As required by the Regulatory Flexibility Act (as amended in 1996), this chapter of the analysis measures the potential economic impacts of the proposed ergonomics program standard to determine whether the standard may have a significant impact on a substantial number of small entities. The analysis presented in this chapter builds on the analysis of economic impacts developed in the Economic Feasibility chapter (Chapter VI) of this Preliminary Economic Analysis.

Although the goal of this chapter is to estimate impacts on small firms, some of the data relevant to such an analysis are available only for the establishment, not the firm as a whole. OSHA has, however, used estimates provided by SBA of the number of small firms in affected industries, and has used SBA-provided data to determine average revenues per firm. Costs were estimated on a per-establishment basis rather than per-firm basis, and were converted to a per-firm basis by multiplying costs per establishments times the number of establishments owned by the average firm in a given size class.

The Regulatory Flexibility Act requires OSHA to analyze the potential impacts of proposed and final rules using the size criteria developed by the Small Business Administration (SBA) for U. S. industries. The SBA small business size criteria are industry-specific, and are usually based on the number of employees employed by a firm. In some cases, however, the SBA expresses the small size threshold for a particular industry in terms of annual sales or other measures. In this chapter, OSHA analyzes potential impacts on small firms as defined by the SBA, and on very small firms (those having fewer than 20 employees). In addition, OSHA's small business analysis evaluates the potential impacts of the standard on affected firms (defined as those that are projected, over the 10-year time horizon of this analysis, to have at least one employee with a covered MSD and not to have an ergonomics program in place at the time the MSD occurs).

Potential Impacts on Small Firms, as Defined By the SBA Size Criteria

Using the SBA industry-specific size criteria, OSHA analyzed the impacts of the standard on SBA-defined small firms. Table VII-1 presents the results of this analysis. It shows annualized costs, revenues, profits as a percentage of revenues, and profits in dollar terms, for these establishments. Table VII-1 also presents the impacts of the annualized costs of the standard under two worst-case scenarios: as a percentage of revenues (the full cost passthrough scenario), and as a percentage of profits (the no cost passthrough scenario). The average cost imposed by the standard on small firms in each industry, as well as average revenues and average profits for small firms, as defined by the SBA, are also presented in this table.

SBA-defined small businesses are projected to incur annualized compliance costs of $2.7 billion, or 64 percent of all compliance costs. These firms annually generate $7.0 trillion in revenues, or 44 percent of the revenues generated by all firms covered by the rule.

The potential impacts of the standard, under the full cost passthrough scenario, are small across the covered industries, constituting only 0.05 percent of the revenues of these small firms. No industry sector has impacts over 1 percent of revenues. Under the worst-case no cost passthrough scenario, the standard's potential impacts on average industry profits are also small, constituting 1.48 percent of profits overall. Compliance costs exceed 5 percent of profits in 12 industry groups and 10 percent in one industry (SIC 561, Men's and boy's clothing stores). In no industries were costs estimated to exceed 20 percent of profits.

As Table VII-1 shows, the typical SBA-defined small business, which has a worst-case revenue impact of 0.05 percent, will have little economic difficulty complying with the standard. Men's and boys' clothing stores, SIC 561, with costs imposing impacts reaching 19.8 percent of profits, stands out as an anomaly, because its reported profit rate for 1996 (0.1%) is lower than that for any other industry by a factor of 5, and lower than the profit rate for the average industry by a factor of approximately 50. By way of comparison, costs as a percent of revenues in SIC 561 are estimated to be 0.02 percent, below the industry average. Profit rates are more volatile than total revenues as a general rule and a review of several years of profit data (1994-1998) for SIC 561 indicates that this industry's profit rates in all surrounding years were greater by a order of magnitude than those reported for (RMA, 1998).

Potential Impacts on Affected Firms Defined as Small by the SBA

This section analyzes the available data to identify potential impacts on those SBA-defined small firms that are in the affected groups. OSHA defines these firms as those without an ergonomics program but with a job that will cause or contribute to a covered MSD in the next 10 years. Table VII-2 summarizes the data for this group of firms. OSHA estimates that a total of 1.5 million establishments owned by in 1.2 million firms, or 97 percent of all establishment covered by the proposal, will fall into the affected SBA-defined small business group over the next 10 years.

Table VII-2 shows, not surprisingly, larger potential impacts on these affected firms than on those represented in Table VII-1. Nevertheless, the average estimated impacts across all affected firms are only 0.23 percent of revenues. Under the worst-case no cost passthrough scenario, compliance costs as a percentage of revenues exceed 1 percent only in three industries: SIC 920, Fish hatcheries; SIC 5310, Department Stores; and SIC 6020, Commercial banks.

Table VII-2 also shows impacts on these firms as a percentage of profits. On average, SBA-defined affected small firms are projected, under the worst-case no cost passthrough scenario, to experience declines in profits averaging 6.7 percent. However, 18 of the 342 industry groups are projected to have worst-case impacts that exceed 20 percent of profits.

Based on this analysis and the data presented in Tables VII-1 and VII-2, OSHA concludes preliminarily that the viability of the small entities potentially affected by the proposed standard is not threatened by the compliance costs of the standard. The average affected small business would experience a maximum decline of 6.67 percent of profits and a maximum price increase of 0.23 percent. However, because the more serious impacts are concentrated in 18 industries, OSHA has further analyzed the data available for those industries (Table VII-3). As this table shows, for all but one of these industries, the maximum (worst-case no cost passthrough scenario) impact on profits ranges from 20 to 41 percent. The table also shows that firms in these industries, with the exception of Men's and boys' clothing stores, would continue to generate profits, even with these worst-case declines in profits. In all cases costs are less than 1.5 percent of revenues.

The worst case impact on revenues (full cost pass-through), with no impact on profits, will occur only if demand is completely inelastic. Such a situation, as pointed out by the SERs who participated in the SBREFA Panel process (Ex. 23), is unlikely. For an individual firm, such a situation can occur only when demand is inelastic and all firms in the industry incur the same increase in costs. This is the case because, if an individual firm could raise the price for its goods or services without incurring any decline in profits, it would presumably already have done so. However, the other worst-case situation (no cost passthrough) in which all costs must be absorbed from profits, is also very unlikely. It can occur only in industries in which there is intense international competition, products are homogeneous and, as a result, prices cannot be altered. This worst-case situation occurs only for such homogeneous products with international markets as some farm crops, bulk chemicals, and metal ingots. For most products and services, the combination of product differentiation and local markets means that most firms have at least some ability to increase prices and will only experience moderate losses in sales if they do so, rather than the total loss of sales assumed to occur under the maximum impact on profits (no cost passthrough) scenario.

In response to the SER comments, OSHA looked at the impacts that would occur if impacted firms could partially pass through the costs of compliance; several price elasticities were used for this analysis. In the partial cost passthrough case, prices are increased by an amount equal to the worst case price increase, and demand for the goods and services falls. The extent of the fall in demand is determined by the price elasticity of the good or service. Price elasticity is defined as the percentage change in the quantity of goods or services sold divided by the percentage change in the price of the goods or services. Under the worst case price impact scenario, the price elasticity was assumed to be 0, i.e., a one percent increase in price would have no effect on the quantity of the good or service sold. For the worst case profit impact scenario (the no cost passthrough situation), price elasticity was assumed to be infinite, i.e., a one percent change in price would eliminate all sales of goods and services. These are clearly extreme cases. OSHA has therefore also examined intermediate cases for price elasticities ranging from 0.5 (sales fall 0.5 percent when there is a 1 percent increase in price) to 5.0 (sales fall 5 percent when there is a 1 percent increase in price). The results of this analysis are shown in Table VII-3. As can be seen from this table, assuming that some of the costs of compliance can be passed through to consumers lowers the potential impacts of the costs of compliance on profits to less than 7% for firms in all of the most severely impacted industries, and lowers these impacts on profits in all but two of the most severely impacted industries to less than 5%.

The one industry with worst-case profit impacts of greater than 50% -- Men's and boy's clothing stores, SIC 561 -- has, as discussed above, worst-case profits that are a factor of 5 lower than those for any of the other 342 industries analyzed. Further, OSHA believes that the data for this industry for this year are anomalous, because an examination of the profits of SIC 561 establishments for the years 1994-1998 shows that profits were in the average range for this industry in all years except 1996.

Potential Economic Impacts on Very Small Businesses

OSHA has also examined the potential impacts, under both worst-case scenarios, of the compliance costs of the standard on very small businesses (those with fewer than 20 employees). Table VII-4 shows the results of this analysis. Firms with 1-19 employees were estimated to incur compliance costs of $680 million, or about 16 percent of all compliance costs. The potential impacts of the proposed standard on very small firms average only 0.06 percent of revenues overall, and they do not exceed 1 percent of revenues in any industry group.

Table VII-4 also shows that the impact of the proposed standard, even under the worst-case no cost passthrough scenario, averages only 1.80 percent of profits. For 16 industry groups, maximum profit impacts exceed 5 percent of profits, but they reach 20 percent of profits only in SIC 561, Men's and boy's clothing stores which, as described above, has extremely low profit margins (0.1 percent, or $358 per year, for very small stores).

Thus, the standard's projected impacts, even in the worst-case, will not jeopardize the viability of these very small businesses.

Potential Economic Impacts on Affected Very Small Firms

Very small affected establishments are those without an ergonomics program, with fewer than 20 employees, and whose employees will experience at least one covered MSD in the next 10 years. Thus these firmss are truly the most impacted of all businesses covered by the standard. Table VII-5 shows that a total of 896,908 very small businesses are in the affected small business category (about 74 percent of the small firms identified as affected using the SBA size criteria (see Table VII-2)).

For these very small affected businesses under the worst-case full cost passthrough scenario, overall compliance cost impacts average 0.24 percent of revenues. There are no industries where worst-case impacts would exceed 1 percent of revenues. Affected very small businesses, which represent the potentially most impacted of all businesses covered by the standard, show profit impacts averaging 7 percent under the worst-case no cost passthrough scenario. Thus, even for the most heavily impacted firms -- those whose employees will have a covered MSD, who have no ergonomics program in place, and who have only 1-19 employees -- average estimated compliance costs would, in the worst case, have profit impacts of 7.0 percent and price impacts of 0.24 percent. Affected small firms in 50% of covered industry groups potentially have worst-case profit impacts exceeding 5 percent and, in 11 industry groups, these maximum impacts exceed 20 percent of profits.

To determine what factors might account for these worst-case effects, OSHA examined the characteristics of firms in these industries (see Table VII-6). As this table shows, 10 of these industry groups show worst-case impacts of 20%-50%, but would, even if no cost passthrough is possible, still retain substantial profits. Only one industry shown in Table VII-6, Men's and boy's clothing stores (SIC 561), would have worst-case impacts on profits of greater than 100 percent under the worse case no cost passthrough scenario. However, as discussed previously, OSHA believes that the results in this industry are anomalous. The data reported for this industry are inconsistent with those for other very small firms in the industry groups analyzed by OSHA. In SIC 561, Men's and boy's clothing stores, annual reported profits are $358, or a factor of 5 below those reported for any of the other industries. Thus, the profits for businesses in SIC 561 are lower by far than is the case for any other industry.

