All posts tagged Wright & Kimbrough Insurance Services

Why You Can’t Afford to Not Have Professional Liability Insurance

At some point, most businesses are involved in some type of legal dispute, be it over an alleged physical or property damage to a third party or financial injury to a competitor, client or vendor.

And you’d surely want an insurance backstop in case you are targeted, to help pay for legal costs and any settlements or judgments. The type of liability that your business is going to face will depend on the type of work that you do.

If you’re in a service trade, the chances of your work causing someone physical damage or harm are remote, but you could still be sued for not living up to your part of a contract or if your services caused a client to lose money.

The costs of defending against a lawsuit of that type could quickly mount, even if you come out victorious in the end. Those costs would have to be borne out of pocket if you didn’t have the appropriate insurance.

The costs of not carrying professional liability insurance in many services trades can be a disaster to your finances as a lawsuit can catch you by surprise, even for work that you may have done years ago.


The unfunded lawsuit

Here’s a scenario that could leave you scrambling for funds. You run an engineering firm and a manufacturer sues your business after one of the machine parts that you designed failed, causing one of the client’s machines to seize up, resulting in $58,000 in damage to the machine and production downtime.

The lawsuit accuses your firm of negligence. Your business could be facing serious financial hardship as the suit asks for the cost of repairs and the lost production.

Here’s what you’re looking at:

  • Attorneys’ fees – Depending on where you live, these can range from $150 to $400 an hour, or more if you go with a topflight law firm.
  • Court expenses – Fees for copying, filing and other miscellaneous tasks all add up.
  • Other legal fees – You may need to call expert witnesses, as well.
  • Damages or settlements – Even if you try to reach a settlement with your client, they may opt to take the case to trial in hope of winning the full amount of the damages they are claiming.


You can see how the costs can quickly mount and if it gets to a damages or settlements stage, the costs will increase significantly.

You should know too that even if the case was frivolous, you’d still have to pay attorneys to defend it and file motions to have it tossed out of court. That alone could run you at least $5,000 in legal fees – a lot of money to pay out of pocket.

In fact, the U.S. Small Business Administration estimated in a recent study that legal costs for litigation ranged from $3,000 to $150,000, and only one-third of small business owners reported spending less than $10,000.

And there can be other fallout, as well. Perhaps word has gotten out about the lawsuit, damaging your reputation and ability to attract new clients and retaining existing ones.

And if one client has sued, others who may have held off and had similar experiences could also file suit.


Professional liability insurance

Insurance could have saved you from these significant expenses. The coverage, which is relatively inexpensive, is what’s known as “claims-made” coverage.

That means your policy must be active when the alleged incident occurred and when the claim is filed, in order to receive your benefits.

Client allegations that your work caused them a financial loss are often covered by a professional liability policy.

Professional liability insurance can cover errors and oversights with your work, as well as legal fees and the cost of settlements or judgments.

Cost: The average yearly cost of professional liability insurance for a small business, regardless of the limits chosen or the industry of the business, was $985.49 in 2015, according to the Insurance Information Institute. The median was $758.00.

New Slip, Trip, Fall Prevention Rules for General Industry

A Caucasian, female office worker climbing on a ladder trying to reach for a box on a shelf.  She wears a black outfit from top to bottom and has brown hair.  She stands on a ladder that is a bit too short and leans forward dangerously trying to retrieve the box.  The shelf has several compartments with the same box in each compartment.  There is a wall and large glass windows on the left, behind her.  There is a white ceiling above her.  The floor of the office is out of view.

Federal OSHA implemented a new rule on Jan. 17 that is aimed at reducing slip, trip and fall hazards in the workplace.

The revisions are aimed at tackling one of the main causes of worker deaths and injuries in American workplaces by applying rules designed for the construction and manufacturing sectors to other general industries.

They add requirements for personal fall protection systems and eliminate existing mandates to use guardrails as a primary fall protection method. They also allow employers to choose from accepted fall protection systems which type they want to use.

