Administration At Odds: Why OSHA Standards May Be Impractical for Construction Workers Compensated on a Piece Rate Basis

Blog Post | 113 KY. L. J. ONLINE | November 7, 2024

Administration At Odds: Why OSHA Standards May Be Impractical for Construction Workers Compensated on a Piece Rate Basis

By: Hector Gagnet, Staff Editor, Vol. 113 

 Piece rate compensation is a common pay system in the manufacturing, agriculture, home services, and construction industries.[1] In the construction context it means that workers are paid by units handled rather than hours worked. For example, a drywall hanger would be paid for every board of drywall they hang, or a roofer for every roll of tar paper they put down.[2] While piece rate compensation is widely held to increase efficiency,[3] it prompts construction workers to disregard Occupational Safety and Health Administration (OSHA) standards in order to be more productive and achieve their desired income.  

There is an unequivocal correlation between piece rate compensation and unsafe work practices. Piece rate pay encourages behavior that carries an increased risk of accidents and injuries.[4] When workers are confronted with the option of economic gain or the possibility of being injured, “[t]he common choice is to accept the prevailing health risk.”[5] Consequently, piece rate workers exhibit poorer health conditions than those paid on a time basis.[6] 

OSHA standards have little impact on construction workers choosing economic gain over potential injury. In Tim Graboski Roofing, Inc., the Occupational Safety and Health Review Commission assessed fines to the employer for failing to assure that their workers used proper fall protection.[7] While being questioned by the compliance safety and health officer (CSHO) conducting the inspection, the crew chief stated that workers did not wear fall protection because they believed that it slowed them down.[8] The company’s safety supervisor stated to the CSHO that he believed this behavior to be a result of their piece rate pay system.[9] Similar violations—where piece rate construction workers choose to not to follow OSHA standards—are commonplace.[10] In spite of this, there is scanty guidance from OSHA on the issue.

The question of whether the Secretary of Labor (the Secretary) could adopt an OSHA standard to address piece rate related safety disregard may hinge on their ability to devise an economically feasible solution. There is empirical support for the notion that this issue constitutes an occupational hazard for which a new OSHA standard is “reasonably necessary or appropriate” to address.[11] The technological feasibility hurdle is low because, theoretically, a new standard would not require anything more demanding than an innovative plan to incentivize safe work practices or disincentivize unsafe work practices in piece rate settings.[12]

Implementing a standard that adequately protects the efficiency which many construction employers depend upon piece rate compensation to drive, however, does not seem possible. To demonstrate economic efficiency, the Secretary must show that a standard “will not threaten the existence or competitive structure of an industry.”[13] Efficiency is critical to competitiveness in the construction business.[14] If a proposed standard were proven to undermine employers’ ability to promote efficiency with piece rate compensation, it would likely fail.[15] When OSHA standards themselves are held by piece rate workers to slow productivity, it is difficult to imagine a regulatory system under which those standards are closely followed and the efficiency provided by piece rate compensation remains largely intact.

Also at issue are the dueling interests of OSHA in assuring the safety of workers and the Department of Labor (DOL) in protecting workers’ income.[16] If piece rate workers’ productivity is hindered by OSHA standards, the Secretary would have to compromise the DOL’s mission to force workers’ hands in following them.[17] Conversely, to serve the DOL’s mission the Secretary would have to compromise OSHA’s mission by turning a blind eye to the workers’ culture of violating the standards.[18] Put simply, even if it were tenable, deciding whether to adopt a standard addressing piece rate related safety disregard would require the Secretary to choose between an interest at the heart of OSHA’s mission and one at the heart of the DOL’s concomitant mission 

This is to say that while piece rate compensation entails significant hazards for construction workers, it is possible that the task of directly addressing this issue is too complex for OSHA to undertake. In the statutory scheme only employers can be charged with a violation.[19] While increasing enforcement against employers could increase compliance, it is unrealistic to think that it would have a significant impact.[20] Indeed, in many instances employers themselves are culprits of choosing economic gain over safety.[21] This topic warrants a substantial amount of analysis, but taken from the information presented here the reality may be that OSHA standards are impractical for construction workers compensated on a piece rate basis.

[1] What is Piece Rate Compensation?, Walker L.: Emp. L. (Dec. 1, 2016), https://walkerlawsd.com/what-is-piece-rate-compensation/.

[2] See Piece Rate Compensation, Arin James LLP, https://arinjames.com/practice-area/piece-rate-compensation/ (last visited Oct. 27, 2024).

[3] What is Piece Rate Pay? A Guide For Employers, The Lore L. Firm, https://www.overtime-flsa.com/blog/what-is-piece-rate-pay-a-guide-for-employees/ (last visited Oct. 27, 2024); see Tim Graboski Roofing, Inc., 25 OSHC (BNA) 1539 (2015).

[4] Bo Johansson, Kjell Rask & Magnus Stenberg, Piece Rates and Their Effects on Health and Safety–A Literature Review, 41 Applied Ergonomics 607, 608–09 (2010); Kyung Yong Rhee, Young Sun Kim & Yoon Ho Cho, The Type of Payment and Working Conditions, 4 Safety & Health Work 289, 295 (2015).