In response to the SERs' comments (Ex. 23), Table VII-6 also analyzes the impacts of compliance costs under the more likely scenario of partial cost passthrough, i.e., situations where the price elasticity ranges from 0.5 to 5.0. In all of the most severely impacted industries, the impacts on profits under the partial cost passthrough scenarios are, at worst, less than 5%.

Summary of Economic Impacts

OSHA's analysis of small business impacts has looked at the potential impacts of the proposed ergonomics program standard on small firms in several size-classes under two mutually exclusive worst case scenarios: no cost passthrough and full cost passthrough. These size classes of small business included: those defined as small by the Small Business Administration; those with 1-19 employees; affected firms as defined by the SBA size criteria; and affected firms with 1-19 employees. For the purposes of this preliminary economic analysis, affected firms are those without ergonomics programs but with ergonomic hazards that are projected to cause a covered MSD in the next 10 years. OSHA's analysis shows that these firms -- those that have not yet begun to address their ergonomic hazards -- are more impacted than other firms in their industries.

The analysis has identified significant impacts on a substantial number of small businesses, defined, for regulatory flexibility purposes, as impacts exceeding 1 percent of revenues or 5 percent of profits (OSHA, 1997). Accordingly, OSHA has conducted an Initial Regulatory Flexibility Analysis to identify alternatives to the proposed rule that may mitigate these impacts while still achieving the worker protection goals of the Occupational Safety and Health Act.

Initial Regulatory Flexibility Analysis

The Regulatory Flexibility Act, as amended in 1996, requires that an Initial Regulatory Flexibility Analysis (IRFA) contain the following elements:

1) a description of the reasons why action by the Agency is being considered;

2) a succinct statement of the objectives of, and legal basis for, the proposed rule;

3) a description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply;

4) a description of the projected reporting, recordkeeping and other compliance requirements of the proposed rule, including an estimate of the classes of small entities that will be subject to the requirements and the type of professional skills necessary for preparation of the report or record; and

5) an identification, to the extent practicable, of all relevant Federal rules that may duplicate, overlap or conflict with the proposed rule.

In addition, a Regulatory Flexibility Analysis must contain a description of any significant alternatives to the proposed rule that accomplish the stated objectives of the applicable statute (in this case the OSH Act) and that minimize any significant economic impact of the proposed rule on small entities.⁽¹⁾

1. Description of the Reasons for Agency Action

OSHA has determined that it is appropriate to propose an ergonomics program standard to ensure that general industry employers whose employees have experienced an MSD covered by the standard are afforded the protection provided by the quick fix option or the full ergonomics program. Employers are required by the full program to perform a job hazard analysis of the job and to implement controls that are reasonably anticipated to eliminate or materially reduce the risk factors giving rise to the ergonomics injury or illness.

Musculoskeletal disorders have continued to occur in the workplace in large numbers: in 1996, 647,000 lost workday MSDs were reported by employers to the Bureau of Labor Statistics, and OSHA estimates that the number of non-lost workday MSDs (i.e., restricted work MSDs and non-lost workday MSDs) occurring in the same year brings this total to about 1.8 million MSDs in that year.

OSHA establishes that workplace risk factors pose a significant risk of material impairment of health or functional capacity to workers in general industries in Sections VI and VII of the preamble, the Preliminary Risk Assessment and Significance of Risk sections, respectively. The OSH Act, as explained below, requires OSHA to act when the risk of harm posed to workers is significant and feasible means of reducing that risk exist. As demonstrated in Chapter III (Technological Feasibility) of the economic analysis, employers have many choices of controls available to address these risks. Further, because the standard allows employers to choose among several control approaches - - engineering, work practice, or administrative controls - - employers will have an even larger range of control choices. Thus, OSHA is considering regulatory action because workers in the industries covered by the rule are at significant risk of material health impairment and feasible methods of reducing this risk substantially are available.

2. Legal Basis and Objectives of the Proposed Rule

OSHA's authority to issue an ergonomics program standard derives from sections 2(b), 6(b)(5), 8(c)(1), and 8(g)(2) of the OSH Act. The objective of the proposed rule is to reduce the risk of occupational musculoskeletal disorders in exposed working populations through the use of an ergonomics program that includes management leadership and employee participation, hazard identification and reporting, job hazard control and analysis, training, MSD management, and program evaluation. Implementation of ergonomics programs incorporating these elements has been shown to substantially reduce the risk of MSDs among workers.

In developing the proposed standard, OSHA will be guided by eight principles: (1) the proposed standard should focus on operations where the risk of MSDs is the greatest and solutions are known; (2) it should maximize worker protection and cost-effectiveness; (3) it should include those program elements that best practices have shown to be effective; (4) it should be written in plain language; (5) it should recognize the unique needs of small businesses; (6) it should be performance-oriented and flexible; (7) it should recognize employers who already have effective ergonomics programs; and (8) it should include a tiered approach that does not require employers whose establishments do not have problem jobs to implement a full program.

OSHA standards must also be supported by substantial evidence in the record as a whole. OSHA has collected and analyzed thousands of scientific studies and articles on MSDs, successful interventions to control them, and ergonomic programs. Other government agencies have also found such programs to be effective. In August of 1997, for example, the Government Accounting Office (GAO) issued a report of its investigation of ergonomics programs. The GAO report, "Private Sector Ergonomics Programs Yield Results," is a detailed review of the ergonomics programs of five major corporations that shows that these companies have implemented programs that successfully address serious ergonomic problems (Ex. 26-5). A NIOSH publication entitled "Elements of Ergonomics Program" (1998) also identified the elements included in the program envisioned by the proposed standard as essential to program success (Ex. 26-2).

NIOSH (1997) also recently published a critical review of the large body of epidemiologic evidence on work-related MSDs and exposure to workplace risk factors. NIOSH identified more than 2,000 studies for this project and conducted a detailed review of over 600 of those studies (Ex. 26-1). NIOSH found that, for most combinations of MSDs and risk factors, the human evidence for causality was either sufficient or strong. NIOSH found the evidence convincing based on the strength of the associations, the lack of ambiguity in temporal relationships from projected studies, the consistency of the results of these studies, and these studies' use of adequate controls or adjustment for likely confounders. Similarly, a recent (1998) National Research Council (NRC) panel of 66 scientists considered the evidence for the work-relatedness of musculoskeletal disorders. The most significant finding of the NRC report concerned the work-relatedness of MSDs: "there is a higher incidence of reported pain, injury, loss of work, and disability among individuals who are employed in occupations where there is a high level of exposure to physical loading than for those employed in occupations with lower levels of exposure." (Ex. 26-37)

3. Description of the Number of Small Entities

Determining the number of small entities falling within the scope of various provisions of the proposed standard at any given time is complicated, because all small entities in general industry are potentially affected by the rule in the sense that if a covered MSD occurs, the establishment will have at least to determine if the MSD is covered by the standard. (For the purpose of this economic analysis, a covered MSD is one that meets the criteria for an OSHA recordable injury or illness and additionally meets the screening criteria in section 1910.902.) The first step in the description of affected small entities for this IRFA is therefore to determine the number of small entities in general industry. However, in a typical year, most small entities will not in fact be within the scope of the standard, because only those small entities that have employees engaged in manual handling or manufacturing operations, or whose employee(s) experience a covered MSD, will be covered by the standard. Further, only establishments whose employee(s) experience a covered MSD will need to have a full program. Thus, to be within the scope of the standard, a small entity must have employees: (1) engaged in manufacturing operations; (2) engaged in manual handling operations, or (3) who have experienced a covered MSD.

This analysis has been carried out in terms of small establishments rather than small entities. This was necessary because of the complexity of the probability calculation involving small entities owning multiple establishments. As a result, this economic analysis tends to overestimate the number of affected small entities, because some small establishments are owned by large entities. OSHA estimates that there are 5.8 million small establishments in general industry potentially affected by the rule. Of these, an estimated 1.45 million small establishments would be required by the proposed standard to maintain a basic ergonomics program at all times because they have employees engaged in manual handling or manufacturing operations. Over the course of 10 years, 1.5 million small establishments would need to initiate a full program at least once because an employee in the establishment had a covered MSD.

The proposed standard potentially covers an estimated 5.1 million very small entities (i.e., those employing fewer than 20 employees). Of these, OSHA estimates that 1.27 million very small entities would be required to maintain a basic ergonomics program at all times. Over the course of 10 years, 1.1 million very small establishments would need to initiate a full program at least once because an employee in the establishment had a covered MSD.

4. Description of Proposed Reporting, Recordkeeping and Other Compliance Requirements

Compliance Requirements

There is widespread agreement that successful ergonomics programs include the following elements in some form:

• Management leadership and employee participation

• Hazard information and reporting

• MSD management

• Job hazard analysis and control

• Training

• Program evaluation.

OSHA is proposing a tiered approach to program implementation in this standard. This would mean that general industry establishments with a somewhat lower probability of incurring a covered MSD (i.e., general industry establishments that do not engage in manual handling or manufacturing operations) would not be required to take action until an MSD has occurred. Moreover, further action would only be triggered if the MSD is determined by the employer to be one that is recordable under the OSHA recordkeeping standard, and, in addition, is determined by the employer to be a covered MSD. Establishments with a higher probability of incurring a covered MSD, i.e., those whose employees engage in manufacturing operations or manual handling, would be required to implement a basic ergonomics program that emphasizes employer leadership and employee participation and hazard information and reporting, even in the absence of a covered MSD.

If no covered MSD occurs for three years in a job that has been controlled under the program required by the standard, the establishment is permitted by the proposed standard to drop back to the lesser program for that job (if the establishment had employees who were engaged in manufacturing or manual handling operations) or to a program consisting essentially only of maintaining the controls in the problem job and any associated employee training (if the establishment did not have employees engaged in manufacturing operations or manual handling).

The basic program includes those elements listed above that are appropriate to workplaces where covered MSDs and problem jobs have not yet been identified. The proposed standard includes the following elements in the basic program:

• Management leadership, including allocation of resources, information and training for responsible managers or supervisors, and assignment of program responsibilities;

• Establishment of an employee reporting system and protection against discrimination for employees participating in the program or reporting hazards;

• Providing employees with the information they need to recognize the signs and symptoms of MSDs and MSD hazards;

• Review of safety and health records the employer already keeps;

• Employee participation in the basic program; and

• Determination of the recordability and then covered status of reported MSDs.

