Last May, an inspector from the Occupational Safety & Health Administration arrived at Jancoa Janitorial Services in Cincinnati for a surprise inspection. Before the inspector left, owner Tony Miller had been cited for two extension cord violations and hit with a $9,000 fine. Miller was determined to fight -- until he learned that his legal fees would exceed the amount of the penalty. He settled for $5,000 and put the first blemish on his record after 33 years in business.
It's a common scenario. While large companies often hire OSHA consultants and attorneys to help them comply with labyrinthine regulations and fight fines, few small businesses have such resources. About 90% of small companies hit with OSHA fines settled or paid the fines without contest in 2004, according to the Labor Dept.
But doing so may have unwelcome consequences. Potential customers may ask to see your business record and be put off by citations, and your insurance premiums may go up. If OSHA finds a similar problem in the future, your next citation may carry stiffer fines and penalties, says Patrick Lyden, manager of legislative affairs for the National Federation of Independent Business.
Relief may be in sight. In July, the House of Representatives passed a package of four bills, all sponsored by Charles W. Norwood (R-Ga.), addressing some of entrepreneurs' biggest gripes against OSHA. Briefly, the bills would allow companies with fewer than 100 employees and a net worth of less than $7 million to recoup attorneys' fees after a successful appeal. They would also grant leniency to businesses that can come up with a plausible reason for not meeting the 15-day deadline for filing an appeal. Finally, they would expedite the case review process and strengthen the independence of the review commission that hears appeals. "OSHA for a long time has recognized that its regulatory programs disproportionately impact small businesses," says Mark Kaster, a Minneapolis-based partner at law firm Dorsey & Whitney specializing in regulatory law. "The new legislation recognizes that we need a balanced approach to enforcement."
The bills still have to get through the Senate -- no sure thing. Similar bills introduced last year never reached a vote. But with this year's legislation receiving bipartisan support in the House and Senator Mike Enzi (R-Wyo.) heading up the Senate committee that oversees OSHA issues, supporters are optimistic. Enzi is working on a new version of the bill that he plans to introduce in the fall. Says Jancoa's Miller: "Anything that can help the small businessperson be able to defend themselves at a reasonable cost would certainly help every small business in the country." No doubt owners of the 67,000 small businesses OSHA inspects each year would agree.
By Michelle Dammon Loyalka