Rule2024-08568
Hazard Communication Standard
Primary source
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Published
May 20, 2024
Effective
July 19, 2024
Issuing agencies
Labor DepartmentOccupational Safety and Health Administration
Abstract
OSHA is amending the Hazard Communication Standard (HCS) to conform to the United Nations' Globally Harmonized System of Classification and Labelling of Chemicals (GHS), primarily Revision 7 (Rev. 7), address issues that arose during the implementation of the 2012 update to the HCS, and provide better alignment with other U.S. agencies and international trading partners, while enhancing the effectiveness of the standard. Consistent with Executive Order 13563 and the Regulatory Flexibility Act, which call for assessment and, where appropriate, modification and improvement of existing rules, OSHA has reviewed the existing HCS. The agency has determined that the revisions in this final rule will enhance the effectiveness of the HCS by ensuring employees are appropriately apprised of the chemical hazards to which they may be exposed, thus reducing the incidence of chemical-related occupational illnesses and injuries. The modifications to the standard include revised criteria for classification of certain health and physical hazards, revised provisions for updating labels, new labeling provisions for small containers, new provisions related to trade secrets, technical amendments related to the contents of safety data sheets (SDSs), and related revisions to definitions of terms used in the standard.
Full Text
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[Federal Register Volume 89, Number 98 (Monday, May 20, 2024)]
[Rules and Regulations]
[Pages 44144-44461]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08568]
[[Page 44143]]
Vol. 89
Monday,
No. 98
May 20, 2024
Part IV
Department of Labor
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Occupational Safety and Health Administration
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29 CFR Part 1910
Hazard Communication Standard; Final Rule
Federal Register / Vol. 89, No. 98 / Monday, May 20, 2024 / Rules and
Regulations
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DEPARTMENT OF LABOR
Occupational Safety and Health Administration
29 CFR Part 1910
[Docket No. OSHA-2019-0001]
RIN 1218-AC93
Hazard Communication Standard
AGENCY: Occupational Safety and Health Administration (OSHA), Labor.
ACTION: Final rule.
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SUMMARY: OSHA is amending the Hazard Communication Standard (HCS) to
conform to the United Nations' Globally Harmonized System of
Classification and Labelling of Chemicals (GHS), primarily Revision 7
(Rev. 7), address issues that arose during the implementation of the
2012 update to the HCS, and provide better alignment with other U.S.
agencies and international trading partners, while enhancing the
effectiveness of the standard. Consistent with Executive Order 13563
and the Regulatory Flexibility Act, which call for assessment and,
where appropriate, modification and improvement of existing rules, OSHA
has reviewed the existing HCS. The agency has determined that the
revisions in this final rule will enhance the effectiveness of the HCS
by ensuring employees are appropriately apprised of the chemical
hazards to which they may be exposed, thus reducing the incidence of
chemical-related occupational illnesses and injuries. The modifications
to the standard include revised criteria for classification of certain
health and physical hazards, revised provisions for updating labels,
new labeling provisions for small containers, new provisions related to
trade secrets, technical amendments related to the contents of safety
data sheets (SDSs), and related revisions to definitions of terms used
in the standard.
DATES: This final rule is effective July 19, 2024. The incorporation by
reference of certain publications listed in this final rule is approved
by the Director of the Federal Register as of July 19, 2024. The
incorporation by reference of certain other publications listed in the
rule was approved by the Director as of July 15, 2019.
ADDRESSES: In compliance with 28 U.S.C. 2112(a), the agency designates
Edmund C. Baird, Associate Solicitor for Occupational Safety and
Health, Office of the Solicitor, Room S-4004, U.S. Department of Labor,
200 Constitution Avenue NW, Washington, DC 20210, as the recipient of
petitions for review of this final rule.
Docket: To read or download comments or other material in the
docket, go to Docket No. OSHA-2019-0001 at <a href="http://www.regulations.gov">www.regulations.gov</a> index;
however, some information (e.g., copyrighted material) is not publicly
available to read or download through that website. All comments and
submissions, including copyrighted material, are available for
inspection through the OSHA Docket Office. Documents submitted to the
docket by OSHA or stakeholders are assigned document identification
numbers (Document ID) for easy identification and retrieval. The full
Document ID is the docket number plus a unique four-digit code. For
example, the Document ID number for the 2021 HCS Notice of Proposed
Rulemaking (NPRM) is OSHA-2019-0001-0258. Some Document ID numbers also
include one or more attachments.
When citing exhibits in the docket, OSHA includes the term
``Document ID'' followed by the last four digits of the Document ID
number. For example, document OSHA-2019-0001-0258 would appear as
Document ID 0258. Citations may also include the attachment number
(designated ``Att.'') or other attachment identifier, if applicable,
page numbers (designated ``p.'', or ``Tr.'' for pages from a hearing
transcript), and in a limited number of cases a footnote number
(designated ``Fn.'').
This information can be used to search for a supporting document in
the docket at <a href="http://www.regulations.gov">www.regulations.gov</a>. Contact the OSHA Docket Office at
(202) 693-2350 (TTY number: 877-889-5627) for assistance in locating
docket submissions.
FOR FURTHER INFORMATION:
For press inquiries: Contact Frank Meilinger, Director, Office of
Communications, Occupational Safety and Health Administration, U.S.
Department of Labor; telephone: (202) 693-1999; email:
<a href="/cdn-cgi/l/email-protection#4528202c292c2b2220376b2337242b262c367705212a296b222a33"><span class="__cf_email__" data-cfemail="8ae7efe3e6e3e4edeff8a4ecf8ebe4e9e3f9b8caeee5e6a4ede5fc">[email protected]</span></a>.
For general information and technical inquiries: Contact Tiffany
DeFoe, Director, Office of Chemical Hazards--Metals, Directorate of
Standards and Guidance, Occupational Safety and Health Administration,
U.S. Department of Labor; telephone: (202) 693-1950; email:
<a href="/cdn-cgi/l/email-protection#1b7f7e7d747e356f727d7d7a75625b7f7477357c746d"><span class="__cf_email__" data-cfemail="06626360696328726f606067687f4662696a28616970">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Executive Summary
II. Introduction
III. Events Leading to the Revised Hazard Communication Standard
IV. Need and Support for the Revised Hazard Communication Standard
V. Pertinent Legal Authority
VI. Final Economic Analysis and Regulatory Flexibility Analysis
VII. OMB Review Under the Paperwork Reduction Act of 1995
VIII. Federalism
IX. State Plans
X. Unfunded Mandates Reform Act
XI. Protecting Children From Environmental Health and Safety Risks
XII. Environmental Impacts
XIII. Consultation and Coordination With Indian Tribal Governments
XIV. Summary and Explanation of the Final Rule
XV. Issues and Options Considered
List of Subjects in 29 CFR Part 1910
Authority and Signature
I. Executive Summary
The Globally Harmonized System of Classification and Labelling of
Chemicals (GHS) has been implemented around the world. In 2012, OSHA
revised its Hazard Communication Standard (HCS), 29 CFR 1910.1200, to
align with Revision 3 (Rev. 3) of the GHS (77 FR 17574). However, the
GHS is updated with improvements and clarifications every two years.
This rulemaking amends the HCS primarily to align with Revision 7 (Rev.
7) of the GHS, published in 2017, where appropriate. OSHA is also
finalizing updates to address specific issues that have arisen since
the 2012 rulemaking and to provide better alignment with other U.S.
agencies and international trading partners, while enhancing the
effectiveness of the standard. This action is consistent with Executive
Order 13563, ``Improving Regulation and Regulatory Review'' (January
18, 2011), and the Regulatory Flexibility Act (5 U.S.C. 601 et seq.)
which require retrospective analysis of rules that may be out-of-date,
ineffective, or excessively burdensome.