Once a covered MSD has been identified, a full ergonomics program is required. However, even the full program may not be necessary in some circumstances when an MSD is identified. For example, if the means of controlling a job are obvious and completely effective, such as eliminating the need for lifting by installing automated equipment, then a detailed job hazard analysis is unnecessary because the employer will be able to use the proposed standard's quick fix option.

Table VII-7 shows the requirements of the rule, the circumstances that trigger these requirements, the hours or costs involved, and the level of expertise required. These are estimates made by OSHA and its ergonomics consultants, and they are based on experience in implementing such programs in a variety of workplaces. To further ensure that OSHA's estimates reflect real experience in actual workplaces, OSHA reviewed its estimates of the costs of controlling jobs with an Expert Ergonomics Panel made up of ergonomists with experience in controlling jobs in general industry settings. These estimates have been significantly modified from the estimates provided to the SBREFA Panel in February 1999. The most significant modifications to the economic analysis in response to the recommendations of the SBREFA panel are:

• OSHA has added "familiarization" costs for all general industry employers to read and understand the proposed rule to determine whether it:

  1) applies to their establishment, and

  2) would allow their program to be grandfathered in.

• OSHA has significantly increased its estimates of the costs of the analysis necessary to identify appropriate controls for problem jobs;

• OSHA has added costs for employers to assess whether a given MSD is in fact a covered MSD;

• OSHA has increased is estimates both of the amount of time consultants would be needed and the cost of consultant services.

The following table (Table VII-7) shows the assumption OSHA used to develop the costs estimates used in this Preliminary Economic Analysis.

Table VII-7. Assumptions Used to Develop Costs for Provisions of the Proposed Rule

Provision	When Required	Hours or Costs Involved	Level of Staff or Expertise Required
Familiarization Costs to Review Standard to Determine Applicability to Establishment and Ability to Grandfather In (Cost to All General Industry Firms)	Initially for all establishments in general industry	1 Hour	Manager
Cost to Investigate whether an MSD or Persistent Symptoms are Covered by the Standard (Cost to All General Industry Firms)	All establishments with manufacturing or manual handling jobs; for other general industry establishments, only when an MSD occurs	0.25 hour of managerial time and 0.25 hour of employee time per recordable MSD	Manager who has received initial training
Cost to Implement Initial Program (designating responsible persons, providing resources, etc.) (Basic Program)	Establishments with basic programs: all with manual handling or manufacturing jobs; otherwise, only if MSD occurs	1 hour	Manager with initial training
Cost to Provide Managerial Training as Part of Management Leadership (Basic Program)	Establishments with basic programs: all with manual handling or manufacturing jobs; otherwise, only if MSD occurs	2 Hours	Manager
Cost to Set up Reporting System (Basic Program)	Establishments with basic programs: all with manual handling or manufacturing jobs; otherwise, only if MSD occurs	1 hour	Manager with initial training
Cost to Provide Employee Information (Basic Program)	Establishments with basic programs: all with manual handling or manufacturing jobs; otherwise, only if MSD occurs	0.5 hour per employee plus 0.5 hour managerial time	Manager with initial training
Cost to Provide Managerial Training in Establishments with Full Program	If persistent symptoms or an MSD occurs in manufacturing or manual handling establishments; otherwise, only where an MSD occurs	16 hours of managerial time	Manager with initial training
Cost to Train Employees in Establishments with Full Programs	All establishments having problem jobs	1 hour of employee time per affected employee, 2 hours of managerial time per problem job to provide training; 25% of employers able to use quick fix option and do not need to conduct employee training.	Manager with training required for the full program
Cost of Job Hazard Analysis (Full Program)	All establishments with problem jobs	1 hour of managerial time plus 1 hour employee time per problem job	Manager with full program training
Cost to Evaluate Job Controls (Full Program)	All establishments with problem jobs	2-16 hours of employee and 2-32 hours managerial time, depending on problem job; in 15% of cases, $2,000 for consulting ergonomist's time is assumed to be required	In 85% of cases, manager with full program training; in 15% of cases, consultant ergonomist.
Cost to Administer MSD Management (Full Program)	All establishments with problem jobs	1 hour of managerial time per MSD	Manager with full program training, health care professional, or ergonomist
Cost to Do Record-keeping (Full Program)	All establishments with an MSD or persistent symptoms	0.25 hours of supervisory time per MSD	Supervisor
Cost to Conduct Program Evaluation (Full Program)	All establishments with full programs	4 hours of managerial time in the three years following occurrence of covered MSD. For 25% of problem jobs able to use quick fix option, no program evaluation is conducted.	Manager with full program training
Cost To Implement Job Controls -- Engineering, work practice, or administrative controls	Job control costs: all establishments with problem jobs	Costs per job intervention per affected employee vary by industry and occupational groups and are presented in detail in Chapter V of the Preliminary Economic Impact Analysis (affected employees include the employee incurring the covered MSD and all other employees in the establishment with the same job)	Covered under costs calculated for evaluating and implementing controls (above)
Cost to Provide Work Restriction Protection	All establishments with problem jobs	$946 per MSD	Covered in costs for administering MSD management, above

Benefits of the Proposed Standard

OSHA estimates that the proposed standard would, within 10 years, lower the current (1996) general industry rate of MSDs by 26 percent and produce direct cost savings of $9.1 billion per year; direct cost savings are defined as the value of lost production, medical costs, administrative costs of insurance, and indirect costs to employers. Direct cost savings do not include any quantitative benefits for the pain and suffering of workers and their families, and thus do not represent a full measure of the economic benefits of the proposed standard.

OSHA's benefits estimates are based on the following key assumptions, data, and estimates:

• Estimates of MSD rates are based on the BLS data on MSD rates for lost workday MSDs, multiplied by the ratio of lost workday injuries to all injuries and illnesses in an industry to arrive at the total number of MSDs for an industry (see Industrial Profile, Chapter II, for a table showing MSD rates by industry);

• When a job is fixed, the MSD rate in that job is assumed to be reduced by 50% (the basis for this estimate is discussed in the Benefits chapter of this Preliminary Economic Analysis and in the Preliminary Risk Assessment section of the Preamble); and

• Establishments already having ergonomics programs are assumed already to have achieved a 50% reduction in their rates of MSDs.

Key Assumptions of the Preliminary Economic Analysis

OSHA's analysis of the benefits, costs and economic impacts of the proposed standard uses a variety of data and estimates from a number of sources. These data and estimates are outlined in detail in the Industrial Profile, Costs of Compliance, and Benefit chapters of this Preliminary Economic Analysis (Chapters II, V, and IV, respectively). There are, however, certain issues for which data are lacking, and OSHA has had to make reasonable assumptions to bridge the data gaps in these cases. This section outlines certain key assumptions that OSHA has made, and solicits information and data that could be used to refine these assumptions.

1. BLS maintains data distinguishing MSDs from other types of occupational injuries and illnesses only for MSDs involving days away from work. This means that MSDs that involve restricted work (assignment of the injured worker to "light duty" work) or that involve time off only on the day of the injury are not counted by the BLS. Lacking any other information, OSHA has assumed that the ratio of all MSDs to MSDs with days away from work is the same for each industry as the ratio in that industry of total injuries and illnesses to all injuries and illnesses involving days away from work. The average value of this ratio is three, but the value varies greatly by industry. OSHA solicits information concerning the actual experience of employers with respect to the number of MSDs involving days away from work and the number of OSHA recordable MSDs that do not involve lost time.

2. OSHA does not have information concerning how many MSDs meet the proposed standard's test for covered MSDs (i.e., the number of MSDs that would "pass" the screening criteria in section 1910.902) and thus would require the implementation of a full program. In the absence of such information, OSHA has assumed that all jobs that have already been controlled will not subsequently give rise to a covered MSD, while all jobs that have not been controlled will have covered MSDs that require the implementation of a full program. This assumption is discussed in detail in the Benefits chapter (Chapter IV), but it affects both the benefits and costs estimates for this proposed standard. OSHA welcomes any information concerning the frequency with which covered MSDs and non-covered MSDs occur, both in previously controlled and in uncontrolled jobs.

3. Lacking more detailed information, OSHA has assumed that MSD rates within an industry are determined by whether or not establishments have ergonomics programs. Many SERs were concerned that the proposed standard would result in significantly increased reporting of MSDs. OSHA examined this possibility by conducting a sensitivity analysis of the direct cost savings (benefits) and costs that would occur if the number of MSDs reported increased by 50 percent. OSHA found that, if the new MSDs reported had the same severity as those currently being covered by workers' compensation, the new reporting would increase the costs of the proposed standard to employers only by 24 percent but would increase the direct cost savings (benefits) associated with the proposed standard by 66 percent. This disproportion between the costs and benefits would be the case unless the new MSDs being reported were only 20% as severe as those being reported today. Further, based on the NCCI's estimate (as cited in Ruttenberg and Elisburg 1998) that employee-perpetrated fraud accounts for less than 2 percent of all workers' compensation fraud, and on the fact that the work restriction protection provision of the standard is triggered only when the employer-not the employee -- makes the determination that WRP is necessary, OSHA does not believe that the proposed standard will encourage an increase in employee perpetrated fraud or that such fraud will affects the standard's costs or benefits.

Recordkeeping Requirements

Firms with fewer than 10 employees do not have to keep any records under this proposed standard. Firms that do not meet this condition must keep the following records:

• Employee reports and responses to those reports;

• Results of job hazard analyses;

• Hazard control records;

• Quick fix control records

• Evaluations of the program; and

• MSD management records.

5. Federal and State Rules That May Duplicate, Overlap or Conflict with the Proposed Rule

There are no existing Federal regulations requiring ergonomics programs of employers in general industry. OSHA published voluntary guidelines for ergonomics program management in meatpacking plants in 1990 to assist employers in that industry voluntarily to establish and maintain ergonomics programs. Only one state, California, currently has an ergonomics program standard in effect. The California program requirement is triggered by two or more MSDs of any type occurring in the same job. If OSHA were to adopt a similar approach, fewer full programs would be required than is the case with the proposed rule; however, the California rule requires a program if there are two MSDs of any kind, even if they do not meet OSHA's criteria for a covered MSD. (For a more detailed discussion of alternative triggers, see the last section of this chapter.) Several other States -- Washington, Rhode Island, Minnesota, North Carolina -- are currently developing enforceable ergonomics standards.

Currently, employers are required to correct some ergonomic hazards (i.e., those posing a risk of death or serious physical harm) under the General Duty Clause of the OSH Act. OSHA's draft safety and health program rule (once in effect) would provide a framework requiring employers to address those ergonomic hazards citable under the General Duty Clause. OSHA has reviewed the current drafts of both the safety and health program rule and the ergonomics program standard and found that the ergonomics program required by the ergonomics program rule is consistent with and could easily be made a part of a safety and health program set up to comply with the draft safety and health program rule (once in effect). Indeed, the ergonomics program standard could be viewed as augmenting the safety and health program rule in three ways: (1) by expanding the coverage of the safety and health program rule to cover ergonomic hazards not covered by the General Duty Clause, (2) by providing additional detail concerning how MSD hazards should be addressed, and (3) by requiring MSD management, including work restriction protection, for workers experiencing job-related musculoskeletal disorders.