The new standard will prevent some 30 workplace deaths and more than 5,800 injuries every year, OSHA says.

While the rules will have little impact on construction and manufacturing, management in other industries needs to bone up on the rules to ensure companies are in compliance.

The most significant update to the rules allows employers to choose the fall protection system that is most effective for them and based on a variety of acceptable options, including the use of personal fall protection systems.

The agency has allowed the use of personal fall protection systems in construction since 1994, and the final rule adopts similar requirements for general industry.

The final rule also allows employers to:

  • Use rope descent systems up to 300 feet above a lower level.
  • Prohibit the use of body belts as part of a personal fall arrest system.
  • Require worker training on personal fall protection systems and other equipment designed for falls.


OSHA says it tried to align fall protection requirements for general industry “as much as possible” with its requirements for construction because many employers perform both types of activities.

The final rule for general industry updates requirements for ladders, stairs, dockboards, and fall and falling object protection.


Key provisions

Fall protection

An employer’s obligation to provide fall protection is triggered when employees work at least four feet above a lower level.

The final rule requires employers to select one or more of these options, depending on the particular situation or activity:

  • Guardrail system
  • Safety net system
  • Personal fall arrest system (body belts now prohibited)
  • Positioning system
  • Travel restraint system
  • Ladder safety system (does not include cages or wells)
  • Handrails
  • Designated areas (only permitted on low-slope roofs)


The rule establishes fall protection options and other requirements for some specific situations like hoist areas, runways, wall openings, repair pits, and stairways.


Ladder safety

The final rule sets out general ladder safety requirements applicable to fixed ladders, portable ladders, and mobile ladder stands and platforms.

Employers must ensure that:

  • Ladders are capable of supporting at least the maximum intended load, i.e., the total weight and force of anticipated employees and equipment or other materials.
  • Mobile ladder stands and platforms are capable of supporting four times the maximum intended load.


Ladders must be inspected before initial use during a work shift, and as necessary, to identify visible defects that could cause worker injuries.



Employers must ensure training of workers who use personal fall protection or work in dangerous circumstances, including working on loading docks. Workers must be trained by a “qualified person,” and the training must be understandable to employees and cover:

  • Identification of fall hazards.
  • Proper use of personal fall protection systems.
  • Maintenance, inspection, and storage of equipment or systems used for fall protection.


Employers must also ensure the retraining of workers when they have reason to believe workers lack the required comprehension and skill.

EEOC Eyes Employer Actions against Prescription Drug Users

By now you will be aware of the scourge of opioid abuse that’s swept the country over the past decade and the damage it is doing to individuals and families.

Overdoses from legal prescription drugs – mostly opioids and other strong pain relievers – last year surpassed overdoses from street drugs like heroin for the first time.

However, some employers are going too far in trying to prevent employees from taking certain medications while on the job and have as a result run afoul of the Equal Employment Opportunity Commission.

As you would enter an interactive process when trying to make accommodations for an employee’s disability, you must do the same if you have concerns about a worker taking prescription drugs for a medical condition.

Two recent lawsuits illustrate the issues that could spark action by the EEOC.


Refusing to hire after drug test

One case, filed in September 2016, concerns a woman who had her job offer by a casino rescinded after she had failed a pre-employment drug test. But the applicant was taking prescription medication for a back and neck impairment, which caused her to fail the test, the EEOC alleges.

Despite the applicant’s explanations and even offering to provide documentation, the casino still refused to hire her, according to the agency.

The EEOC alleges that the company violated the Americans with Disabilities Act (ADA) when refusing to hire the applicant, because she was taking lawful prescription drugs due to a disability.

The lawsuit also challenges the casino’s blanket policy requiring all employees, regardless of whether they work in safety-sensitive positions, to disclose their prescription or non-prescription drug use.


Fired for prescription drug use

The EEOC sued a medical center in Georgia for firing one of its doctors after learning that he was taking prescription narcotics to treat chronic pain for which he was undergoing treatment.

