Posted on: 25th January, 2013

AB 2774 – Another reason savvy employer’s rely on Fast Response Onsite Testing (FROST) to provide respiratory protection and hearing conservation compliance programs. This relatively new bill greatly increases the exposure and fines for California employers. Teamed with FROST, California employers can rest assured that their workforce is safe and compliant.

On September 30, 2010, California Governor Schwarzenegger signed legislation that increases the ability of the California Division of Occupational Safety and Health (“Cal/OSHA”) to issue citations to employers for “serious violations” of occupational safety and health standards. The bill, AB 2774, makes significant statutory changes that have important ramifications for employers subject to enforcement by Cal/OSHA. AB 2774 expands the definition of “serious violation” set forth in California Labor Code section 6432.

AB 2774 expands the definition of “serious violation” set forth in California Labor Code section 6432. The bill also establishes a rebuttable presumption that a serious violation has occurred in certain circumstances, and enables Cal/OSHA to rely on the testimony of its inspectors to prove the existence of serious violations. AB 2774 takes effect on January 1, 2011. Expanded Definition of “Serious Violation”

California law currently specifies that a serious violation exists “if there is a substantial probability that death or serious physical harm could result from a violation.” Labor Code § 6432(a). AB 2774 relaxes this standard in two ways: it eases the “substantial probability” requirement and it expands the definition of “serious physical harm.”

Under existing law, “substantial probability” refers to “the probability that death or serious physical harm will result assuming an accident or exposure occurs as a result of the violation.” Labor Code section 6432(c). The Appeals Board has interpreted this requirement to mean that Cal/OSHA must prove that death or serious injury is “more likely than not” to result from the violative condition.

AB 2774 changes the “substantial probability” requirement to “a realistic possibility that death or serious physical harm could result from the actual hazard created by the violation.” The “realistic possibility” standard is not defined in the bill or elsewhere in the Labor Code, but it is clear from the legislative history that the new standard is intended to be a significantly lower likelihood of occurrence of death or serious physical harm than required under existing law.

Key Implications
Enactment of AB 2774 has the following key implications for employers subject to Cal/OSHA enforcement:

• The number of citations for serious violations issued by Cal/OSHA is likely to increase, along with attendant penalties, in part because of the expanded definition of “serious physical harm.” This effect will be greatest in cases where an accident results in hospitalization of an employee for less than one day.
• The proportion of citations that Cal/OSHA classifies as “serious” (as opposed to regulatory or general) is likely to increase from the 2009 level of approximately 19% and may approach the 43% national average for other delegated state programs.
• Successful employer appeals of citations for serious violations will be more difficult, in part because the standard to overcome the rebuttable presumption is high and because Cal/OSHA will be able to provide the existence of serious violations based only on inspector testimony.
• Employers may need to provide expert witness testimony to counter testimony by Cal/OSHA inspectors.
• Claims made by injured employees for “serious and willful” injuries and corresponding increases in workers compensation benefits are likely to increase along with the number of citations for serious violations.
• By establishing a process for communication between Cal/OSHA and employers prior to issuance of a citation for a serious violation, the bill should provide greater consistency and predictability for employers with respect to when violations will be classified as serious.
• Employers are likely to pursue litigation to clarify the new standards established by the bill.