OSHA is required by the Occupational Safety and Health Act of 1970
(OSH Act) (29 U.S.C. 651 et seq.) to assure, as far as possible, safe
and healthful working conditions for workers. As part of this effort,
OSHA first promulgated the HCS in 1983 to provide a standardized
approach to workplace hazard communication associated with exposure to
hazardous chemicals. The HCS requires chemical manufacturers or
importers to classify the hazards of chemicals they produce or import.
It also requires all employers to provide information to their
employees about the hazardous chemicals to which they are exposed, by
means of a hazard communication program, labels and other forms of
warning, safety data sheets (SDSs), and information and training. This
final rule
[[Page 44145]]
does not change the fundamental structure of the HCS.
OSHA has determined that the amendments to the HCS contained in
this final rule enhance the effectiveness of the standard by ensuring
that employees are appropriately apprised of the chemical hazards to
which they may be exposed. The modifications to the standard include
revised criteria for classification of certain health and physical
hazards to better capture and communicate the hazards to downstream
users; revised provisions for labels (including provisions addressing
the labeling of small containers and the relabeling of chemicals that
have been released for shipment); amendments related to the contents of
SDSs; and new provisions relating to concentrations or concentration
ranges being claimed as trade secrets.
Additionally, in accordance with Executive Orders 12866 and 13563,
the Regulatory Flexibility Act, and the Unfunded Mandates Reform Act (2
U.S.C. 1501 et seq.), OSHA has prepared a Final Economic Analysis
(FEA), including a Final Regulatory Flexibility Analysis Certification,
for the final modifications to the HCS (see the full FEA in Section VI
of this notice). Supporting materials prepared by OSHA, such as cost-
estimate spreadsheets, are available in the public docket for this
rulemaking, Docket ID OSHA-2019-0001, through <a href="http://www.regulations.gov">www.regulations.gov</a>.
In the FEA, OSHA estimates that, annualized at a 7 percent discount
rate, the final rule would result in net cost savings of $29.8 million
per year, as shown in Table ES-1 below (a summary of annualized costs
by affected industry). Annualized at a 3 percent discount rate, OSHA
estimates that the final rule would result in net cost savings of $30.7
million per year. OSHA also expects that the final revisions to the HCS
will result in modest improvements in worker health and safety above
those already being achieved under the current HCS, but the agency was
unable to quantify the magnitude of these health and safety benefits
(see Section VI.D: Health and Safety Benefits and Unquantified Positive
Economic Effects).
BILLING CODE 4510-26-P
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[GRAPHIC] [TIFF OMITTED] TR20MY24.135
BILLING CODE 4510-26-C
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II. Introduction
This preamble includes a review of the events leading to the final
rule, a discussion of the reasons why OSHA finds these modifications to
the HCS necessary, the final economic analysis and regulatory
flexibility analysis for the standard, and an explanation of the
specific revisions OSHA is making to the standard.
Section XIV: Summary and Explanation of the Final Rule is organized
by paragraph of regulatory text affected by this update, followed by
the appendices to the regulatory text. Stakeholders can examine the
redline strikeout of the regulatory text (changes from 2012 HCS to this
final) at OSHA's HCS web page (<a href="https://www.osha.gov/dsg/hazcom/">https://www.osha.gov/dsg/hazcom/</a>) to
view all of the changes to the 2012 HCS made in this final rule.
III. Events Leading to the Revised Hazard Communication Standard
OSHA first promulgated the HCS in 1983, covering only the chemical
manufacturing industry (48 FR 53280). The purpose of the standard was
to provide a standardized approach for communicating workplace hazards
associated with exposure to hazardous chemicals. OSHA updated the HCS
in 1987 to expand coverage to all industries where workers are exposed
to hazardous chemicals (52 FR 31852). In 1994, OSHA promulgated an
additional update to the HCS with technical changes and amendments
designed to ensure better comprehension and greater compliance with the
standard (59 FR 6126). In adopting the original HCS in 1983, the agency
noted the benefits of an internationally harmonized chemical hazard
communication standard (48 FR 53287), and actively participated in
efforts to develop one over the subsequent decades. In 2012, the agency
officially harmonized the HCS with the third revision of the GHS
(Document ID 0085) (77 FR 17574).
On February 16, 2021, OSHA published a Notice of Proposed
Rulemaking (NPRM) to modify the HCS, to bring it into alignment with
the seventh revision of the GHS (Document ID 0060) (86 FR 9576), to
address specific issues that have arisen since the 2012 rulemaking, and
to provide better alignment with other U.S. agencies and international
trading partners. On September 21-23, 2021, the agency held an informal
public hearing to gather additional input from interested stakeholders.
OSHA received more than 170 public submissions (e.g., written comments,
exhibits, and briefing materials) during the public comment period.
This rulemaking finalizes the amendments proposed in 2021 with
modifications based on stakeholder input through the public comment
process.
The HCS requires periodic revision to maintain consistency with the
GHS and incorporate the progression of scientific principles and best
approaches for classification and communication of workplace hazards
related to hazardous chemical exposure. Several international and
domestic activities have impacted the direction of the HCS and led to
the updates of this rule, including international negotiations at the
United Nations (UN), coordination with other U.S. agencies, OSHA's
participation in the U.S.-Canada Regulatory Cooperation Council (RCC)
with Health Canada, and information OSHA has received from HCS
stakeholders. Below, the agency provides information on the events that
have occurred since promulgation of the 2012 HCS, with additional
information on the development of the GHS and its relationship to the
HCS, and explains the impetus for this rule.
A. International Events Affecting the Standard
The evolution of what was to become the GHS had its early
beginnings with the work started in 1956 by the UN Economic and Social
Council Committee of Experts on the Transport of Dangerous Goods (TDG)
and continued in the 1990s through the UN Conference on Environment and
Economic Development (UNCED), the UN International Labour Organization
(ILO), and the Organization for Economic Cooperation and Development
(OECD) (Document ID 0053). The overarching goal was to provide an
internationally harmonized system to convey information to workers,
consumers, and the general public on the physical, health, and
environmental effects of hazardous chemicals across the globe, as well
as to provide a foundation for the safe management of those chemicals.
Finalized by the UN in 2002, the GHS is intended to harmonize
elements of hazard communication, including SDSs and labels, by
providing a unified classification system of chemicals based on their
physical and health-related hazards. The GHS is updated and revised
every two years based on information and experience gained by
regulatory agencies, industry, and non-governmental organizations
(Document ID 0052).