He was terminated despite offering to provide a letter from his own doctor explaining why he was taking the medication and receiving spinal injections. The medical center said he would be unable to perform his duties while taking the medications.

The EEOC alleges that the physician could have performed his job safely and competently, and that the medical center failed to enter into a dialogue with him, in violation of the ADA.


The takeaway

The Littler Mendelson law firm in a recent blog had the following tips for employers:

  • If you suspect someone is taking prescription narcotics that are affecting their performance, you can have a talk with them. If they have a prescription, you may need to enter into an interactive process with them to try to find ways to accommodate them under the ADA.
  • If they are taking pharmaceuticals for which they do not have a prescription, that is illegal drug use and you can impose discipline for violating your policy against illegal drug use.
  • You can still conduct pre-employment drug tests legally and regulate abuse of drugs in the workplace. But make sure that you account for the need to engage in an interactive process with individuals taking prescription medications and, if necessary, provide reasonable accommodations.
  • Avoid taking adverse actions when you have not gathered all of the facts.
  • You cannot have a policy that requires all employees to divulge the prescription medications they are taking. However, there are exceptions when public safety and the safety of other employees is concerned.

Pre-existing Conditions Weight Heavily on Workers’ Comp Claims

A multiple exposure illustrating the progressive rehabilitation of a patient recovering. He begins in a wheelchair, then walks with crutches and finally walks without assistance. It is shot against a black background with the legs blending from a sitting position to walking.

Your workers’ underlying health can greatly affect the amount of time they are off the job recovering from a workplace injury.

A new study has found that workers with pre-existing health issues like hypertension, obesity and mental health spend 60% more time recovering from workplace injuries than healthy workers. And because those injured workers are collecting wage-replacement indemnity benefits during that time, the cost of a claim increases in kind.

The findings illustrate the importance of trying to keep your workers healthy through wellness programs and access to health insurance.

The findings in the study of more than 7,000 workers’ compensation claims by Newport Beach, Ca.-based Harbor Health Systems found that in addition to increased claim duration, these underlying health issues affect the cost of claims, increase temporary total disability (TTD) days, recidivism (aggravating of the original injury), and lead to more litigation and surgery.


The study looked at seven “comorbidities”:

  • Obesity
  • Diabetes
  • Hypertension
  • Addiction
  • Mental health
  • Tobacco use and
  • Multiple comorbidities (one or more of the above)


Shocking outcomes

The results of the study were a confirmation that underlying health problems will worsen outcomes.

The two comorbidities that have the greatest impact are multiple comorbidities and obesity, followed by addiction, mental health and hypertension, with diabetes and tobacco having the lowest impact.

Relationships between comorbidities – such as the link between obesity and diabetes – can exacerbate complications and health risks. The age of the injured worker is another factor that is associated with comorbidities and can complicate the management of a claim.


Duration and cost

  • For claims involving multiple comorbidities, claim duration increased by 76%.
  • For claims involving addiction, duration increased 67%.
  • For claims involving obese individuals, duration increased 55%.
  • For claims with multiple comorbidities, total incurred costs increased 341%.
  • Claims in all the comorbidity groups had significantly higher TTD days compared to the control group.
  • TTD days increased by 285% for multiple comorbidities claims and 274% for addiction-related claims.



  • Litigation rates for claims with multiple comorbidities increased 147%.
  • Litigation rates for addiction-related claims increased 224%.
  • Litigation rates for mental health-related claims rose 248%.


The takeaway

Employers can encourage their employees to improve their health through company wellness plans and ensure that they have access to health insurance to treat their medical issues.

Claims management experts say that insurance company adjusters need to intervene early in cases where injured workers are saddled with these comorbidities.





Be Prepared for Changing ACA Landscape

Concept of problem in business

With president-elect Donald Trump and Congressional Republicans vowing to repeal the Affordable Care Act, employers that have spent the last few years preparing for and complying with the law have a right to be concerned about what’s in store.