Small entity representatives (SERs) who participated in the SBREFA process expressed concern that the proposed ergonomics standard might present conflicts with the National Labor Relations Act (NLRA) and with the Americans with Disabilities Act (ADA) and other equal opportunity legislation. These possible conflicts are discussed in detail in the Preamble to the proposed rule, along with a discussion of the perception among some SERs that the proposed standard may provide incentives to violate these statutes, e.g., by encouraging selective hiring.

6. Alternatives to the Proposed Standard

Regulatory Flexibility Elements Already Incorporated into the Proposed Rule

OSHA's proposed rule already incorporates a variety of regulatory flexibility features. First, the proposed rule has many performance-oriented aspects and is designed to provide all firms with flexibility in meeting the rule's core requirements. For example, the core requirement for employee participation states only that employees must have ways to report problems, get responses, and be involved in developing, implementing, and evaluating the ergonomics program. Employers have great flexibility in how to establish such systems and ensure such participation. Some employers may use formal mechanisms, such as employee surveys and joint employee-management committees. Others may find it more effective simply to designate a person who can receive employee reports and discuss problems with affected employees. The choice is up to the employer.

In addition to these general flexibility features, OSHA's proposed rule has been tailored to recognize the special problems potentially faced by employers with fewer than 10 employees in complying with the new rule. Although these employers cannot be exempted from the rule under the mandate of the OSH Act, the requirements for these employers have been reduced in some instances. For example, OSHA has tailored the proposed rule to very small employers by exempting them from all documentation requirements.

However, the most important regulatory flexibility features incorporated into the proposed standard are those related to tiering and the use of triggers. Tiering refers to the two levels of ergonomics program embedded in the standard: a "basic" program with few requirements for establishments without covered MSDs, and a "full" program with additional requirements for establishments with such MSDs. Triggers, on the other hand, are events occurring in the workplace that require certain employer actions under the standard. These mechanisms are designed to address the range in risk encountered by employees potentially within the scope of the standard.

Figures 1 and 2 show the distribution and cumulative distributions of the general industry population by level of risk of incurring a lost-workday MSD. The average risk of incurring such an MSD for all general industry employees covered by the BLS statistics is 7.1 per thousand employees per year (using 1996 data). As the table shows, less than 20 percent of the population is subject to levels of risk more than twice this average. Almost all employees experience a risk that is greater than 1 per 1,000 per year. Thus, employees in general industry are almost universally subject to a significant annual risk of incurring a lost workday MSD; however, portions of the employee population are subject to unusually high risks. OSHA has preliminarily rejected the alternative of exempting some employers in general industry from the scope of the standard because significant risk exists for all employees in general industry and the Act does not envision the exemption of employers whose employees face such risks.

Recognizing the need to provide protection for employees subject to significant risk but wishing to minimize the burden associated with a full ergonomics program, OSHA has tried in the proposed rule to provide flexibility through a system of tiering and triggers, as discussed above. The proposed standard uses two types of triggers: (1) whether a general industry employer has employees engaged in manufacturing operations or manual handling, and (2) whether or not an employee in a general industry facility has had a job-related MSD.

Employers with employees engaged in manufacturing operations or manual handling are treated differently from other general industry employers because employees engaged in these activities account for 60 percent of all lost workday MSDs while accounting for only 28% of all employees in general industry. Firms with employees engaged in these two activities are required to set up a basic ergonomics program with management leadership, employee participation, and hazard identification and information even if no MSD has occurred at the facility. Approximately 25 percent of all general industry employers will need to set up a basic program for their employees engaged in manufacturing operations or manual handling as a result of this requirement. (The basic program need not be applied to other employees in the facility.) Other employers do not need to set up a basic program unless an MSD occurs. However, firms with employees engaged in manufacturing operations or manual handling are not required to have the full program elements of job hazard analysis and hazard control; training; MSD management; and program evaluation unless a covered MSD occurs. In other words, general industry employers who do not have any employees engaged in manufacturing operations or manual handling do not need to have any ergonomics program until a covered MSD occurs. Thus most program elements are only required in firms clearly demonstrated to have an MSD hazard, as evidenced by the fact that a covered MSD has occurred.

Approximately 75% percent of all employers will not need to respond to this standard in any way unless an MSD occurs in their facility. Even when an MSD occurs, the full program applies only to the injured employee (at his or her job) and to employees with the same job (with respect to physical work activities) as that of the employee who incurred the MSD. There is no need for the employer to set up a program for other employees (i.e., those who are not in the problem job or a job judged to be the same as that job) in the facility.

The triggers used for additional program elements in the proposed standard are the presence of employees engaged in manufacturing or manual handling, and the presence of a covered MSD. A covered MSD is defined as one that meets the following criteria:

• it is, or would be, recordable on an OSHA 200 log;

• it occurred in a job where workplace conditions and physical work activities are reasonably likely to cause or contribute to the type of MSD reported; and

• the workplace conditions and physical work activities are a core element and/or make up a significant amount of the employee's worktime.

This multi-level trigger serves to eliminate many MSDs that may occur as a result of unusual activities on the job or that are not the result of routine exposure to risk factors of a kind known to cause or contribute to MSDs.

OSHA will respond to the need expressed by many small business stakeholders for guidance and outreach by providing extensive outreach materials when the rule is published in final form. For example, OSHA may develop one or more checklists that can be used to aid in determining if an MSD is covered and to aid in job analysis. OSHA solicits comments on the best ways to focus its outreach efforts and the best means for providing compliance assistance to small entities.

Presented below are a number of alternatives that OSHA has considered in developing the proposed standard. OSHA solicits comment on all of the alternatives discussed below.

Alternative 1: No Rule: Continue to Rely Only on Existing OSHA Programs and Policies. Some small entity stakeholders urged OSHA to continue to rely on outreach efforts to encourage employers to adopt ergonomics programs voluntarily, i.e., to continue to urge employers to voluntarily adopt the Agency's meatpacking guidelines, or a variant on these guidelines designed for all firms, rather than issuing a rule. OSHA has made the voluntary adoption of ergonomics programs a cornerstone of many of its injury prevention efforts for years. The Agency also has had regional ergonomics coordinators to provide technical assistance to OSHA area offices, consultation programs and state programs since 1987. OSHA issued the ergonomics program management guidelines for meatpacking plants in 1990 (Ex. 26-3). Since 1991, OSHA has also published a series of booklets designed to raise awareness and provide solutions to ergonomics problems. Since 1996, OSHA has had a formal four-pronged strategy for ergonomics, including outreach and education; research; and enforcement under the General Duty Clause, in addition to development of this proposed rule. As part of this strategy, starting in 1997, OSHA has held a series of national and regional "Best Practices" conferences on ergonomics. Such conferences have made a special effort to assure participation by small businesses. Starting in 1997, OSHA also has maintained an ergonomics page on its web site. This page provides access to OSHA publications on ergonomics, news about opportunities to participate in ergonomics conferences, and links to websites with ergonomics information.

Despite these efforts and the fact that many firms have found ergonomics programs cost-effective, 29% of establishments surveyed by OSHA (ERG 1999) reported having done any risk analysis of ergonomic hazards in their workplaces. Even fewer have actually attempted to fix jobs that have ergonomic hazards. Firms that have begun to implement ergonomics programs cannot be distinguished by industry, SIC code, or other obvious factor from those that have not done so, i.e., some firms have implemented such programs, while other firms that face similar musculoskeletal problems and belong to the same industry have not.

Although the Agency's efforts to encourage the voluntary adoption of ergonomics programs, backed by enforcement efforts involving the General Duty Clause (which have often led to corporate settlements), have resulted in thousands of employers and employees receiving the benefits of ergonomics programs, the majority of employers still have not adopted such programs. OSHA's experience also shows that outreach without enforcement is unlikely to be successful. The industries that have been most successful in adopting ergonomics programs and reducing MSDs -- the automobile and meatpacking industries -- both did so as a result of an OSHA strategy combining strong enforcement and outreach. At this stage, the additional incentive provided by a rule, in addition to targeted enforcement of the General Duty Clause and continued outreach, is needed if a majority of employers are to adopt ergonomics programs. OSHA will continue, and indeed plans to intensify, its outreach efforts in this area. Publication of a rule does not mean that OSHA is abandoning outreach, or choosing only to rely on this rule; instead, the Agency is adding a rule to all of its other efforts to encourage employers to adopt ergonomics programs. The ergonomics program rule thus supplements the Agency's other efforts and brings to bear the only major tool at the Agency's command that has not to date been employed in the effort to encourage employers to adopt these programs.

Some small entity stakeholders argued that because ergonomics programs are cost effective, there should be no need for regulation. Although OSHA agrees that ergonomics programs are cost effective for most small businesses, OSHA does not agree that cost effectiveness represents a sufficient motive for many small businesses to implement ergonomics programs. There are two major reasons for this.

First, many of the benefits of ergonomics programs do not accrue directly to smaller employers. Research has shown that workers' compensation costs do not, on the average, cover all income losses to injured workers, and do not attempt to account for their pain and suffering. Further, MSDs are significantly underreported to the workers' compensation system. One study found that the percent of medically diagnosed MSDs reported to the workers' compensation system ranged only from less than 1 percent to about 14 percent (Fine, Silverstein, Armstrong, Anderson and Sugano 1986 (Ex. 26-920)). Other studies (Cannon, Bernacki, and Walter 1981 (Ex. 26-1212); Silverstein, Stetson, Keyserling, and Fine (1997) provide plant-specific evidence of this tendency (Ex. 26-28). For an analysis of the underreporting and underfiling issue as it relates to occupational injuries and illnesses generally and to MSDs in particular, see Section VII of the preamble, Significance of Risk.

The social burden of adverse health effects is also shared by taxpayer-supported programs such as welfare, social security disability payments, and Medicare. Employers therefore have less incentive to avoid such losses than they would if they were directly liable for, or even aware of, all such claims. This combination of problems not reported to employers and the transfer of risk to others is another reason why the market fails to internalize the social costs of occupationally related injuries and illnesses such as musculoskeletal disorders. If workers do not recognize a risk as work-related or do not report the problem to employers, it will not be adequately addressed by employers.

In addition, smaller employers typically are not experience-rated, so that they do not directly pay a significant share of the costs of workers' compensation claims. This is particularly true of smaller firms with fewer hazards. Economic analysis principles suggest that regulations should consider costs and benefits to all parties, not just to employers. When a substantial portion of all benefits go to parties other than employers, employers cannot be counted on to implement ergonomics programs to the extent that such programs are cost beneficial.