Since OSHA's adoption of Rev. 3 in 2012, the GHS has been updated
six times; the latest revision, Rev. 9, was published in July 2021
(<a href="https://unece.org/transport/standards/transport/dangerous-goods/ghs-rev9-2021">https://unece.org/transport/standards/transport/dangerous-goods/ghs-rev9-2021</a>). Updates to the GHS in Rev. 4 (2011) included changes to
hazard categories for chemically unstable gases and non-flammable
aerosols and updates to, and clarification of, precautionary statements
(Document ID 0240). Changes in Rev. 5 (2013) included a new test method
for oxidizing solids; miscellaneous provisions intended to further
clarify the criteria for some hazard classes (skin corrosion/
irritation, severe eye damage/irritation, and aerosols) and to
complement the information to be included in the SDS; revised and
simplified classification and labeling summary tables; a new
codification system for hazard pictograms; and revised precautionary
statements (Document ID 0241). Rev. 6 (2015) included a new hazard
class for desensitized explosives and a new hazard category for
pyrophoric gases; miscellaneous provisions intended to clarify the
criteria for some hazard classes (explosives, specific target organ
toxicity following single exposure, aspiration hazard, and hazardous to
the aquatic environment); additional information to be included in
Section 9 of the SDS; revised precautionary statements; and a new
example in Annex 7 addressing labelling of small packages (Document ID
0197). Changes in Rev. 7 (2017) included revised criteria for
categorization of flammable gases within Category 1; miscellaneous
amendments intended to clarify the definitions of some health hazard
classes; additional guidance regarding the coverage of Section 14 of
the SDS (which is non-mandatory under the HCS); and a new example in
Annex 7 addressing labeling of small packages with fold-out labels
(Document ID 0094). Rev. 8 (2019) added a table for the classification
criteria versus only relying on the decision logics for chemicals under
pressure; minor changes to precautionary statements for skin irritation
and serious eye damage; new provisions for use of non-animal test
methods for the skin irritation/corrosion hazard class; and new
precautionary pictograms for ``keep out of reach of children''
(Document ID 0065). Rev. 9 (2021) included changes to chapter 2.1 to
better address explosive hazards when not in transport, revisions to
decision logics, revisions to Annex 1--classification and labeling
summary tables, revisions to precautionary statements, and updates to
OECD test guidelines in Annexes 9 and 10 (https://unece.org/transport/
standards/
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transport/dangerous-goods/ghs-rev9-2021).
I. U.S. Participation at the United Nations and Interagency
Coordination
OSHA leads the U.S. Interagency GHS Coordinating Group, an
interagency group that serves as a U.S. delegation to the UN
(``Interagency Group''). The Interagency Group works to ensure that
modifications to the GHS continue to reflect U.S. agencies' key
priorities and do not conflict with U.S. hazard communication and
associated requirements. The group meets regularly to discuss issues
related to the domestic implementation of the GHS, as well as
international work being done at the UN Sub-Committee of Experts on the
GHS (UNSCEGHS). It consists of representatives from OSHA, the
Department of State, the Department of Transportation (DOT), the
Environmental Protection Agency (EPA), the U.S. Coast Guard, the
Consumer Product Safety Commission (CPSC), the Department of Energy
(DOE), the Department of Defense (DOD), the Bureau of Alcohol, Tobacco,
Firearms and Explosives (ATF), and other agencies as appropriate. To
date, OSHA is the only U.S. agency to have implemented the GHS,
although CPSC regulations contain elements of the GHS (e.g.,
precautionary statements) (Document ID 0175). EPA (which initiated the
U.S. working group) finalized changes to its regulations governing
significant new uses of chemical substances under the Toxic Substances
Control Act (TSCA) that would align with the HCS and the GHS as well as
with OSHA's respiratory protection standard (29 CFR 1910.134) and
National Institute for Occupational Safety and Health (NIOSH)
respirator certification requirements (87 FR 39756).
II. U.S.-Canada Coordination
An additional international activity impacting the HCS is OSHA's
participation in the RCC. The RCC was established in 2011 to promote
economic growth, job creation, and other benefits through increased
regulatory coordination and transparency between the U.S. and Canada
(Document ID 0057; 0199). In June 2018, U.S.-Canada RCC principles were
reaffirmed through a memorandum of understanding between the U.S.
Office of Information and Regulatory Affairs (OIRA) within the White
House Office of Management and Budget (OMB) and the Treasury Board of
Canada. Since the RCC's inception, OSHA and Health Canada, Canada's
corresponding governmental agency, have developed joint guidance
products and consulted on respective regulatory activities. In keeping
with the RCC's goal of regulatory cooperation, this final rule contains
several updates to the HCS that will align with Canada's Hazardous
Products Regulations (HPR), such as changes to exemptions for labeling
small containers and using prescribed concentration ranges when
claiming trade secrets (Document ID 0051).
B. Stakeholder Engagement
Since updating the HCS in 2012, OSHA has engaged stakeholders in
various ways in order to keep them apprised of changes to the GHS that
may have an impact on future updates to the HCS, as well as to gather
information about stakeholders' experience implementing the standard.
For example, in November 2016, OSHA convened a meeting to inform the
public that OSHA was beginning rulemaking efforts to maintain alignment
of the HCS with more recent revisions of the GHS (International/
Globally Harmonized System (GHS), Docket No. OSHA-2016-0005). Meeting
attendees discussed topics and issues that OSHA should consider during
the rulemaking. In addition, attendees provided suggestions as to the
types of publications (such as guidance products) that would be helpful
in complying with the standard and the topics they would like OSHA to
address in future compliance assistance materials.
OSHA has also engaged stakeholders through Interagency Group public
meetings held prior to each UNSCEGHS Session to discuss the issues and
proposals being presented at the UN. During this forum, stakeholders
have the opportunity to provide comments regarding the various
proposals under discussion. Stakeholders are also able to provide
comments on these proposals in writing via OSHA's docket for
International/Globally Harmonized System (GHS) (Docket No. OSHA-2016-
0005). The Interagency Group considers the comments and information
gathered at these public meetings and in the docket when developing the
U.S. position on issues before the UN.
Additionally, in December 2018, the RCC held a stakeholder forum in
Washington, DC. The purpose of the forum was to ``bring together senior
regulatory officials, industry, and other interested members of the
public from both sides of the border to discuss recent accomplishments
and new opportunities for regulatory cooperation'' (Document ID 0057).
OSHA led the session regarding chemicals management and workplace
chemicals.
C. OSHA Guidance Products, Letters of Interpretation, and Directives
Since OSHA's publication of the 2012 HCS update, the agency has
published guidance documents, issued letters of interpretation (LOIs),
and implemented an enforcement directive. These guidance documents are
available at: <a href="https://www.osha.gov/dsg/hazcom/guidance.html">https://www.osha.gov/dsg/hazcom/guidance.html</a>. OSHA will
continue to develop guidance documents to assist employers and
employees with their understanding of the HCS.
OSHA has issued several LOIs in response to questions from the
regulated community. These LOIs provide clarification on provisions in
the 2012 update to the HCS and how they apply in particular
circumstances. Some of the major issues covered in the LOIs include the
labeling of small containers, the labeling of chemicals released for
shipment, and the use of concentration ranges for trade secrets. OSHA's
LOIs on the HCS may be found at <a href="https://www.osha.gov/laws-regs/standardinterpretations/standardnumber/1910/1910.1200%20-%20Index/result">https://www.osha.gov/laws-regs/standardinterpretations/standardnumber/1910/1910.1200%20-%20Index/result</a>. Several of the updates in this final rule clarify specific
elements of the enforcement guidance the agency has already provided in
LOIs and the directive. The agency anticipates publishing an updated
directive to provide guidance to OSHA compliance officers; however, the
2015 directive is still in force until rescinded or updated (Document
ID 0007).
OSHA requested comments in the NPRM on types of guidance documents
that the public may find useful to understand the updated HCS. The
American Society of Safety Professionals (ASSP) suggested that OSHA
``create training modules focused on the changes to the HCS once the
rule is finalized'' (Document ID 0284, p. 2). Hugo Hidalgo suggested
that the agency ``leverage technology to effectively communicate
hazards of chemicals to customers and end-users once the information
becomes available'' (Document ID 0297, p. 4). Other comments received
in response to OSHA's request for comments on guidance documents are
highlighted in Section XV., Issues and Options Considered. OSHA has
considered all requests for guidance and is evaluating the best
approaches to implement those requests and suggestions.