[5] Johansson, Rask & Stenberg, supra note 4; Rhee, Kim & Cho, supra note 4.

[6] Johansson, Rask & Stenberg, supra note 4; Rhee, Kim & Cho, supra note 4.

[7] Tim Graboski Roofing, Inc., 2015 OSAHRC LEXIS 29 (2015).

[8] Id.

[9] Id.

[10] See, e.g., B-G Maint. Mgmt. 1976 OSAHRC 487 (1976) (stating that window washers working on an incentive basis did not use required safety equipment because they felt that it would slow them down); see, e.g., Daniel Int’l Corp., 1981 OSAHRC LEXIS 242 1980 (1981) (stating that ironworkers avoided tying off their safety belts while working on a roof because they had an incentive to complete the task as quickly as possible).

[11] 29 U.S.C. § 652; Johansson, Rask & Stenberg, supra note 4; Rhee, Kim & Cho, supra note 4; cf. Nat’l Fed’n of Indep. Bus. v. DOL, OSHA, 595 U.S. 109, 119 (2022) (stating that “risks associated with working in [a] particularly crowded or cramped environment” during the COVID-19 pandemic constituted an occupational hazard which OSHA could regulate).

[12] “A standard is technologically feasible when the protective measures it requires already exist, when available technology can bring the protective measures into existence, or when that technology is reasonably likely to develop.” Heat and Illness Prevention in Outdoor and Indoor Work Settings, 89 Fed. Reg. 70698 (proposed Aug. 30, 2024) (to be codified at 29 C.F.R. pt. 1910) (citing American Iron & Steel Inst. v. OSHA, 939 F.2d 975, 980 (D.C. Cir. 1991)) [hereinafter Heat and Illness Prevention Proposal]; see id. at 432 (“To ensure piece rate employees are not discouraged from taking rest breaks, the proposed standard would require employers to compensate them at their normal rate of pay for time necessary for rest breaks.”).

[13] UWS v. Marshall, 647 F.2d 1189, 1272 (D.C. Cir. 1980).

[14] 15 Steps for Improving Operational Efficiency in Construction Businesses, Cultivate Advisors (Nov. 3, 2023), https://cultivateadvisors.com/blog/ways-to-improve-operational-efficiency-construction-business/ (“Improving construction site efficiency in an industry with tight budgets and deadlines will give your company an edge over its competition and increase profits.”).

[15] See id.; What is Piece Rate Pay?, supra note 3; Marshall, 647 F.2d at 1272.

[16] See About OSHA, Occupational Safety & Health Admin., https://www.osha.gov/aboutosha (last visited Oct. 28, 2024); About Us, U.S. Dep’t of Lab., https://www.dol.gov/general/aboutdol#:~:text=Our%20Mission,work%2Drelated%20benefits%20and%20rights. (last visited Oct. 28, 2024).

[17] The general tendency of Secretaries of Labor when seeking to adopt a new OSHA standard is to do such with a careful regard for the DOL’s mission to protect workers wages. See Heat and Illness Prevention Proposal, supra note 11 at 432; Marshall, 647 F.2d at 1317 (upholding a standard for lead exposure that implemented a “Medical Removal Protection system” for employees exceeding safe exposure limits and required full payment of wages for removed employees).

[18] Graboski, supra note 7; Daniel Int’l Corp., supra note 9; B-G Maint. Mgmt., supra note 9.

[19] United States v. Doig, 950 F.2d 411, 415 (7th Cir. 1991).

[20] Compare 2022 Enforcement Summary, Occupational Safety & Health Admin., https://www.osha.gov/enforcement/2022-enforcement-summary (last visited Oct. 28, 2024) (stating that the total number of OSHA inspections increased from 24,333 in 2021 to 31,820 in 2022), with A Look at Falls, Slips, and Trips in the Construction Industry, U.S. Bureau of Lab. Stat.: The Econ. Daily (May 6, 2024), https://www.bls.gov/opub/ted/2024/a-look-at-falls-slips-and-trips-in-the-construction-industry.htm (stating that the number of fatal injuries in the construction industry rose from 1,015 in 2021 to 1,092 in 2022), and Fatal Work Injuries Up in 2022, U.S. Bureau of Lab. Stat.: The Econ. Daily (Dec. 29, 2023), https://www.bls.gov/opub/ted/2023/fatal-work-injuries-up-in-2022.htm (stating that the total number of fatal work injuries in the United States increased from 5,190 in 2021 to 5,486 in 2022).

[21] Graboski, supra note 7 (stating that the employer “made a business decision” not to enforce safety standards to maintain productivity); E. Smalis Painting Co., 2009 OSAHRC LEXIS 13 (2009) (finding that the employer emphasized “productivity over employee safety”); Falcon Steel Co. 1993 OSAHRC 73 (1993) (stating that the owner “focus[ed] on cost rather than safety”).