Second, small businesses typically take the very understandable approach of not fixing what isn't perceived to be broken. Because ergonomic injuries and illnesses are relatively rare events in small firms, and are paid for in part by workers' compensation insurance, many small employers, especially in lower hazard industries, often neglect ergonomic problems. This does not mean that ergonomics programs are not cost effective. Aggregate statistics show that small firms have a significant number of MSDs, and studies show that these MSDs can be reduced by ergonomics programs. However, because MSDs are rare events for an individual small employer, the need for ergonomics programs may not come to the attention of busy small business employers as often as is the case for larger employers. As a result, ergonomics programs are less likely to be adopted by employers with few employees. (See discussion below.) This is unfortunate, because ergonomics programs are one of the best ways to lower workers' compensation costs for small businesses over the long run.

The threat of higher workers' compensation premiums and the presence of a substantial number of ergonomics injuries and illnesses do provide economic incentives for larger firms, because these firms are aware of and internalize a larger proportion of the true costs of the job-related injuries incurred by their workers. Thus larger firms can be expected to have done more about musculoskeletal hazards than smaller firms. Results from OSHA's ergonomics survey (ERG 1999) bear out this theoretical proposition: they show that only 25 percent of firms with fewer than 20 employees have analyzed their jobs for risk factors, while fully 86 percent of establishments with 500 or more employees, i.e., the largest firms and those most likely to self-insure, have done so. The same pattern holds for following through on these job analyses: 76 percent of the largest establishments have implemented at least some engineering controls to reduce risk factors, while only 13 percent of firms with fewer than 20 employees have done so. These data suggest that, where adequate awareness and economic incentives are present, firms find it in their interest to address the risk factors responsible for musculoskeletal disorders.

Alternatives 2 and 3: Tiering Approaches

Alternative 2: Eliminate the Basic Program Requirement for Employers in Manufacturing or Manual Handling. The advantages of a basic program are that it assures that MSDs will be reported as soon as they occur and that a system is in place to address problems as they occur. Many stakeholders who have initiated a basic program have found that having a reporting system, conducting some basic hazard identification, and providing information on MSDs to employees increases the number of reported MSDs and thus the number of cases where early intervention is possible. OSHA has been unable to demonstrate that a "reporting blip" in fact follows increased awareness of MSDs. OSHA's survey of employers with ergonomics programs (ERG 1999) would suggest that this is not the case. Even in the absence of a full ergonomics program, the early and complete reporting of MSDs can actually serve to lower the costs of MSDs because early reporting means that simple corrective action may take care of the problem and avoid extensive lost work time. Many employers and insurers feel that awareness and MSD management alone can significantly reduce the costs of MSDs. The proposed standard's requirements for a basic program for employers with employees in manufacturing or manual handling operations result in costs of $36 million per year for all businesses. Eliminating the basic program in manufacturing and manual handling, as this alternative would require, would lead to fewer reported MSDs and to a greater likelihood that MSDs will not receive attention until they become very expensive in terms of lost time and the costs of medical care. On the other hand, dropping the basic program requirement would eliminate the need for any program in facilities that have no covered MSDs.

Alternative 3: Extend the Basic Program Requirement to All of General Industry. Because OSHA believes that having a basic program is of value to all employers whose employees are at risk of experiencing MSDs, OSHA considered extending the basic program to all employers in general industry. Because many general industry employers whose employees do not engage in manual handling or manufacturing operations generally have lower rates of injuries and illnesses, in addition to lower rates of MSDs, many of these general industry employers are not required even to maintain an injury and illness log under OSHA's recordkeeping requirements (29 CFR Part 1904). However, employers who are not required to maintain an OSHA 200 Log or to have a basic program would be forced to rely primarily on workers' compensation claims for information about ergonomics hazards in their workplaces, and such claims have been shown to be an inadequate source of such information. Based on one study in the state of Wisconsin (Hanrahan1987), workers' compensation claims represented only 70% of all OSHA reportable injuries (Ex. 28-4). In the absence of a basic program with a formal reporting system, this means that 30 percent of MSDs might go unreported and uninvestigated. Extending the basic program to employers in all of general industry would result in additional initial costs of $318 million and in significant additions to the number of MSDs reported and corrected, as well as providing employees additional protection by encouraging reporting before MSDs become workers' compensation claims. The proposed standard does not extend the basic program requirement to general industry because the Agency is committed to targeting the standard to those facilities that have been shown to have the greatest MSD hazards.

Alternatives 4 through 8: Use Different Triggers

General Discussion. One of the key features of the proposed standard is that a full program is only triggered by a covered MSD, and then only for employees with the same job as the employee who incurred the MSD. OSHA found that the average job had three persons per job and that the average uncontrolled job has an MSD rate of 5 percent per year. Under the proposed trigger, it would be 5 years before 50% of all of the uncontrolled jobs covered by the scope of the standard are controlled, and 15 years before 90% of such jobs are controlled. Some stakeholders were concerned that this trigger was insufficiently proactive, and, as a result, OSHA examined alternatives that would result in more rapid efforts to control currently uncontrolled jobs. Alternative 4 reflects a more proactive trigger, i.e., that the signs and symptoms of MSDs be used as a trigger, and Alternative 5 is similarly proactive, because it would require a job hazard analysis of all jobs, without regard to whether MSDs have occurred to employees in them.

Other stakeholders were concerned that reliance on a trigger of one covered MSD would impose major expenses on employers to investigate and even control jobs that do not need controls, either because the job has already been controlled or because the MSD is one that has little or nothing to do with the kinds of risk factors a full ergonomics program can address. The OSHA proposal recognizes this potential problem by allowing, in section 1910.902, employers to rule out OSHA-recordable MSDs that are not related to the physical work activities and conditions in the job or do not constitute a core element or significant portion of the job. In the typical controlled job, where the average MSD rate is 2.5 percent per year, 50% of firms will incur an MSD within 9 years, and thus will have to determine if the MSD is one that will trigger a full program. Nevertheless, OSHA investigated the consequences of the use of alternative triggers involving more than one covered MSD. Alternative 6 is such an alternative: it would require a full program only when an establishment has had two covered MSDs; Alternative 7 also reflects a more stringent trigger and would require a full program only when two MSDs have occurred in the same job within one year; Alternative 8 would require a full program only when two MSDs have occurred within two years in the same job; Alternative 9 would require a full program only when two MSDs have occurred within three years in the same job; and Alternative 10 would require a full program only when an MSD involving days away from work occurs. The analysis of alternatives 6 through 10 assumes that work restriction protection would continue to be triggered by a single MSD of any kind.

Alternative 4: Use Signs and Symptoms to Trigger the Program. OSHA's proposed standard uses the occurrence of a covered MSD to trigger the full ergonomics program. The use of this trigger is particularly advantageous to smaller firms, because the smaller the firm, the less likely it is to incur an MSD and thus to need a full program. The typical firm with 1 to 20 employees, for example, will need to initiate a full program only once every ten years. The majority of very small firms, those, for example, with only two or three employees, will go 10 years without ever having to initiate a full program. However, because use of this trigger also means that corrective measures will not be implemented for years even in some high risk jobs, OSHA considered other, more proactive triggers. If a more proactive trigger such as the signs or symptoms of MSDs were used to trigger the full program, the number of MSDs reported would increase by 2 to 7 times, and a substantially larger number of employers would be required to implement a formal reporting system.

Alternative 5: Use the Results of Job Hazard Analysis to Trigger the Program. OSHA also considered requiring employers to implement job hazard analyses for all jobs in their establishments and to implement a full program if the analysis identified any high risk jobs. OSHA has not proposed this approach because it would require substantial effort by all employers, even those whose employees do not have a high probability of incurring an MSD or have not yet incurred an MSD. In addition, such an approach would increase the first-year costs of the ergonomics program standard by a factor of at least 10.

Alternative 6: Use a Trigger of Two MSDs per Establishment. The SBREFA Panel recommended that OSHA consider as an alternative trigger the occurrence of two MSDs at an establishment in a one year period, rather than the proposed trigger of one MSD in a job. To analyze this alternative trigger, OSHA assumed that the two MSDs would be covered MSDs, as they are under the proposed standard. The chief advantage of the alternative two-MSD trigger is that it would eliminate the need for the employer to investigate the first MSD to occur in an establishment. This alternative trigger would therefore have little effect on larger firms. Indeed, the typical establishment with more than 100 employees and typical rates of MSDs for either controlled or uncontrolled jobs can expect to have two MSDs every year and would thus, under the two-MSD trigger, need a full program. Indeed, if two MSDs in an establishment trigger a full program for the entire establishment, larger establishments would permanently need to have a full program for all employees. For smaller establishments, however, this alternative would greatly extend the time necessary to ensure that uncontrolled jobs are controlled. For a five-employee establishment, the requirement of a two MSD per establishment trigger would mean that it would be 30 years before 50% of such establishments would have controlled any jobs. During this time period, over 3.5 potentially controllable MSDs would have occurred in each such establishment.

Alternative 7: Use a Trigger of Two Covered MSDs in the Same Job Within One Year. To limit the number of situations in which employers would have to establish a full program when a full program might not be needed, many stakeholders expressed interest in alternatives involving more than one MSD. The SBREFA Panel also recommended that OSHA examine such alternatives. This section examines the alternative of using a trigger of two covered MSDs in the same job within one year.

If this trigger were adopted, it would be 95 years before 50% of all typical uncontrolled jobs (where "typical" is defined as a job with a 5% MSD rate and three persons in the job) were controlled, and 325 years before 90% of such jobs were controlled. In this typical situation, use of this trigger would mean that more than 14 preventable MSDs would occur in an uncontrolled job before a full program to control that job would be required. For situations in which there is only one employee holding a job, a full program would almost never be triggered under this alternative. On the other hand, in the typical controlled job (MSD rate of 2.5%, 3 persons per job), 50% of firms would incur 2 MSDs in a year only once every 400 years, at which time they would have to determine if the two MSDs were covered. Thus use of this alternative trigger would ensure that employers would only rarely have to address MSD problems occurring in controlled jobs; however, this alternative achieves this by allowing many preventable MSDs to occur in uncontrolled jobs.

Under this alternative, economic costs would decline to $0.85 billion per year, while costs to employers would decline to $1.85 billion per year. Significantly fewer employers would need to control jobs or initiate full programs; however, the costs of WRP (the proposed rule's Work Restriction Protection provision) would be higher because the standard would prevent significantly fewer MSDs but many workers would continue to need time off to recuperate. This alternative would reduce the number of establishments subject to full programs, but would do nothing to mitigate the effect of a full program on those employers required to have a full program. Thus the economic impact on affected facilities would be virtually unchanged. Direct cost savings (benefits) would decline to $2.18 billion per year under this alternative.