IV. Need and Support for the Revised Hazard Communication Standard
Hazardous chemical exposures in workplaces in the United States
present
[[Page 44149]]
a serious and ongoing danger to workers. Acute and chronic exposures to
hazardous chemicals in the workplace can have serious health
consequences. As described in the 2012 HCS, chemical exposures are
either directly responsible for or contribute to serious adverse health
effects including cancer; heart, lung, reproductive, and immunological
diseases; hearing loss; and eye and skin damage (77 FR 17584). In
addition to health effects, exposure to hazardous chemicals can result
in physical hazards, such as fires, explosions, and other dangerous
incidents (77 FR 17584). Recognition of the significant risk posed by
these workplace hazards was the impetus for OSHA to promulgate the
original hazard communication standard in order to promote responsible
chemical management practices (48 FR 53282-53283).
Hazard communication is a fundamental element of sound chemical
management practices. As stated in the GHS, ``[a]vailability of
information about chemicals, their hazards, and ways to protect people,
will provide the foundation for national programmes for the safe
management of chemicals'' (Document ID 0060, p. iii). An anonymous
comment on the NPRM stated that ``[a]rming employers with this
information, since the 1980s, has undoubtedly reduced the potential
for, and severity of, chemical and toxic substance injuries and
illnesses, to include a reduced number of fatalities. Globally
harmonizing the system for classification and labeling across a big
part of the world was also beneficial as it provided consistency, and
more simplicity, especially for foreign products utilized
domestically'' (Document ID 0300, p. 1). The commenter went on to state
that ``[p]roviding safety and health information to product users is
imperative. Ultimately, this information equals a form of protection''
(Document ID 0300, p. 1).
OSHA recognized the importance of a robust hazard communication
strategy as early as the 1980s, when the agency first promulgated the
HCS (48 FR 53282-53284). The agency also recognized the need for a
global strategy and was instrumental in the development of the GHS (48
FR 53287). From its inception, OSHA indicated that the HCS would be
updated periodically to keep pace with the advancement of scientific
principles underlying the hazard determination process as well as
improvements in communication systems (48 FR 53287). In hearing
testimony and post-hearing briefs, NIOSH provided documentation
supporting the continual updating of occupational safety and health
information, stating that the ``process should be a never-ending loop
of research and translation, allowing for ongoing integration of
effective approaches'' (Document ID 0456, Att. 15, p. 4).
The ``research and translation'' described by NIOSH is at the heart
of the GHS and HCS process--continually evaluating and updating to
improve worker protections and make hazard communication clearer and
more effective for both workers and employers. In addition to directly
enhancing worker protections through improved hazard communication,
updating the HCS to maintain alignment with the GHS also improves the
availability of important information to support larger efforts to
address workplace hazards. Commenters on the NPRM recognized this
principle. For example, Ameren stated that the modifications to the HCS
``takes a positive approach in our efforts of eliminating risk events''
(Document ID 0309, p. 2). ASSP commented, ``[w]e believe that aligning
the HCS to international regulations is beneficial overall to the OSH
profession and our members will assist in ensuring employers use these
enhanced requirements to better protect their workers'' (Document ID
0284, p. 1). The following sections provide more detailed information
on the need for the updates being finalized in this final rule.
A. Maintaining Alignment With the GHS and Ensuring That the Standard
Reflects the Current State of Science and Knowledge on Relevant Topics
Periodic updates to the HCS are needed to maintain pace with the
general advancement of science, technology, and our understanding of
the processes involved in effective communication. As stated in a
report published by the ILO in 2008, ``[c]ontinuous improvement of
occupational safety and health must be promoted. This is necessary to
ensure that national laws, regulations, and technical standards to
prevent occupational injuries, disease, and deaths are adapted
periodically to social, technical, and scientific progress and other
changes in the world of work'' (ILO, 2008, Document ID 0181).\1\ While
the tools and protective measures in place to reduce or prevent
chemical-related occupational injuries and illnesses are effective,
such tools and systems become less effective as time goes by and new
technologies and workplace hazards emerge. Therefore, there is a need
for continual improvement in the systems and processes designed to
identify, communicate about, and reduce workplace exposures to chemical
hazards.
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\1\ The ILO and the World Health Organization (WHO) have also
adopted an evergreen approach to workplace hazard communication
(i.e., an approach that ensures systems for hazard communication
remain relevant and up-to-date). The ILO and WHO produce
international chemical safety cards (ICSC) and maintain a database
of approximately 1,700 data sheets designed to provide safety and
health information on hazardous chemicals in a format consistent
with the GHS. While not exactly like SDSs, ICSCs use phrases similar
to GHS precautionary statements to convey safety and health
information about workplace chemicals in a consistent,
internationally accessible manner. ICSCs also display classification
information (hazard pictograms, signal words, and hazard statements)
in line with GHS classification criteria--this information is added
during updates. With participation by experts from government
agencies around the world, including the U.S. (Centers for Disease
Control and Prevention (CDC)/NIOSH), Canada (Quebec-CNESST), Japan
(National Institute of Health Sciences), and several European
countries, ICSCs are prepared and periodically updated to account
for the most recent scientific developments. Due to the robust
process of preparation and peer review, the ICSCs are considered
authoritative in nature and a significant asset for workers and
health professionals across the globe, including in the United
States (ILO, 2019, Document ID 0069).
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The changes finalized in this update to the HCS will result in
better alignment between the standard and the continually evolving GHS.
The first edition of the GHS, adopted in December 2002 and published in
2003, implemented the 16-section format for SDSs \2\ that is now
standard across much of the globe. As information has improved, the GHS
has updated the form and content of SDSs to improve readability,
minimize redundancies, and ensure hazards are communicated
appropriately (Document ID 0060; Document ID 0237).
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\2\ SDSs, as adopted by the HCS, are intended to provide
comprehensive information about a substance or mixture for use in
the workplace, including identification of the substance or mixture;
hazard identification; composition/ingredient information; first aid
measures; fire-fighting measures; accidental release measures;
handling and storage; exposure controls/personal protective
measures; physical and chemical properties; stability and
reactivity; toxicological information; ecological information;
disposal considerations; transport information; regulatory
information; and other information that may be relevant to the
workplace (e.g., date the SDS was prepared, key literature
references, and sources of data used to prepare the SDS).
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Information OSHA has collected since publication of the 2012 update
to the HCS indicates that aligning the HCS with the GHS has had a
positive impact on workplace hazard communication. Data from published
studies indicate that the hazard communication
[[Page 44150]]
approach taken in the 2012 HCS has been effective, when implemented
appropriately, in enabling workers to understand, avoid, and mitigate
exposures to hazardous chemicals in the workplace (Bechtold, 2014,
Document ID 0061; Elliott, 2016, Document ID 0119). Industry
representatives have indicated that workers responded positively to
training on pictograms and hazard statements because it explained
distinctions between acute toxicity and chronic health effects
(Bechtold, 2014, Document ID 0061). Consistent labeling requirements
have also enabled employers to identify the most hazardous materials in
the workplace, understand more about the health effects of these
chemicals, and address which hazardous chemicals they may want to
replace with safer alternatives (Bechtold, 2014, Document ID 0061).
Labels and SDSs are often the first indication to a worker that
they are handling a hazardous chemical, so it is imperative that labels
and SDSs be as accurate and complete as possible. While the HCS does
not require testing of chemicals, it does require that labels and SDSs
have accurate information based on all available evidence and that
manufacturers, importers, distributors, and employers provide the
complete information on the hazards available to them. Without a
complete picture of the hazards associated with a particular chemical,
workers cannot know how to adequately protect themselves or safely
handle these chemicals. North America's Building Trades Unions (NABTU)
commented that ``[It] is really important to have . . . the labels on
the products that are being used because that's the first source of
information. The SDS is the backup source . . . . [Labels and SDSs are]
where they're going to get information on the hazards of what they're
using and the precautions that need to be taken, including . . . any
engineering controls or any personal protective equipment'' (Document
ID 0464, p. 2).