While leaders in Congress have promised to swiftly put an end to the ACA, it’s not clear how fast it would happen, if at all, and what, if anything, would replace it.

Blue Cross/Blue Shield recently issued an alert about what its policy team had learned and is anticipating.


Administration moves

Blue Cross/Blue Shield noted that three executive actions could occur shortly after Trump is sworn into office:

  • His administration could order the Treasury Department and the IRS to stop enforcing penalties on taxpayers who do not enroll in health insurance.
  • The administration could stop defending lawsuits that challenge the legality of health insurance subsidies that are paid to insurers that insure low-income individuals who purchase coverage on public exchanges. If that happens, it could send shockwaves through the industry, financially affecting a number of insurance companies and leading to market disruptions, Blue Shield predicts.
  • The administration could prevent payments related to the transitional reinsurance program. Republicans have argued that payments from the program must go to the Treasury before health plans. The administration could redirect $5 billion owed to plans for the 2016 plan year, which would zero out payments that are expected in mid-2017.


Congressional action

Anything Congress will want to do in the near term will need bipartisan support because the minority-party Democrats could mount a filibuster in the Senate to keep any significant legislation from moving forward. However, Democrats’ hands would be tied if Republicans change the law during the budget reconciliation process.

Republicans could:

  • Move to repeal parts of the ACA that have implications for the federal budget, such as eliminating:
  • ACA tax credits
  • The Medicaid expansion
  • The individual and employer mandate penalties
  • Various ACA taxes used to pay for health reform.


That said, parts of the law that don’t affect the budget, like the ban on insurers from refusing coverage based on pre-existing conditions and dependent coverage to age 26, would need legislation.

  • Introduce legislation to kill the ACA and replace it with provisions they espouse, such as:
  • High-risk pools
  • Allowing individuals and businesses to buy insurance across state lines
  • Overhauling the Medicaid program.


For now though, the only thing employers can do is to watch what’s going on in Congress and follow developments with us. We’ll keep you posted on what’s happening.

Change could come suddenly, or it may be drawn out for years as repealing the law without a strong replacement would leave millions of Americans in a bind – and many of them would include the same people that voted for Trump as president and Republicans in Congress.



Measure Aims to Reduce Unnecessary Opioid Prescriptions

Pharmacist in pharmacy (Digital Composite)

Employers and insurers in California are enthusiastic about the prospects of legislation that aims to reduce the chances of injured workers getting hooked on opioids when they are recovering from workplace injuries.

Senate Bill 482, which is sailing the through the Legislature, would require doctors to first check the state’s prescription drug monitoring system before writing a prescription for opioids.

The bill is moving through the state Legislature after a new study found that doctors have been seriously curtailing the amount of opioid prescriptions they write to injured workers. The study found that stronger laws on prescription drug monitoring were likely a main reason for opioid prescriptions having waned during the study period.

SB 482 aims to further tackle the opioid scourge that has hit injured workers hard, leading to addictions that reduce the chances of them returning to their at-injury employer. California has already seen a decrease in the opioid prescriptions for injured workers, but if this legislation passes, it would strengthen safeguards even further.

SB 482, authored by Sen. Ricardo Lara, a Democrat from Bell Gardens, aims to force doctors to use the Controlled Substance and Utilization Review and Evaluation System (CURES) database.

Even though CURES is the oldest such system in the nation, legislators believe that few doctors consult it before writing prescriptions for opioids, which are highly addictive and are often associated with slower recovery periods for injured workers.

Under the measure, doctors authorized to prescribe, order, administer, furnish or dispense a controlled substance, would be required to check CURES no earlier than 24 before writing a prescription for a Schedule II, Schedule III or Schedule IV controlled substance for the first time – and at least annually thereafter.

Doctors who knowingly fail to check the database before writing a prescription would be referred to their licensing board for administrative sanctions.

The measure has already been passed by the State Senate and two committees in the Assembly (in unanimous votes) and looks like it will have a smooth ride on the Assembly floor thanks to amendments that were made in June.