This alternative also would not significantly decrease employers' costs for determining the covered status of MSDs or for recordkeeping because, for this alternative to work, employers would need to keep records of all MSDs, and the records would need to contain sufficient investigative information for employers to determine, when a second MSD occurred, what control approach to adopt to address the risk factors present in the jobs giving rise to both MSDs.

Alternative 8: Use a Trigger of Two MSDs within Two Years in the Same Job. Both the SBREFA Panel and OSHA stakeholders recommended that OSHA evaluate an alternative trigger of two covered MSDs in the same job occurring within a two year period. If this trigger were adopted, it would be 35 years before 50% of typical (where "typical" is defined as a 5% MSD rate and three persons in the job) uncontrolled jobs were controlled, and 100 years before 90% of such jobs were controlled. In this typical situation, use of this trigger would mean that more than four MSDs would occur in an uncontrolled job before the employer would be required to implement a full program. On the other hand, in the typical controlled job (MSD rate of 2.5%, 3 persons per job), 50% of firms would incur 2 MSDs within two years only once in 130 years (and thus would have to determine whether the second MSD triggers a full program only once in the same period). Thus this alternative would mean that employers would only rarely have to investigate problems in controlled jobs, but it would do so by allowing many preventable MSDs to occur in uncontrolled jobs.

Under this alternative, economic costs would decline to $1.40 billion per year, while costs to employers would decline to $2.33 billion per year. Very few employers would need to control jobs or initiate full programs; however, the costs of WRP would be higher because the standard would prevent very few MSDs but many workers would still need time off to recuperate. This alternative would reduce the number of establishments subject to full programs, but would do nothing to mitigate the effect of a full program on those employers required to have such a program. Direct cost savings (benefits) would decline to $4.24 billion per year under this alternative.

In OSHA's view, this alternative would also not significantly decrease an employer's costs for investigating MSDs or for recordkeeping. For this alternative to work, employers would need to keep records of all MSDs, and the records would need to contain sufficient investigative information for the employer to determine, if a second MSD occurred, what kinds of controls would be appropriate to address the risk factors associated with the two MSDs.

Alternative 9: Use a Trigger of Two MSDs within Three Years in the Same Job. OSHA also analyzed a trigger alternative of 2 MSDs in three years in the same job. If this trigger were adopted, it would be 10 years before 50% of typical uncontrolled jobs (where "typical" is defined as a 5% MSD rate and three persons in the job) were controlled, and 30 years before 90% of such jobs were controlled. Use of this trigger would thus mean that more than four MSDs would occur in an uncontrolled job before a full program to control that job would be required. On the other hand, in the typical controlled job (MSD rate of 2.5%, 3 persons per job), 50% of firms would incur 2 MSDs within two years only once in 80 years (and would then have to determine if the MSD is covered.) Thus this alternative would also ensure that employers would rarely have to investigate problems in controlled jobs, but the alternative achieves this by allowing many preventable MSDs to occur in uncontrolled jobs.

Under this alternative, economic costs would decline to $1.70 billion per year, while costs to employers would decline to $2.61 billion per year. Significantly fewer employers would need to control jobs or initiate full programs under this alternative; however, the costs of WRP would be higher because the standard would prevent significantly fewer MSDs but many workers would still need time off to recuperate. This alternative would thus reduce the number of establishments subject to full programs, but would do nothing to mitigate the effect of a full program on those employers required to have a full program. Direct cost savings (benefits) would decline to $5.05 billion per year under this alternative.

Alternative 10: Use a Trigger of One Lost Workday MSD. The SBREFA Panel urged OSHA to consider an alternative trigger of one lost workday MSD, i.e., one MSD involving days away from work. This alternative would have the effect of reducing the probability of triggering a full program by approximately 66 percent. If this trigger were adopted, it would be 14 years before 50% of typical uncontrolled jobs (where "typical" is defined as a 5% MSD rate and three persons in the job) were controlled, and 50 years before 90% of such jobs were controlled. On the other hand, in the typical controlled job (MSD rate of 2.5%, 3 persons per job), 50% of firms would incur 2 MSDs within two years only once in 30 years (and thus have to determine if the MSD would trigger a full program). Thus this alternative would also ensure that employers would rarely have to investigate problems in controlled jobs, but the alternative would achieve this by allowing many preventable MSDs to occur in uncontrolled jobs.

Under this alternative, economic costs would decline to $1.64 billion per year, while costs to employers would decline to $2.49 billion per year. This alternative would reduce the number of establishments subject to full programs, but would do nothing to mitigate the effect of a full program on those employers required to have a full program. Direct cost savings (benefits) would decline to $5.24 billion per year under this alternative.

Alternative 11. Use a Trigger of One Lost Workday MSD or 2 MSDs. This alternative would provide two triggers. An employer would have to fix a job and/or implement a full program if either of two conditions occurred: 1) there was a lost workday MSD; or 2) there were two MSDs in that job. This alternative would remove an incentive that employers might have with the single lost workday MSD trigger, i. e., to urge employee to be on restricted duty rather than away from the workplace to avoid the lost workday that would trigger the standard's job hazard analysis and control requirements. This approach would somewhat increase both the costs and direct cost savings as compared to alternative 10.

OSHA's Preliminary Conclusions with Respect to Alternative Triggers . OSHA has examined a number of alternative triggers, including triggers that are more and less proactive than the trigger included in the proposed standard. OSHA believes that the choice of trigger it has made in the proposal -- reliance on the occurrence of a single covered MSD in a job to trigger the full program for that job and all jobs in the establishments that are the same with respect to physical work activities -- represents a reasonable compromise between the need to protect workers from MSDs, on the one hand, and the need, on the other, to target the standard to situations where the risk is greatest. OSHA believes that use of a trigger involving more than one MSD or a single lost workday MSD would inevitably mean that many workers will be injured, i.e., that many preventable MSDs will occur before action is taken. OSHA also believes that the provisions of the proposed standard that are designed to ensure that only covered (and thus job-related) MSDs trigger the full program are sufficient to ensure that full programs will not be required except where they are needed. OSHA solicits comment both on triggers and the use of more than one MSD as a trigger.

Alternatives 12,13, 14, and 15: Alternatives Related to Work Restriction Protection

General Discussion. Many stakeholders objected to the work restriction protection (WRP) provisions (called medical removal protection, or MRP in the draft standard reviewed by the SBREFA Panel) of the proposed standard. The SBREFA Panel recommended that OSHA re-examine the need for WRP and explore possible alternatives to WRP. In order to do this, it is first necessary to understand that OSHA believes WRP is necessary because, absent WRP, the proposed standard provides employers and employees with significant incentives to avoid recognizing and reporting workplace MSDs. First, employees may be reluctant to report MSDs if reporting them could cause the employee to suffer financial loss. In the hearing on OSHA's arsenic standard, for example, OSHA heard testimony to the effect that fully 42% of employees had chosen not to participate in a medical surveillance program that would potentially cause them to lose money or risk their jobs, and the rulemaking records in several other OSHA health standards (e.g., lead, cadmium) also support the need for MRP on the ground that it is needed if employees are to participate fully in medical programs. Two aspects of the proposed standard are especially relevant in this connection: first, the prompt reporting of MSDs is important because MSDs reported early are less likely to lead to long-term disability. One study found that the severity of MSDs could be reduced by 75 percent or more through early reporting alone. Second, the proposed standard is designed specifically so that, if no covered MSD is reported, the employer need not implement the full program. Thus, employers covered by the standard have significant new incentives to discourage the reporting of MSDs and, absent WRP, employees have a significant incentive not to report them. Three examples, which are discussed separately below, highlight the range of employee disincentives to reporting and employer policies that could be invoked in the absence of WRP: (1) MSDs involving lost worktime and not covered by workers' compensation; (2) MSDs involving lost worktime that are covered by workers' compensation; (3) and assignment to light duty ("restricted work") involving no lost worktime.

MSD Not Covered by Workers' Compensation. There are two common reasons why a particular work-related MSDs may not be covered by workers' compensation: first, the length of the worker's absence from work may be shorter than the workers' compensation waiting period for that state. States have waiting periods of from one to seven days before the indemnity portion of workers' compensation comes into effect. This means that an employee who reports an MSD could be out of work for one to seven days without receiving pay for this period. The likelihood of receiving no pay during this interval is particularly important for employees in the 50% of small firms that provide their employees with no sick leave (BLS 1997). Thus employees in this situation clearly have an incentive to avoid reporting an MSD, particularly when, under the proposed standard, the employer or health care professional could recommend that the employee stay home for a few days to recuperate. In addition, in the absence of WRP, employers could greatly increase the disincentive for employees to report MSDs by instituting a policy requiring any employee who reports an MSD to take from one to 5 days off from work. Such a policy would, in many cases, cost the employer nothing, and might even seem like a good way of avoiding the worsening of the MSD. However, such a policy would also ensure that employees would be extremely reluctant to report MSDs. There are also situations where many types of work-related MSDs, e.g., rotator cuff tendinitis in Virginia, are not covered by workers' compensation no matter how long the absence from work. In this case, the employee could lose his or her job and all pay and benefits for an unlimited duration as a result of the MSD. Since an employee can never be certain that an MSD will be covered by workers' compensation (some employers routinely question all workers' compensation claims related to MSDs), this possibility is likely to be in the employee's mind whenever he or she reports an MSD.

MSD Covered by Workers' Compensation. When an MSD is covered by workers' compensation, the potential disincentives to underreporting are smaller. For example, many States retrospectively pay indemnity for the waiting period once the claim is accepted and the waiting period is exceeded. However, workers' compensation does not address either tangible or intangible benefits other than salary. As a result, a worker out on workers' compensation could lose both tangible benefits (such as health insurance for himself/herself and his/her family) and intangible benefits, such as seniority and even the right to return to the job when able. These potential losses represent a serious threat to the income and job security of an employee and are therefore likely to lead to a reluctance to report.

Worker with MSD Placed on Restricted Work. When a worker is placed on restricted work within the employer's establishment, workers' compensation temporary disability payments do not come into play. In this situation, the chief disincentive to reporting is the possibility that the employer will cut pay because the available restricted work job involves lower pay, or that the employer will cut tangible or intangible benefits, such as seniority rights.

Nevertheless, to respond to the recommendation of the SBREFA Panel, OSHA examined a number of alternatives to the proposed work restriction protection provisions, which are discussed in detail below. For comparison, it should be noted that OSHA's proposed WRP provision has annualized costs of $875 million per year. Twenty-four percent of these costs are associated with lost worktime that does not exceed the waiting limit for workers' compensation; 18 percent is associated with supplementing workers' compensation payments with additional pay and benefits; and 58 percent is associated with covered MSDs that would not be covered as workers' compensation claims at all. Alternatives 12 through 14 assume that a worker would receive 90 percent of take-home pay and full benefits when away from work.