Several studies published since the 2012 HCS adopted the 16-section
SDS format indicate that the new format has improved comprehension in
the workplace (Elliott, 2016, Document ID 0119; Boelhouver, 2013,
Document ID 0107). However, other recent studies have shown that the
system can still be improved upon. Multiple studies in various
industries have demonstrated that while comprehension has improved,
many SDSs lack information vital to worker protection. Problems include
insufficient information on the identification of substances/mixtures;
inadequate hazard identification and classification information (e.g.,
missing information on carcinogens and sensitizers, incorrect chemical
classifications); lack of precautionary statements on safe handling;
missing information on exposure controls/personal protective equipment;
and missing toxicological information (Jang, 2019, Document ID 0110;
Allen, 2017, Document ID 0117; DiMare, 2017, Document ID 0118; Tsai,
2016, Document ID 0016; Friis, 2015, Document ID 0120; Saito, 2015,
Document ID 0191; Suleiman, 2014, Document ID 0192; Lee, 2012, Document
ID 0070). A 2014 study concluded that the contents of the SDSs
evaluated were generic and incomplete, lacking important safety
measures and health information (Suleiman, 2014, Document ID 0192). A
study on mixtures found that information on individual ingredients
within mixtures was sometimes completely missing and that information
on hazard characterization and classification was ambiguous and almost
entirely incorrect (LeBouf, 2019, Document ID 0183). Furthermore, a
2012 study conducted by NIOSH found that SDSs for certain classes of
chemicals lacked sufficient information to communicate the appropriate
hazards and remedies related to engineered nanomaterials (Eastlake,
2012, Document ID 0063). A follow-up NIOSH study found some improvement
in SDS preparation since implementation of the 2012 HCS; however, the
study also found that there are still serious deficiencies in providing
adequate information on the inherent health and safety hazards of
engineered nanomaterials, including handling and storage (Hodson, 2019,
Document ID 0167).
Inadequate information on the chemical hazards and risk management
practices required on SDSs can lead to overexposure to chemical hazards
and puts workers at risk. An anonymous commenter stated that
``[i]naccurate information makes it difficult for downstream users who
have to rely on inaccurate or incomplete information . . . '' (Document
ID 0308, p. 1). The studies described above demonstrate the need for
ongoing review and refinement to make certain the standard is
addressing comprehensibility issues and staying relevant with current
occupational safety and health tools, science, and technology. This
final rule's updates to Appendix D, which are based in part on recent
revisions to the GHS, seek, among other things, to remedy the issues
that have been identified by clarifying the information needed in the
SDS. For example, a change in Section 9 (physical characteristics to
include particle characteristics) will identify exposure issues that
were not addressed by the previous format. This should, among other
things, improve the hazard information required for nanomaterials.
Furthermore, the GHS has been updated to reflect the development of
non-animal test methods for use in hazard determination and
classification. The development of these test methods led to updates in
Chapter 3.2 (which correspond to updates in this final rule to Appendix
A.2 of the HCS) on skin corrosion/irritation that incorporated new in
vitro test methods, and computational or in silico techniques, to
classify chemicals for this category of hazard (Document ID 0242). And
techniques and processes developed in the behavioral sciences have led
to the development of more effective communication practices for
occupational safety and health purposes (NIOSH, 2019, Document ID
0126).\3\ Studies evaluating the effectiveness of precautionary
statements and pictograms used in the GHS have led to their evolution
and continued revisions (Fagotto, 2003, Document ID 0125; ISHN, 2019,
Document ID 0068; Ta, 2010, Document ID 0115; Ta, 2011, Document ID
0194; Chan, 2017, Document ID 0017).
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\3\ Holistic programs such as NIOSH's Total Worker Health
program, where behavioral science is integrated into more
traditional risk-management practices, require robust hazard
communication practices (Tamers, 2019, Document ID 0076).
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Regularly updating the HCS to align with international practices
also eases compliance for global corporations because it provides
greater international consistency (Bechtold, 2014, Document ID 0061).
Industry groups such as the American Petroleum Institute (API) have
indicated their support for regular HCS updates as long as there is
sufficient input from stakeholders (Document ID 0167). During the 2012
rulemaking, numerous safety organizations (including NIOSH, the
American Chemical Society (ACS), the American Industrial Hygiene
Association (AIHA), the American Society of Safety Engineers (ASSE),
the Center for Protection of Workers' Rights (CPWR), and the Society
for Chemical Hazard Communication (SCHC)) publicly supported OSHA's
continued updates to the HCS (see 77 FR 17585, 17603). The Society of
Toxicology (SOT) also expressed support for updating the HCS to align
with the GHS as this ``creates consistent communication about the
hazards of chemicals across the globe'' (see 77 FR 17585).
[[Page 44151]]
B. Cooperating With International Trading Partners and Other Federal
Agencies
OSHA expects that the updates to the HCS will facilitate
cooperation with international trading partners and other federal
agencies. The U.S. and Canada participate in the RCC, which has a goal
to ``enhance regulatory cooperation and economic competitiveness that
maintain high standards when it comes to health, safety, and the
environment'' (Document ID 0127). OSHA continues to work with Health
Canada through the RCC to develop guidance documents pertaining to
hazard communication issues the two countries share and to work
cooperatively through the UNSCEGHS subcommittee. In addition, OSHA and
Health Canada share regular updates on regulatory activity. As
explained in the Section XIV., Summary and Explanation of the Final
Rule, several updates in this final rule will align U.S. and Canadian
hazard communication practices, thereby facilitating cooperation
between the two countries, easing compliance for employers who
participate in both markets, and strengthening worker protections by
providing harmonized hazard communication standards across trade
borders.
In addition, OSHA is updating the requirements for bulk shipment
under paragraph (f)(5) to provide additional clarity for shipments that
are also regulated by the DOT. For bulk shipments, the finalized new
paragraph should increase flexibility by allowing labels to be placed
on the immediate container or transmitted with shipping papers, bills
of lading, or by other technological or electronic means so that they
are immediately available to workers in printed form on the receiving
end of the shipment. This allows for the full label information to be
available to the downstream user upon receipt while recognizing the
unique DOT placarding issues for bulk shipments. And in another effort
to facilitate inter-agency cooperation, OSHA is finalizing new language
for paragraph (f)(5) providing that where a pictogram required by the
DOT appears on the label for a shipped container, the HCS pictogram for
the same hazard may also be provided, but is not required to
acknowledge that the DOT regulations allow for the GHS pictogram to be
on the shipped container (49 CFR 172.401(c)(5)).
C. Responding to Stakeholder Experiences Implementing the 2012 HCS
Finally, some of the changes in this final rule, including those
related to labeling of small containers and relabeling requirements for
chemicals that have been released for shipment, were developed in
response to feedback and comments received from stakeholders since the
promulgation of the 2012 updates to the HCS (Collatz, 2015, Document ID
0174; Ghosh, 2015, Document ID 0180). With respect to the labeling of
small containers, issues raised by stakeholders included concerns about
insufficient space on the label to highlight the most relevant safety
information, problems with the readability of information on small
labels, and challenges associated with using fold-out labels for
certain small containers that need special handling (Watters, 2013,
Document ID 0200; Collaltz, 2015, Document ID 0174; Blankfield, 2017,
Document ID 0170). This final rule includes revisions designed to
address these issues with small container labeling as well as revisions
addressing other issues raised by commenters. Furthermore, OSHA
believes that adopting a uniform approach to labeling small containers
will enhance worker protections by ensuring that critical information
on the hazards posed by the chemicals is included on the label
regardless of the size of the container. For a full discussion of this
change, see the Summary and Explanation for (f)(12).