Employers and insurers are encouraging passage of the bill.

The American Insurance Association says that CURES and other prescription drug monitoring programs have been shown to be effective in controlling the practice of “doctor shopping”, whereby patients will visit different doctors to obtain prescriptions for addictive medications. The association also said it will protect patients and improve outcomes.

Additionally, the California Chamber of Commerce says that SB 482 would discourage doctor shopping and identify the handful of physicians who write the majority of inappropriate prescriptions for opioids.


Addictive Medications

Schedule II: Substances that have a high potential for abuse which may lead to severe psychological or physical dependence.

Types: : Methadone, meperidine (brand name Demerol), oxycodone (brand names OxyContin, Percocet), fentanyl, morphine and high-strength codeine.

Schedule III: : Substances with a potential for abuse less than substances in Schedule II, and abuse of which may lead to moderate or low physical dependence or high psychological dependence.

Types: : Hydrocodone (brand name Vicodin), codeine (Tylenol with Codeine).

Schedule IV: Substances in this schedule have a lower potential for abuse than schedule III drugs.

Types: : Brand names Xanax, Soma and Valium.


The study

The study, released in June by the Workers’ Compensation Research Institute, found “significant” decreases in the amount of opioid prescriptions being written for injured workers.

Fourteen of the 25 states examined by the institute recorded decreases in opioid prescriptions of between 11% and 31% in the study period, which measured 24-month periods ending in March 2012 and March 2014.

Michigan saw the biggest drop (31%), followed by Oklahoma (29%) and Massachusetts (24%). Texas saw a drop of 19%; Connecticut, 17%; California, 12%; and Pennsylvania, 4%. Just four states saw increases.

The institute noted that the decreases coincided with various states enacting legislation aimed at reducing the abuse of opioids by improving prescription drug monitoring programs and adopting more stringent treatment guidelines and drug formularies.


Pharmacist in pharmacy (Digital Composite)

Pharmacist in pharmacy (Digital Composite)

Revisit Risk Response Plans in Light of Emerging Threats


There’s a lot going on in the world and the risks are changing and evolving rapidly, making it difficult for many companies to adjust and manage the risks they face effectively.

Some risks that barely registered a decade ago now pose serious challenges to many businesses. There are novel technological risks with new threats constantly arising in the cyber world, economic and market volatility, terrorism, regulatory and legal challenges, supply chain vulnerability and political uncertainty.

These risks can all be real for any business and it’s important that you and your manager sit down and try to identify the potential threats that could affect your operation, assess their likelihood and how your organization can reduce the effects of these events.

By understanding potential risks to your business and finding ways to minimize their impacts, you can ensure that your company recovers quickly after an incident.

Of course, risks vary from business to business and across industries, so there is no one-size-fits-all risk management plan. However, the methods for identifying risks and making a management plan are the same.

This guide outlines the steps involved in preparing a risk management plan and a business impact analysis for your organization.


Identifying risks

The first step in preparing a risk management plan is to identify potential risks to your business. This will help you develop appropriate strategies for dealing with them.

This stage requires thinking outside the box and not looking at the obvious.

  1. Think about your critical business activities, including your key services, resources and staff, and things that could affect them, such as power failures, terrorism, a cyber attack that incapacitates your network, natural disaster and illness.
  2. Brainstorm with staff from various parts of your organization – operations, accounting, legal, logistics and other sections – to identify as many potential risks as possible. Don’t leave anything on the table because it’s too outlandish.
  3. Review your business plan and think about what you couldn’t do without, and what type of incidents could affect these areas.
  4. This includes considering what you would you do if:
  • You lost power supply.
  • You had no access to the Internet.
  • Important documents were destroyed.
  • Your facilities were damaged or you were unable to access them.
  • A key supplier was unable to deliver product to you.
  • The area your business is in was hit by a natural disaster.
  1. Consider the worst-case scenario. This could be the result of several incidents occurring simultaneously or as part of a chain reaction. For example, your cold storage warehouse could lose power, which could cause perishables to spoil, which in turn could lead to your restaurant clients’ customers contacting food poisoning.


