worker Initiative Bulletin No. 1). United States Department of Labor. https://www.osha.gov/temp_workers/OSHA_TWI_Bulletin.pdf