Similarly, the finalized revisions to paragraph (f)(11), which
address the relabeling of chemicals that have been released for
shipment, are designed to address stakeholder concerns about the
difficulty some manufacturers have in complying with the HCS's
requirements to update labels when new information becomes available,
especially in the case of chemicals that travel through long
distribution cycles (Kenyon, 2017, Document ID 0182). This final rule
revises paragraph (f)(11) to address these concerns while maintaining
worker protections.
V. Pertinent Legal Authority
A. Background
The purpose of the Occupational Safety and Health Act of 1970 (the
OSH Act or Act) (29 U.S.C. 651 et seq.) is ``to assure so far as
possible every working man and woman in the Nation safe and healthful
working conditions and to preserve our human resources.'' 29 U.S.C.
651(b). To achieve this goal, Congress authorized the Secretary of
Labor to promulgate occupational safety and health standards after
notice and comment. 29 U.S.C. 655(b). An occupational safety and health
standard is a standard ``which requires conditions, or the adoption or
use of one or more practices, means, methods, operations, or processes,
reasonably necessary or appropriate to provide safe or healthful
employment and places of employment.'' 29 U.S.C. 652(8).
The OSH Act also authorizes the Secretary to ``modify'' or
``revoke'' any occupational safety or health standard, 29 U.S.C.
655(b), and under the Administrative Procedure Act, regulatory agencies
generally may revise their rules if the changes are supported by a
reasoned analysis. See Encino Motorcars, LLC v. Navarro, U.S., 136 S.
Ct. 2117, 2125-26 (2016); Motor Vehicle Mfrs. Ass'n v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 42 (1983). In passing the OSH Act,
Congress recognized that OSHA should revise and replace its standards
as ``new knowledge and techniques are developed.'' S. Rep. 91-1282 at 6
(1970). The Supreme Court has observed that administrative agencies
``do not establish rules of conduct to last forever, and . . . must be
given ample latitude to adapt their rules and policies to the demands
of changing circumstances.'' Motor Vehicle Mfrs. Ass'n, 463 U.S. at 42
(internal quotation marks and citations omitted).
Before the Secretary can promulgate any permanent health or safety
standard, they must make a threshold finding that significant risk is
present and that such risk can be eliminated or lessened by a change in
practices. Indus. Union Dep't v. Am. Petroleum Inst., 448 U.S. 607, 642
(1980) (plurality opinion) (``Benzene''). As explained more fully in
Section V.D., Significant Risk, OSHA need not make additional findings
on risk for this final rule because OSHA previously determined that the
HCS addresses a significant risk. 77 FR 17603-17604.
In promulgating a standard under, and making the determinations
required by, the OSH Act, OSHA's determinations will be deemed
conclusive if they are ``supported by substantial evidence in the
record considered as a whole.'' 29 U.S.C. 655(f). OSHA must use the
``best available evidence,'' which includes ``the latest available
scientific data in the field''; ``research, demonstrations,
experiments, and such other information as may be appropriate''; and
``experience gained under this and other health and safety laws.'' 29
U.S.C. 655(b)(5).
B. Authority--Section 6(b)(5)
The HCS is a health standard promulgated under the authority of
section 6(b)(5) of the OSH Act. See Associated Builders & Contractors,
Inc. v. Brock, 862 F.2d 63, 67-68 (3d Cir.
[[Page 44152]]
1988); United Steelworkers of Am. v. Auchter, 763 F.2d 728, 735 (3d
Cir. 1985); 77 FR 17601. Section 6(b)(5) of the OSH Act provides that
``in promulgating health standards dealing with toxic materials or
harmful physical agents,'' the Secretary must ``set the standard which
most adequately assures, to the extent feasible, on the basis of the
best available evidence, that no employee will suffer material
impairment of health or functional capacity even if such employee has
regular exposure to the hazard dealt with by such standard for the
period of his working life.'' 29 U.S.C. 655(b)(5). Thus, once OSHA
determines that a significant risk due to a health hazard is present
and that such risk can be reduced or eliminated by an OSHA standard,
section 6(b)(5) requires OSHA to issue the standard, based on the best
available evidence, that ``most adequately assures'' employee
protection, subject only to feasibility considerations. As the Supreme
Court has explained, in passing section 6(b)(5), Congress ``place[d] .
. . worker health above all other considerations save those making
attainment of this `benefit' unachievable.'' Am. Textile Mfrs. Inst.,
Inc. v. Donovan, 452 U.S. 490, 509 (1981) (``Cotton Dust'').
C. Other Authority
The HCS is also promulgated under the authority of section 6(b)(7)
of the OSH Act. See United Steelworkers, 763 F.2d at 730; 77 FR 17601.
Section 6(b)(7) of the OSH Act provides in part: ``Any standard
promulgated under this subsection shall prescribe the use of labels or
other appropriate forms of warning as are necessary to insure that
employees are apprised of all hazards to which they are exposed,
relevant symptoms and appropriate emergency treatment, and proper
conditions and precautions of safe use or exposure.'' 29 U.S.C.
655(b)(7). Section 6(b)(7)'s labeling and employee warning requirements
provide basic protections for employees, particularly in the absence of
specific permissible exposure limits, by providing employers and
employees with information necessary to design work processes that
protect employees against exposure to hazardous chemicals in the first
instance.
The last sentence of section 6(b)(7) provides that the Secretary,
in consultation with the Secretary of Health and Human Services, may
issue a rule pursuant to 5 U.S.C. 553 to ``make appropriate
modifications in the foregoing requirements relating to the use of
labels or other forms of warning . . . as may be warranted by
experience, information, or medical or technological developments
acquired subsequent to the promulgation of the relevant standard.'' 29
U.S.C. 655(b)(7). OSHA used the authority granted by this paragraph to
promulgate the 2012 revisions to the HCS, 77 FR 17602, and this
provision provides additional authority for this final rule.
This final rule, which is an update to the existing HCS, fits well
within the authority granted by the last sentence of section 6(b)(7).
The changes in the final rule constitute a ``modification'' of the HCS
regarding ``the use of labels or other forms of warning.'' As explained
more fully elsewhere in this preamble, OSHA has determined the updates
are ``appropriate'' based on ``experience, information, or medical or
technological developments acquired subsequent to the promulgation of
the relevant standard.'' The updates found in GHS Rev. 7 are a
``technological development'' that has occurred since the 2012
revisions to the HCS and are also ``warranted by experience [and]
information.'' The GHS was negotiated and drafted through the
involvement of labor, industry, and governmental agencies, and thus
represents the collective experience and information on hazard
communication gathered by the participants in these sectors over the
last several decades. See 71 FR 53617, 53618-53619; \4\ see also
Section III.: Events Leading to the Revised Hazard Communication
Standard in this preamble.
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\4\ The last sentence of section 6(b)(7) requires consultation
with the Secretary of Health and Human Services. OSHA briefed NIOSH
on the proposal for this rule during a collaboration meeting held in
December 2018, which was attended by the Director of NIOSH, and
NIOSH expressed its support. NIOSH continued to express support in
its comments on the proposed rule (Document ID 0281) and also
supported OSHA's update of the HCS in 2012, see 77 FR 17603.
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Authority for the HCS is also found in Section 8, paragraphs (c)
and (g), of the OSH Act. Section 8(c)(1) of the OSH Act empowers the
Secretary to require employers to make, keep, and preserve records
regarding activities related to the OSH Act and to make such records
available to the Secretary. 29 U.S.C. 657(c)(1). Section 8(g)(2) of the
OSH Act empowers the Secretary to ``prescribe such rules and
regulations as he may deem necessary to carry out [his]
responsibilities'' under the Act. 29 U.S.C. 657(g)(2).