Formulating responses

Once you’ve identified risks for your business, you should assess the likelihood that they could occur.

A good strategy is to rank risks based on which ones would cause minor problems, through to major ones that would have to be tackled immediately. You should also try to figure out the likelihood of each of these risks occurring by looking at case studies of your industry.

You should correlate this with the damage each of the risks would do to your business should they occur.

With these factors in mind, you can rank the risks you should address first – and go down the list from there.


Risk management plans

You start by implementing strategies to reduce the chances of your top threats occurring in the first place. You can do this through:

  • Quality control processes
  • Auditing
  • Compliance with legislation
  • Staff training
  • Regular maintenance
  • Changing procedures


Next you should formulate responses that you can implement quickly after an incident, such as:

  • Emergency procedures
  • Off-site data backup and storage
  • Identifying alternate suppliers
  • Risk transfer, like outsourcing
  • Cross-training staff so that more than one person knows how to do a certain task
  • Keeping old equipment after it is replaced so you have backup, and practicing doing things manually in case your computer networks or other equipment can’t be used


Secure proper insurance

If you have concerns about any of the risks you have identified and are unsure whether your current insurance would cover them, you should call us.

Here are a few insurance solutions to common risks:

  • Coverage for the loss of income if customers affected by the crisis stop ordering your product or service
  • Coverage for loss of your customers’ goods or materials
  • Coverage to replace lost income if one of your suppliers is hit by a crisis and can’t deliver product to your firm


Republicans Unveil Two Proposals to Replace/Augment the ACA

Government Shutdown with magnifying glass. ++All text written by photographer. Image in page was taken by photographer ++

Republicans in June introduced two sweeping proposals for replacing or augmenting the Affordable Care Act, as they seek to blaze a trail they say will be better for both employers and individual Americans.

Rep. Pete Sessions, (R-Texas) and Sen. Bill Cassidy, (R-Louisiana), introduced H.R. 5284, which they call an “alternative” health care bill which will not repeal the ACA, but work alongside it and modify various parts of the system.

The so-called “Health Empowerment Liberty Plan” (HELP) includes conditions for helping Americans purchase health insurance, but also keeps in place ACA provisions that bar health insurers from discriminating against people with pre-existing medical conditions.

And later in June, a Republican task force convened by House Speaker Paul Ryan introduced a proposal that was not in bill form that would completely eliminate the ACA.



Here are the major provisions of the proposed HELP Act:

Individual mandate out – It would eliminate the individual mandate to be covered for insurance either through your job or by purchasing a health plan through a public insurance exchange.

Employer mandate out – It would eliminate the employer mandate, which is the requirement that employers with 50 or more full-time workers purchase affordable coverage for them.

Exchanges still okay – The bill would also allow states to decide if they want to opt in or out of the Affordable Care Act. States that elect to remain part of the ACA would be able to keep their marketplace exchanges and Medicaid expansion programs in place.

For states that decide to opt out, U.S. citizens, including Medicaid beneficiaries, would be eligible for a $2,500 per individual, $1,500 per child tax credit, to be used towards the cost of employer-sponsored health insurance, invested in a Roth Health Savings Account or received as an annual payment.

New tax – The HELP Act would limit the tax exclusion for employer health plans to $2,500 per employee, exposing companies and workers to taxes for insurance benefits above that threshold.

Oddly, Republicans have heavily criticized the ACA’s “Cadillac tax,” which seeks to tax at 40% the portion of any employer-provided health plan that costs more than $10,200 a year.

Small employer purchasing power – The measure would also allow small employers to band together to purchase health insurance. Small employers should be able to “offer health care coverage at lower prices through improved bargaining power at the negotiating table with insurers just as corporations and labor unions do,” according to the proposal.

Minimum essential benefits out – The bill would abolish federal minimum essential benefits – a hallmark of the ACA – though it would allow states to regulate coverage.

