Who's Responsible for Safety?

Even when relying on a PEO, keeping employees safe is the contractor's job - but the PEO can help

Until recently the responsibility for keeping employees safe on the job sat squarely in the lap of the employer. Contractors were responsible for safety training, identifying, correcting, and monitoring potential safety concerns, providing proper safety gear, and for carrying proper workers' compensation insurance.

But as the business world has become increasingly complex a new approach to employee management — Professional Employer Organizations (PEO), or basically employee leasing — has become a new player in the market. And thousands of business, including contractors involved in pavement maintenance and reconstruction, have turned to PEOs to help simplify the employee management aspect of their business. But one aspect of management can't be turned over to the PEO, and that is safety.

Traditionally PEOs have worked to make sure the safety responsibility remained with the client, in the case of the pavement maintenance industry that client is the contractor. But as a result of licensing and registration requirements in a number of states, some of that safety responsibility for safety has been shifted to the PEO.

And while most PEOs understand and support the efforts of the Occupational Safety and Health Administration (OSHA), they didn't understand the relationship between OSHA responsibilities and workers compensation. Basically, OSHA, a federal program, places requirements on employers to provide proper safety training, a safe worksite, and safe equipment to their employees. Workers' compensation, on the other hand, involves state statutes that promote safety in the workplace but also provide a means to compensate workers injured on the job. As an employer, PEOs are responsible for employee safety as much as the contractor is; it is the contractor, however, who foots the bill for the workers' compensation costs.

So when working with a PEO here are seven steps you can take to make sure you're providing effective safety measures that help keep your company in compliance and also control insurance costs.

  1. Understand and accept the goal. While it's important to control your insurance costs and comply with OSHA requirements, the goal is to keep your employees safe. Too often clients are more concerned with meeting specific OSHA criteria and with reducing their premium costs and lose sight of the real goal. The reality is that if you establish a safety program to keep your employees safe you will likely comply with OSHA requirements and have fewer safety incidents—which will help you control your costs.
  2. Hiring a PEO does not absolve you of any safety responsibilities. Your PEO should assist and guide you as you develop a safety program, but it remains the contractor's responsibility to ensure the safety of employees.
  3. Make a commitment to safety and enlist your PEO in your effort. OSHA establishes bare minimums for a safety program, but it is advisable that each contractor go beyond this minimum to create a culture of safety throughout the company. This includes enlisting senior management's time, money, and other resources to make the company's commitment to safety as visible as possible.
  4. Make "safety" a part of daily conversation. Research has proven that contractors who "talk up" safety to their employees end up with fewer on-the-job accidents. Keeping "safety" in the forefront of conversation also demonstrates commitment of upper management. So make sure your safety program involves regular communications to employees about safety-related policies, safety goals, and safety processes. Make sure to hold all employees accountable for accident-prevention processes.
  5. Make sure to implement all applicable OSHA programs. This seems obvious but you would be surprised how many clients who hire PEOs have not taken the steps OSHA requires. Contractors obviously should do this with or without involvement of a PEO, but contractors hiring a PEO can turn to that group for help in assessing their safety program. In fact, many PEOs will require the contractor comply with all applicable OSHA regulations prior to bringing them on as a client (because once the contractor becomes a client the PEO can be liable for safety violations under OSHA's Multi-Employer Worksite Policy).
  6. Ask your PEO for help in developing a safety program. Most PEOs will have an industry-specific safety program they can offer to each client. These programs, often developed specifically for each industry or type of industry, go beyond basic OSHA regulations and can include all workers' compensation policies, processes, training, and forms.
  7. Encourage your PEO to monitor your safety policy. While it might seem unlikely you will do this, keep in mind that you are hiring your PEO to help make your business run more smoothly and ultimately more profitably. By inviting your PEO to monitor your safety efforts you are taking full advantage of their expertise, probably creating a safer work environment which is protecting your employees, and probably controlling your costs.

Following these tips will enable you to work more closely with your PEO. You are enlisting your PEO as a partner of sorts in developing and protecting your business. And remember, if you are using a PEO, and you don't comply with appropriate requirements, your PEO can terminate you as an "unsafe" or "non-compliant" customer.

Kathryn S. Bernard Esq. is executive vice president and general counsel, employee management services, CBS Personnel Services, 435 Elm St., Cincinnati, OH 45202; kathy.bernard@cbscompanies.com. She will present "Freedom (and Profits) Through Employee Leasing" at National Pavement Expo, Feb.2-5 in Atlanta. If it's safety information you're seeking, her partner, Ken Springer, presents "Making the Case for an Effective Safety Program."