Alternative 12: Do Not Require Work Restriction Protection. Work restriction protection accounts for approximately 22% of the costs of the rule to employers, or about $875 million per year. All of these costs to employers could be saved by eliminating the WRP provision from the proposed rule. This approach would, however, provide employees with disincentives to report in any situation where either the employee's medical situation or the employer's policies would require the injured employee to spend time away from work. This approach would essentially enable the least conscientious employers to avoid the intent of the standard almost completely by adopting policies designed to discourage reporting; even employees of employers who do not intend to be punitive toward employees reporting MSDs would be somewhat discouraged from reporting because they would fear the economic loss potentially associated with reporting.

Relatively few of the SERs favored removing the WRP provision completely; many, if not most, of the objections to WRP focused on those situations where an employee would be paid for being absent from work, rather than on workers on restricted work or the loss of intangible benefits after the employee returns to work (Ex.23). In response, OSHA has revised the WRP provision in the proposal to differentiate somewhat between those injured workers who are out of work entirely and those who are on restricted work.

Alternative 13: Require Worker Restriction Protection for Only Three or Seven Days. Limiting WRP to 3 days with full pay and benefits would address the problem that the workers' compensation system in many States does not cover short term absences. This approach would reduce the costs of WRP by 76 percent, to $210 million per year. However, this approach would still leave workers in some States subject to losses even for cases otherwise eligible for workers' compensation because some States have waiting periods that are longer than three days. More importantly, this alternative would provide injured employees with no pay beyond three days if the MSD turned out not to be covered by workers' compensation. Since whether an MSD is covered by workers' compensation cannot be known in advance, adoption of this alternative would, OSHA believes, have a chilling effect on MSD reporting.

Increasing the coverage to seven days would assure that workers eligible for workers' compensation would be covered in all states. This approach would have costs of $320 million per year.

Alternative 14: Do Not Start WRP until the Worker Has Been Absent Three Days. This alternative would be designed to avoid requiring the employer to cover the expenses of an injured employee who would not be eligible for workers' compensation (because of the waiting period) by providing that the first three days of absence with an MSD would not be covered by WRP. This alternative would reduce the costs of WRP by 24 percent, to $667 million per year. However, this alternative would do nothing to deter employers from setting up policies requiring, for example, that any employee reporting an MSD take three days off without pay; such policies would, needless to say, have a chilling effect on reporting. This alternative would also mean that minor MSDs, i.e., those requiring a day or two away from work, could result in loss of pay for the worker. As a result, this alternative would have the perverse effect of encouraging employees to wait until an MSD is serious enough to warrant more than three days away from work before reporting the MSD.

Alternative 15: Limit WRP to 3 Months. This alternative would be designed to limit the employer's costs of WRP by limiting the length of time that WRP is in effect. It would lower the costs to employers of WRP by 24 percent, to $668 million per year. OSHA is concerned that this alternative will have a chilling effect on the reporting of MSDs that could be serious enough to lead to longer term disabilities.

Alternative 16: Provide WRP at the Level of 100% of Take Home Pay. This alternative would ensure that the worker suffers no economic loss as a result of reporting an MSD. This alternative would increase the costs to employers of WRP by 36%, to $1.2 billion per year. This 36% increase in costs to employers represents a transfer in costs to employers from employees, who now bear these economic losses themselves.

Alternatives 17, 18, 19, and 20: Different Scope Provisions

OSHA has considered, and asked stakeholders to consider, four alternative scopes for the proposed standard:

1) apply it to manufacturing operations only;

2) apply it to manufacturing operations and manual handling;

3) take the approach reflected by the proposed standard, i.e., provide coverage of all general industry jobs in which a covered MSD occurs; and

4) exempt low hazard firms.

The first two approaches listed above -- applying the standard only to manufacturing operations, or only to these operations and manual handling -- would have the effect of exempting most industries with somewhat lower, but still significantly high, rates of MSDs from coverage by the proposed standard. OSHA welcomes suggestions about other approaches to the scope of the standard that would reduce the burden on industries with somewhat lower rates of MSDs while still protecting employees from the significant risk of incurring an MSD. Each of these alternative scope provisions is discussed below.

Alternative 17: Cover Manufacturing Operations Only. A proposed standard covering manufacturing operations only would apply to 377,000 establishments and capture 30 percent of all lost workday MSDs. Such an approach would address one of the most concentrated areas of MSD risk. Manufacturing operations involve less than 10% of all establishments in general industry and fewer than 15% of all employees, but they account for almost one-third of all reported MSDs. This approach was strongly opposed by many stakeholders, who pointed out that many very high risk jobs and industries would not be covered by the proposed standard if this alternative were adopted.

Alternative 18: Cover Manufacturing and Manual Handling Operations Only. A standard covering manufacturing operations and manual handling only would cover 1.59 million establishments and capture 60 percent of all MSDs. This approach would expand coverage beyond manufacturing, particularly to the high risk transportation and health care sectors, while still maintaining a sharp focus on a limited number of establishments and employees within general industry. However, this approach would leave a large number of employees at significant risk of incurring debilitating injuries. For example, this approach would not cover carpal tunnel syndrome and tendinitis in airline ticket agents, telephone sales personnel or video display terminal personnel. Many stakeholders objected to this approach, and some stakeholders pointed out that it would not be appropriate to require a program when certain employees in an establishment incurred an MSD while other employees in the same facility would not receive the benefits of a program no matter how many MSDs they incurred.

Alternative 19: Exempt Small Businesses in General Industry. This option is not one that the OSH Act permits OSHA to consider; the Act requires the Agency to protect employees exposed to significant risk to the extent feasible. OSHA's data indicate that there is a significant risk of job-related MSDs even in very small general industry firms. As a result, although OSHA can and is seeking ways to mitigate the standard's impact on small firms, exempting small firms from the standard would leave their employees at significant risk when there are feasible ways of mitigating that risk. OSHA may, however, consider delaying the compliance date or otherwise modifying certain provisions for very small firms. OSHA requests comment on this alternative and on other ways of reducing the costs and impacts of the standard that would protect employees at these firms from the significant risk they face of incurring work-related MSDs.

Alternative 20: Exempt Low Hazard Firms. OSHA believes that the approach taken in the proposed standard of requiring a full program only when MSDs occur or persistent symptoms and supporting information are present will have the effect in practice of exempting most low hazard small firms from the coverage of the standard. However, it is possible under the proposed standard for a large firm with very low rates of MSDs still to be required to have a program. OSHA believes that coverage of such firms is appropriate, because even low hazard firms may have a few high hazard jobs that merit attention. OSHA welcomes comments on approaches that would exempt some operations from the standard's coverage based on a well-supported demonstration that employees in those firms are not at significant risk of incurring a MSD.

Alterative 21: Phased Implementation. The SBREFA Panel recommended that OSHA consider the possibility of phasing in implementation of the proposed standard. OSHA has adopted a phased implementation approach in the proposed rule that allows periods of from one to three years after the effective date of the rule for the implementation of various program elements. For example, establishments are permitted three years to implement permanent engineering controls. In addition, reliance on the one MSD trigger ensures that problem jobs are addressed gradually over time; a more proactive approach would be likely to require all problem jobs to be addressed immediately. These features of the proposed rule combine to ensure that small establishments will only be required to address problem jobs gradually. OSHA therefore believes that the proposed rule is fully responsive to this Panel recommendation.

Alternative 22: Adopt a Safety and Health Program Rule to Cover Ergonomics. OSHA is currently considering proposing a safety and health program rule that would require all establishments in general industry to set up safety and health programs to address hazards covered by existing OSHA standards and the General Duty Clause of the Act. Because there is currently no OSHA ergonomics standard or any other standard addressing work-related MSDs, the safety and health program rule would only address those MSDs that are presently covered by the General Duty Clause. In addition, because the safety and health program rule covers safety and health hazards of all kinds, the provisions it contains are necessarily general. Given that MSDs constitute one-third of all lost workday injuries and illnesses, OSHA feels that employers need more specific direction on how to address MSDs than would be provided through the general safety and health program rule.

In addition, OSHA's experience with the Maine 200 program, which encouraged firms with high numbers of injuries and illnesses to establish safety and health programs, has shown that the establishment of such programs does not necessarily ensure that MSDs will be adequately addressed. Although some firms incorporated ergonomics into their safety and health programs, many firms in the Maine 200 program established programs designed to address traditional safety concerns, but failed to address ergonomics problems at all. OSHA believes that an ergonomics program standard is essential if all general industry firms are to begin to address their ergonomics problems.

6. Responses to the SBREFA Panel Report

Because OSHA anticipated that this proposed standard would cause significant impacts on a substantial number of small entities, the Agency convened a SBREFA Panel as required by that Act. Table VII-8 lists the recommendations of the SBREFA Panel and indicates how OSHA has responded to these recommendations.