People could buy cheaper limited-benefit plans with an annual cap on benefits. Those who buy such plans would receive asset and wage protection if their medical bills exceeded certain thresholds.

Competition and transparency – It would also limit how much insurers could charge for out-of-network services, require providers and plans to disclose prices, and deregulate physician-owned facilities, freestanding surgery centers, and retail clinics.


The task force proposal

The health care reform proposal released by the House Republican task force convened by Speaker Ryan would entail a full repeal of the ACA.

The proposal, which is broad in scope and short on specifics, would include a transition period out of the ACA and into a new plan. It would eliminate the individual and employer mandate and instead encourage people to have insurance coverage with the help of refundable tax credits that would be adjusted for the recipient’s age.

It would encourage small group health plans and provide $25 billion in incentives to states to set up high-risk insurance pools.

In place of the ACA’s individual mandate, the plan would prohibit insurance companies from denying patients coverage or charging them more because of pre-existing conditions – but only if they keep continuous insurance coverage, although they could switch plans or carriers.

It would also allow young adults to stay on their parents’ health plans until age 26, which is one of the most popular pieces of the ACA.

Under the proposal, insurers would be allowed to sell across state lines and medical liability laws would be reformed.


Government Shutdown with magnifying glass. ++All text written by photographer. Image in page was taken by photographer ++

Government Shutdown with magnifying glass. ++All text written by photographer. Image in page was taken by photographer ++

OSHA Sets Limits on Drug Testing Injured Workers

drug test

Employers are not allowed to have a blanket policy of requiring drug and alcohol tests after a workplace injury as it may discourage injury reporting, the U.S. Occupational Safety and Health Administration has said in an interpretation letter.

It issued the letter in response to a company’s blanket policy after some intoxicated workers had been injured on the job, and it comes as a new OSHA regulation on post-injury testing is slated to take effect at the start of 2017.

These recent actions should spur any employer with a policy of testing its workers post-accident to revisit its rules so they don’t run afoul of OSHA’s regulations.

OSHA’s “Improve Tracking of Workplace Injuries and Illnesses” rule does not bar employers from drug or alcohol testing its workers, but it does prohibit companies from using such testing or the threat of it as a form of retaliation against employees who report injuries. These new rules were published in May 2016 and will take effect on Jan. 1, 2017.

However, the rules specifically point out that if an employer conducts drug testing to comply with the requirements of a state or federal law or regulation, the employer’s motive would not be retaliatory and this rule would not prohibit such testing.

With this new rule the agency is likely to take a hard stance on mandatory post-injury drug testing without a compelling reason.

It is unclear what will happen to employers who enforce post-incident testing policies that OSHA deems unreasonable, although several experts say they expect the agency will attempt to cite employers.

The rule will likely have far-reaching effects considering that 56% of U.S. manufacturers had such policies, according to a 2012 study by the Government Accountability Office. That same study found that these policies “may discourage workers from reporting injuries and illnesses.”

OSHA says in the rule that employer policies should limit post-incident testing to situations in which employee drug use is likely to have contributed to the incident and for which the test can accurately identify impairment caused by drug use, according to the final rule.

Examples of instances that OSHA says would not be reasonable to conduct a drug test include:

  • An employee who reports a bee sting.
  • A repetitive strain injury.
  • An injury caused by a lack of machine guarding, or by a machine or tool malfunction.


Under the rule, employers do not have to specifically suspect drug and/or alcohol use before testing, but there should be a reasonable possibility that such use by the reporting employee contributed to the reported injury or illness for the employer to mandate the testing.

The probable cause for a drug test would need to be based on observation and a good-faith belief that an employee is under the influence of drugs or alcohol. Such observations should be made by two people trained to spot such impairments and should be documented in writing

Employment law attorneys recommend that all employers look at their current policy for post-injury drug and alcohol testing, how that policy is communicated to employees, and what kind of feedback they had when the policy was put into place.