3 Costs of Complying with OSHA’s Hazard Communication Standard

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By: Julie MacGregor, President and CEO Global Safety Management

Let’s face it, complying with OSHA’s Hazard Communication Standard is a headache. It involves understanding the regulations, gathering SDSs, generating chemical reports, and much more. Because of this, many companies either do nothing or do what they believe to be bare minimum. The problem is that the regulations are often misunderstood and the so-called bare minimum may actually not be enough, leaving your business out of compliance.

Among other things, assigning your existing staff members to handle compliance can cost more than you think. Specifically, there are 3 main costs that OSHA’s Hazard Communication can pose to businesses: risk of fines and related legal costs, direct and indirect staff costs and opportunity costs. Together these costs can significantly affect your bottom line and in some cases even threaten the viability of your business.

The first and most obvious cost is the risk of OSHA fines and the related legal costs. When told that the fines can be up to $7,000.00 per day per incident, most people discount this. They think “I’ve never been inspected by OSHA,” so they erroneously assume their risk is 0%. So, let’s examine that assumption.

In Fiscal Year 2013, OSHA issued more than 6,000 citations for Hazard Communication violations alone (the regulation that affects Safety Data Sheets) for a total of more than $3 million in fines. In FY 2014, more than 6,100 citations were issued.
In FY 2015, OSHA has increased total number of inspections above the 83,380 done in FY 2014.
Consistently since FY 2011, Hazard Communication has been in the top 3 most cited violations that OSHA made (https://www.osha.gov/).
Clearly, the risk of an OSHA inspection is greater than 0%. How much time and money would you and/or your lawyers spend resolving the cause of the citation and/or fighting it? This isn’t even the biggest cost of compliance.

The biggest hidden cost is in direct and indirect staff costs. For example, to be compliant with your Safety Data Sheets (SDS), you must regularly contact manufacturers to obtain the most current one. You must keep them organized and readily available. If your staff is doing it right, they are likely spending, on average, at least 3 hours per week. How much do you pay that staff? What aren’t they doing because they are spending time dealing with SDS? This brings us to the third cost of compliance.

Opportunity cost is the revenue you lose because an employee is spending time on something else. Some businesses have their professional level employees manage SDS. Ouch! Talk about high opportunity costs! This happens because of a lack of understanding of what it takes to be truly compliant.

The fact is, complying with OSHA is the cost of doing business. But, if you aren’t careful, it could be costing you more than it needs to. With today’s technology, there are cost effective ways to be truly compliant. One such way is through SDSManager™ and SDSPublisher™, Global Safety Management’s eservices designed to make compliance easy and affordable. I encourage you to learn more about these innovative services by visiting GSMsds.com or by contacting GSM at 877-683-7460.

The above revised blog, “3 Costs of Complying with OSHA’s Hazard Communication Standard” was originally posted on Off The Cusp for Patterson Dental in July 2015.