Table VII-8. Summary of SBREFA Panel Recommendations and OSHA Responses

SBREFA Panel Recommends that:	OSHA's Response
OSHA review its cost estimates in light of these comments, with specific attention to those comments that offered alternative cost and hour estimates or explanations of why the commenters believed the costs to be underestimated and to those areas of the program highlighted by the SERs and the Panel as major cost issues (training, consulting costs, medical removal protection, job hazard analysis, job control). This review, with a presentation of the estimates provided by the SERs, should be included as part of a revised IRFA.	OSHA has commented on the SERs' cost estimates in detail in the Cost Chapter (Chapter V) of this economic analysis. OSHA has since reviewed its costs and has obtained expert review of the Agency's estimated costs. In several cases, the costs now shown in the analysis, such as those for job control and consultants, have been revised upward.
A similar presentation [to that for costs] of the assumptions underlying benefits estimates be included.	OSHA has added a discussion to the IRFA providing a schematic outline of the assumptions underlying the benefits analysis.
OSHA discuss the sources and bases of these assumptions, significant alternative assumptions, and the reasons OSHA selected the proposed assumptions.	OSHA has added this discussion to the IRFA.
OSHA reexamine its estimates of the average number of persons in similar jobs (see below for specific recommendation to modify the term "similar job"), and how this estimate may impact overall costs.	OSHA has revised both the proposed standard and its approach to measuring the number of jobs affected when an MSD occurs. OSHA has also changed the term to "same jobs" for clarity.
OSHA examine its cost estimates to be sure that it has adequately accounted for the burden on firms who do not have an MSD and are not required to have a basic program. This examination should include an examination of the costs of determining whether an MSD is work-related.	OSHA has added costs to its estimated costs of compliance to reflect that even establishments that do not fall within the scope of the standard will incur costs to familiarize themselves with the standard and determine that they are not covered.
OSHA consider whether the Agency's analysis may have underestimated the need for help from outside consultants and that OSHA examine the necessity for, and cost and availability of, the services of ergonomic consultants.	OSHA has reviewed its estimates of the need for consultants and special expertise, and has revised upward both its estimate of the time required for employers to select necessary job controls, the percentage of time consultants will be needed, and the costs associated with consultant services.
OSHA consider the extent to which small firms can pass along any price increases to consumers or might experience feasibility problems if such costs could not be passed along.	This issue is addressed in the economic impact section of the Preliminary Economic Analysis (Chapter VII).
OSHA assess the SERs' statements [concerning selective hiring] as part of its analysis, consider how to mitigate any potential that may exist for expanding such selective hiring incentives or creating new ones, and solicit comment on these issues.	This issue is addressed in the Preamble to the proposed standard (in Section XI) and has been raised as an issue for comment.
OSHA assess these data [on increases in the number of injuries and illnesses as a result of programs] as part of its analysis. In addition, OSHA provide additional data to support its arguments about the costs and cost-savings implications of these programs and specifically address any potential effects of medical removal protection in encouraging workers to remain off work.	OSHA has reviewed the responses employers made to the Agency's ergonomics survey, and found that even in the first year of a program, firms typically have fewer rather than more MSDs. As discussed in the benefits section of the economic analysis (Chapter IV), OSHA estimates that the work restriction protection provision (formerly the medical removal protection provision) will help to counter the disincentives to employees to report MSDs early.
OSHA conduct the analysis at a level of detail that does not mask the relevant economic differences among industries through aggregation.	OSHA has revised its analysis to conduct the analysis at the three rather than the two digit SIC Code level of detail.
OSHA review whether small businesses would need consultants for other elements of the program, whether they may be necessary in a greater percentage of cases, and to what degree these factors would alter cost estimates.	As discussed in the cost analysis, OSHA has reviewed whether consultants would be needed for other elements of the program and found that consultants will not be needed, given the materials available on how to set up a program.
OSHA evaluate the usefulness of checklists for these purposes. In the event OSHA develops checklists for its own enforcement personnel, it should make these checklists available to the public.	This issue is discussed in the Preamble and is raised as an issue for comment.
OSHA should either consider alternative approaches to this issue [the trigger criteria for a full program] or clarify these criteria.	Both the Preamble to the proposed standard and the IRFA provide discussions of alternative trigger provisions.
OSHA clarify that employers may, if they wish, rely on a physician's opinion in making a work- relatedness determination, and that OSHA would bear the burden of proof if it disagreed with such an opinion.	This issue is discussed in the Preamble.
OSHA clarify and consider alternatives to this trigger [known hazards] (these are discussed in the Alternatives Section at the end of this report), and that OSHA assure that any provision it adopts would not create disincentives to the proactive identification of ergonomic hazards.	OSHA has deleted the 'known hazards' provision and is instead relying on a persistent-symptoms-plus-supporting information trigger in manufacturing and manual handling jobs.
OSHA seek ways to clarify, explain, and provide examples of these terms [key terms used in the reg text].	The Preamble to the proposed standard provides additional definitions and examples of the key terms used in the regulatory text.
OSHA clarify the idea of similar jobs and use a more precise term, such as "similar work activities," in light of SER comments that all or a portion of employees sometimes engage in all or a portion of the work activities in the establishment. In addition, OSHA provide in the regulatory document examples of which similar work activities would or would not be covered by the standard.	The concept of "similar" jobs has been deleted from the proposed rule and been replaced with "same" jobs, which are defined in terms of the same work activities.
OSHA clarify that the draft proposed rule only requires the employer to control hazards to the extent feasible for that firm, using the normal OSH Act definition of feasibility (i.e., "Is it capable of being done"), discuss in the preamble the factors that go into that determination, and seek ways to include such explanatory information in the preamble, outreach, and compliance assistance materials.	The technological feasibility chapter of the economic analysis discusses this issue, as does the Job Hazard Analysis and Control section of the preamble.
Definitions of personal protective equipment and engineering controls be added to the proposed standard, with ergonomic examples that help to explain how they differ.	Definitions of these terms, with examples, have been added to the regulatory text.
OSHA discuss the issue of adequate control and provide examples. In addition, OSHA clarify the meaning of the proposed rule so that employers will have a better idea of when they have done enough to comply with the standard. Examples should be added to the preamble to further clarify this point.	Examples of adequate control have been provided in the technological feasibility section of the economic analysis and are discussed in the Preamble as well. In addition, the regulatory text now includes a step-by-step incremental abatement process.
The proposed standard be modified to clarify the requirement for program evaluations. Such modifications should reflect the flexibility of employers to use non-quantitative measures, quantitative measures, or a combination of these to evaluate their ergonomics programs.	This issue has been clarified in the regulatory text and the Preamble.
If MRP is included in the proposed rule, OSHA explain in the preamble how the proposed provision interacts with state workers' compensation laws and why OSHA believes the rule's MRP provision is not in conflict with Section 4(b)(4) of the OSH Act, and solicit comment on this issue.	OSHA has an extensive discussion of Work Restriction Protection in the Preamble, including a discussion of the relationship between WRP and workers' compensation.
OSHA draft the proposed rule to achieve these objectives [of EEO laws, the ADA and ADEA]	These issues are discussed in the Preamble to the proposed standard.
OSHA address how the ergonomics program accommodates the requirements of the ADA. Also, OSHA seek to minimize any unintended consequences of the rule that might undermine the protections afforded under the ADA, as well as the ADEA.	This issue is addressed in the Preamble to the proposed standard.
OSHA draft the proposed rule to achieve these objectives [of the NLRA] and discuss and give examples of employee participation mechanisms that would allow employers to be in full compliance with both the NLRA and the proposed rule.	OSHA has added this material to the Preamble.
OSHA ensure that the two rules [the ergonomics proposal and the safety and health program proposal] are developed in a way that allows an employer's ergonomics program to be an integral part of that employer's general safety and health program and to avoid duplicative requirements or recordkeeping (for example, by making clear that an ergonomics program can be part of an effective safety and health program). In addition, the economic analyses supporting the two rules be compatible and not double count either costs or benefits. In addition, that OSHA ensure consistency between relevant definitions in their upcoming revision of the recordkeeping rule and the proposed ergonomics standard.	OSHA is developing the two rules so they will be compatible. Because this rule precedes the safety and health program rule, the benefits and costs for this rule have not considered possible overlaps with the safety and health program rule. OSHA has ensured consistency between the definitions of "MSD" and "recordable" in this proposed ergonomics rule and the recordkeeping rule.
OSHA further explain its non-regulatory guidance efforts to date, the basis for its belief that a significant risk remains, and why it believes a proposed rule is now appropriate to reduce that risk. The Panel recommends that OSHA solicit comments on the need for a rule and on the effectiveness of non-regulatory approaches.	Discussions of these topics are included in the Preamble and in the IRFA.
OSHA discuss whether a safety and health program rule would adequately address MSDs, thereby eliminating the need for a separate ergonomics rule.	A discussion of this topic has been included in the IRFA.
OSHA explain why it does not wish to delay this proposed regulatory action until that time [when the second NAS study is completed] , and consider any available results of the NAS study that are in the record of the final rule.	This topic is discussed in the Preamble to the proposed standard.
OSHA consider phased implementation, allowing additional time for small employers and/or employers in particular industries where feasibility may be a concern.	A discussion of phased implementation has been included in the Preamble to the proposed rule and in the discussion of alternatives in the IRFA.
In addition to OSHA's proposed trigger of one work-related MSD, where regular work activities expose the employee to hazards likely to cause or contribute to that MSD, OSHA analyze and consider a variety of alternative triggers, paying special attention to: A trigger using multiple work-related MSDs over a time frame that might exceed one year; and Staged implementation of program elements based on multiple work-related MSDs. In addition, the Panel recommends that OSHA look at other types of triggers, including lost workday MSDs, MSD rates, numbers of MSDs or MSD rates for different sizes of firms and different periods of time, as well as the use of a checklist to determine the presence of a hazard.	A discussion of trigger alternatives has been added to the IRFA.
OSHA consider this issue [the known hazard provision] and ensure that any provision it adopts would avoid disincentives to identify hazards. In addition, OSHA consider not including this provision in the proposed rule.	OSHA had deleted the provision about known hazards.
The proposed rule clearly indicate which manual handling and other operations are included in the proposed rule and which are excluded from it.	The regulatory text and definitions section clearly delineate which operations are included and which are excluded, and the Preamble also clarifies this issue.
OSHA continue to analyze and solicit comments on the alternatives of limiting the proposed standard to manufacturing only, and to manufacturing and manual handling only.	The preamble and the IRFA continue to solicit comment on these issues, and the IRFA considers these alternatives.
OSHA pay particular attention to the following issues related to MRP (now called WRP): Determine whether the evidence indicates that MRP or other provisions are necessary to achieve the goal of prompt and complete reporting of MSDs. The Panel realizes that, as with any other decision, OSHA's final determination of whether MRP is necessary must be based on substantial evidence in the standard's record considered as a whole. In addition, recommend that OSHA solicit comment on the alternative of excluding MRP from the rule; If MRP or another provision is necessary, examine whether the purposes of MRP could be met with a more limited form of MRP, such as a shorter time limit for MRP coverage, a smaller percentage of income replacement, or recognition of a feasibility limitation on MRP at the firm level, such as that used in OSHA's Methylene Chloride standard; Assess whether alternatives other than MRP would be as effective in achieving the goals of prompt and complete reporting, such as alternatives that may not involve payments to employees; and Examine whether MRP should be phased in over a period of time. Some SERs also expressed concern that, as currently drafted, OSHA's regulatory language could be interpreted as providing injured employees on MRP with more take-home pay than they would have had before the injury. The Panel recommends that, if a form of MRP is included in the proposed rule, OSHA make it clear that MRP will not result in higher take-home income for removed employees than they would otherwise have received.	OSHA has modified the provision to require a lower percentage of take-home pay for workers absent from work. These issues are discussed in detail both in the Preamble and the IRFA.

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Bureau of the Census [DOC,1996]. U.S. Department of Commerce, CD-ROM issued November 1996. Ex. 28-6

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Cannon LJ, Bernacki EJ, Walter SD [1981]. Personal and occupational factors associated with carpal tunnel syndrome. J Occup Med 23(4):255-258. Ex. 26-1212

Cohen, A.L., Gjessing, C.C., Fine, L.J., Bernard, B.P., McGlothlin, J.D. [Cohen, et al,1997]. Elements of Ergonomics Programs A Primer Based on Workplace Evaluations of Musculoskeletal Disorders. Cincinnati, OH: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health. DHHS(NIOSH) Publication No. 97-117. Ex. 26-2

Eastern Research Group. [ERG, 1999]. Description of Cost Estimates of Ergonomic Controls Under Draft OSHA Ergonomics Standard Lexington, MA. 1999. Ex. 28-7

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