Businesses and contractors often gripe about how much regulations and safety inspections cost them, but researchers are saying that it does not actually affect a company’s bottom line at all. A study recently published in the journal Science studied work sites in California subject to random inspections over the last decade. According to researchers, companies and contractors were able to reduce their injury claims by 9.4 percent versus those without inspections, with no negative impact on profits and sales.
The same study revealed the companies saved 26 percent on costs in workers compensation claims in the four years following an inspection by the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA).
“These inspections ironically appear to be creating value for the firms that they visiting in terms of reduced workers’ comp costs and frequency of injuries,” said Michael Toffel, co-author of the study and professor at Harvard Business School.
The savings take into account workers who are sick and injured and lost productivity, which outweighs the federal fines. Marc Freedman, executive director of labor law policy for the U.S. Chamber of Commerce said that business owners who follow safety regulations generally have no problem with the inspections.
“It’s more a question of how those inspections are conducted and what the relationship is between the inspector and the employer is,” Freedman says. Freedman added that under the Obama administration, OSHA approaches site and facility inspections “with much more of a gotcha mentality, determined to find the maximum penalties possible.”
The study suggests that there is a decrease in injuries following an OSHA inspection because the inspectors talk with site managers and business owners to make sure they understand exactly what the problem is and the best way to fix it.
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