D. Significant Risk
As required by section 6(b)(5) of the OSH Act, OSHA originally
determined that the HCS would substantially reduce a significant risk
of material harm when promulgating the standard in 1983. Many OSHA
health standards protect employees by imposing requirements when
employees are exposed to a concentration of a hazardous substance that
OSHA has found creates a significant risk of material health
impairment. Thus, in making the significant risk determination in those
cases, OSHA measures and assesses the hazards of employee exposures to
determine the level at which a significant risk arises.
OSHA took a different approach to its significant risk
determination when first promulgating the HCS. Rather than attempting
to assess the risk associated with exposures to each hazardous chemical
in each industry to determine if that chemical posed a significant risk
in that industry, OSHA took a more general approach. It relied on NIOSH
data showing that about 25 million or about 25 percent of American
employees were potentially exposed to one or more of 8,000 NIOSH-
identified chemical hazards and that for the years 1977 and 1978 more
than 174,000 illnesses were likely caused by exposure to hazardous
chemicals. 48 FR 53282. OSHA then noted the consensus evident in the
record among labor, industry, health professionals, and government that
an ``effective [F]ederal standard requiring employers to identify
workplace hazards, communicate hazard information to employees, and
train employees in recognizing and avoiding those hazards'' was
necessary to protect employee health. 48 FR 53283. Based on that
evidence, OSHA determined that the HCS addressed a significant risk
because ``inadequate communication about serious chemical hazards
endangers workers,'' and that the practices required by the standard
were ``necessary or appropriate to the elimination or mitigation of
these hazards.'' 48 FR 53321. The U.S. Court of Appeals for the Third
Circuit agreed that ``inadequate communication is itself a hazard,
which the standard can eliminate or mitigate.'' United Steelworkers,
763 F.2d at 735. That court has upheld OSHA's determination of
significant risk as sufficient to justify the HCS. See Associated
Builders & Contractors, 862 F.2d at 67-68 (discussing the history of
its review of the issue).
OSHA reaffirmed its finding of significant risk in adopting
revisions to the HCS in 1994. See 59 FR 6126-6133. When revising the
HCS to adopt the GHS model in 2012, OSHA found that there remained a
``significant risk of inadequate communication'' of chemical hazards in
the workplace and that adopting the standardized requirements of the
GHS would
[[Page 44153]]
substantially reduce that risk by improving chemical hazard
communications. 77 FR 17603-17604.
For the changes in this final rule, OSHA has not made a new finding
of significant risk but is making changes that are reasonably related
to the purpose of the HCS as a whole. When, as here, OSHA has
previously determined that its standard substantially reduces a
significant risk, it is unnecessary for the agency to make additional
findings on risk for every provision of that standard. See, e.g., Pub.
Citizen Health Research Grp. v. Tyson, 796 F.2d 1479, 1502 n.16 (D.C.
Cir. 1986) (rejecting the argument that OSHA must ``find that each and
every aspect of its standard eliminates a significant risk''). Rather,
once OSHA makes a general significant risk finding in support of a
standard, the next question is whether a particular requirement is
reasonably related to the purpose of the standard as a whole. See
Asbestos Info. Ass'n/N. Am. v. Reich, 117 F.3d 891, 894 (5th Cir.
1997); Forging Indus. Ass'n v. Sec'y of Labor, 773 F.2d 1436, 1447 (4th
Cir. 1985); United Steelworkers of Am., AFL-CIO-CLC v. Marshall, 647
F.2d 1189, 1237-38 (D.C. Cir. 1980) (``Lead I'').
Furthermore, the Supreme Court has recognized that protective
measures like those called for by the HCS may be imposed in workplaces
where chemical exposure levels are below that for which OSHA has found
a significant risk. In Benzene, the Court recognized that the
``backstop'' provisions of section 6(b)(7) allow OSHA to impose
information requirements even before the employee is exposed to the
significant risk. See Benzene, 448 U.S. at 657-58 & n.66. Rather than
requiring a finding of significant risk, the last sentence of section
6(b)(7) provides other assurances that OSHA is exercising its authority
appropriately by requiring the involvement of the Secretary of Health
and Human Services, and by limiting the authority only to modifications
that are based on ``experience, information, or medical or
technological developments'' acquired since the promulgation of the
standard in the limited areas of hazard communication, monitoring, and
medical examinations. Therefore, OSHA need not make any new significant
risk findings; rather, the final rule is supported by the significant
risk findings that OSHA made when it adopted the current HCS.\5\ See 77
FR 17602.
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\5\ Section 6(b)(7) of the OSH Act also exempts modifications to
hazard communication, monitoring, and medical examination
requirements from the standard-setting requirements of section 6(b),
and so evidences Congress' intent to provide OSHA with an expedited
procedure to update these requirements. The last sentence of section
6(b)(7) merely allows these requirements to be updated to reflect
the latest knowledge available. The authorization to use
Administrative Procedure Act notice and comment procedures rather
than the more elaborate framework established by section 6(b)
demonstrates congressional intent to treat such modifications
differently from rulemakings to adopt standards. Congress envisaged
a simple, expedited process that is inconsistent with the idea that
OSHA must undertake additional significant risk analyses before
exercising this authority, See 77 FR 17602.
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E. Feasibility
Because section 6(b)(5) of the OSH Act explicitly requires OSHA to
set health standards that eliminate risk ``to the extent feasible,''
OSHA uses feasibility analyses to make standards-setting decisions
dealing with toxic materials or harmful physical agents. 29 U.S.C.
655(b)(5); Cotton Dust, 452 U.S. at 509. Feasibility in this context
means ``capable of being done, executed, or effected.'' Id. at 508-09.
Feasibility has two aspects, economic and technological. Lead I, 647
F.2d at 1264. A standard is technologically feasible if the protective
measures it requires already exist, can be brought into existence with
available technology, or can be created with technology that can
reasonably be expected to be developed. See id. at 1272. A standard is
economically feasible if industry can absorb or pass on the cost of
compliance without threatening its long-term profitability or
competitive structure. See Cotton Dust, 452 U.S. at 530 n.55; Lead I,
647 F.2d at 1265. OSHA's determinations regarding feasibility are
discussed more fully in Section VI.E., Technological Feasibility, and
Section VI.G., Economic Feasibility and Impacts, in this preamble.
VI. Final Economic Analysis and Regulatory Flexibility Analysis
A. Introduction and Summary
Under Executive Order 12866 (E.O.) 12866, OIRA determines whether a
regulatory action is significant and, therefore, subject to the
requirements of E.O. 12866 and OMB review. Section 3(f) of E.O. 12866,
as amended by E.O. 14094, defines a ``significant regulatory action''
as an action that is likely to result in a rule that: (1) has an annual
effect on the economy of $200 million or more, or adversely affects in
a material way a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local or
tribal governments or communities (also referred to as significant
under Section 3(f)(1)); (2) creates serious inconsistency or otherwise
interferes with an action taken or planned by another agency; (3)
materially alters the budgetary impacts of entitlements, grants, user
fees, or loan programs, or the rights and obligations of recipients
thereof; or (4) raises novel legal or policy issues arising out of
legal mandates, the President's priorities, or the principles set forth
in E.O. 12866. Upon review, OMB has determined that this final rule is
a significant regulatory action under E.O. 12866.\6\ Pursuant to the
Congressional Review Act (5 U.S.C. 801 et seq.), OIRA designated that
this rule is not a ``major rule,'' as defined by 5 U.S.C. 804(2).
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\6\ <a href="https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202210&RIN=1218-AC93">https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202210&RIN=1218-AC93</a>.
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OIRA has made a determination that this action is not a significant
regulatory action under section 3(f)(1) of E.O. 12866, as amended by
E.O. 14094, because it is not likely to have an annual effect on the
economy of $200 million or more. Nor is this final standard a major
rule under the Congressional Review Act because this rule will not
result in (1) an annual effect on the economy of $100 million or more;
(2) a major increase in costs or prices for consumers, individual
industries, federal, state, or local government agencies, or geographic
regions; nor (3) significant adverse effects on competition,
employment, investment, productivity, or innovation, or on the ability
of United States-based enterprises to compete with foreign-based
enterprises in domestic and export markets. 5 U.S.C. 804(2). Details on
the estimated cost-savings of this rule can be found in the economic
analysis below.
E.O. 13563 directs agencies to adopt a regulation only upon a
reasoned determination that its benefits justify its costs; tailor the
regulation to impose the least burden on society, consistent with
obtaining the regulatory objectives; and in choosing among alternative
regulatory approaches, select those approaches that maximize net
benefits. E.O. 13563 recognizes that some benefits are difficult to
quantify and provides that, where appropriate and permitted by law,
agencies may consider and discuss qualitatively values that are
difficult or impossible to quantify, including equity, human dignity,
fairness, and distributive impacts.
Because section 6(b)(5) of the OSH Act explicitly imposes the ``to
the extent feasible'' limitation on the setting of health standards,
OSHA is not permitted to use cost-benefit analysis to make its
standards-setting decisions (see 29 U.S.C. 655(b)(5); Cotton Dust, 452
[[Page 44154]]
U.S. at 509). In addition to determining economic feasibility, OSHA
estimates the costs and benefits of its proposed and final rules to
ensure compliance with other requirements such as those in E.O. 12866
and E.O. 13563.
In this FEA, OSHA estimates that the proposed amendments to the HCS
would result in annualized net cost savings of $29.8 million at a seven
percent discount rate. Annualized at a three percent discount rate,
OSHA estimates that the proposed amendments to the rule would lead to
net cost savings of $30.7 million per year. OSHA expects that the
revisions to the HCS will also result in modest improvements in worker
health and safety above those already being achieved under the current
HCS, but the agency is unable to quantify the magnitude of these
benefits.
The remainder of this FEA includes the following sections:
B. Need for Regulation
C. Profile of Affected Industries, Establishments, and Employees
D. Health and Safety Benefits and Unquantified Positive Economic
Effects
E. Technological Feasibility
F. Compliance Costs and Cost Savings
G. Economic Feasibility and Impacts
H. Final Regulatory Flexibility Screening Analysis and FRFA
Certification
B. Need for Regulation
Employees in work environments covered by OSHA's HCS are exposed to
a variety of significant hazards associated with chemicals used in the
workplace that can and do cause serious injury, illness, and death. The
HCS serves to ensure that both employers and employees are provided the
information they need about these chemical hazards. The HCS contains a
set of requirements for chemical products, including mandatory hazard
classification, labeling requirements, provisions for communication of
detailed information (in SDSs), and label updating requirements. These
requirements are based on Rev. 3 of the GHS, which was adopted by the
UNSCEGHS in December 2008.
OSHA, in the 2021 Preliminary Economic Analysis (PEA), determined
that the revisions to the HCS would make employers' hazard
communication programs more worker-protective, efficient, and effective
through standardizing practices nationally and internationally (86 FR
9590). In addition, OSHA found that aligning with the GHS Rev. 7 would
continue to facilitate international trade, as a number of U.S. trading
partners are also preparing to align with Rev. 7 (86 FR 9590-91).
The revisions to the HCS include the following notable changes:
<bullet> Maintaining alignment with the GHS:
[cir] Adding classification categories for aerosols, desensitized
explosives, and flammable gases; and
[cir] Updating select hazard and precautionary statements for
clearer and more precise hazard information.
<bullet> Addressing issues identified in implementing the 2012 HCS:
[cir] Updating labeling requirements for small containers;
[cir] Updating labeling requirements for packaged containers that
have been released for shipment or that constitute bulk shipping; and
[cir] Allowing the withholding of concentration ranges of
substances for reasons related to trade secrets.
As discussed in Section VI.F., Compliance Costs and Cost Savings,
of this FEA, the estimated costs and cost savings resulting from the
final revisions to the HCS consist of five main categories: (1) the
cost of reclassifying affected chemicals and revising the corresponding
SDSs and labels to achieve consistency with the reclassification (per
changes to Appendix B), and the cost of revising SDSs and labels to
conform with new precautionary statements and other new mandatory
language in the appendices to the HCS (per changes to Appendices C and
D); (2) the cost of management familiarization and other management-
related costs (associated with all of the revisions to the standard);
(3) the cost of training employees as necessitated by the changes to
the HCS (see paragraph (h)(1) of the 2012 HCS); (4) the cost savings
resulting from the new released-for-shipment provision (revisions to
paragraph (f)(11)); and (5) the cost savings from limiting labeling
requirements for certain very small containers (proposed paragraph
(f)(12)). The first three categories are considered to be one-time
costs and the last two categories are cost savings that would accrue to
employers annually.
The changes to the HCS will maintain the uniformity of hazard
information with the GHS and will, accordingly, serve to improve the
efficiency and effectiveness of the existing hazard communication
system in the U.S., ensure that updated and advanced HCS methods are
recognized, and reduce unnecessary barriers to trade. In short, the GHS
is a ``uniformity standard'' for the presentation of hazard information
(Document ID 0050). And much like other uniformity standards, such as
driving on the right side of the road (in the U.S.), screw threads for
fire hose connectors, ``handshake'' protocols for communication between
computers, and, for that matter, language, the GHS provides significant
efficiencies and economies.\7\
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\7\ A specification standard, such as an engineering standard,
would spell out, in detail, the equipment or technology that must be
used to achieve compliance. The usual rationale for a specification
standard is that compliance would be difficult to verify under a
performance standard; hence, a specification standard would better
protect employees against the risk in question. A specification
standard would generally not provide the efficiencies or economies
(such as easier, less expensive training on uniform pictograms and a
uniform SDS format made possible by the GHS) to the regulated
community that a uniformity standard would. On the contrary, a
specification standard could impose additional costs on some firms
that may be able to effectively protect workers using a cheaper
alternative approach if such flexibility were permitted. It is also
worth noting that, for uniformity standards with technological
implications, the benefits of reduced information costs, economies
of uniformity, and facilitation of exchange may need to be weighed
against possible losses of flexibility, experimentation, and
innovation. However, because the GHS is limited to the presentation
of hazard information and does not involve other than incidental
technological or strategic considerations, the possible costs of
uniformity here would be minuscule.
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Since publication of the update to the HCS in 2012, there continues
to be movement by U.S. trading partners toward maintaining
standardization, consistent with the revisions in the GHS. However,
OSHA does not believe that full and comprehensive standardization in
accordance with the GHS, or the goal of harmonizing the U.S. system
with the international one, can be achieved voluntarily in the absence
of regulation.
First, the market alone will not ensure timely alignment with the
GHS as it undergoes revision periodically. Additionally, in some cases
(e.g., aerosols, desensitized explosives), Rev. 7 contains different
hazard classes or classification criteria than the 2012 HCS, and it
would be impermissible for a manufacturer to comply with Rev. 7 rather
than the criteria in the existing HCS. Second, while the costs of
creating SDSs and labels are borne directly by the chemical producers,
maintaining alignment with the GHS benefits the users of hazardous
chemicals. These users include employers who are direct customers of
chemical manufacturers, employees who use or are exposed to workplace
chemicals, and emergency responders who typically have no market
relationship with the chemical producers. Even if market forces could
ensure the socially optimal approach to SDSs between chemical
manufacturers and their customers, there are limited market forces at
work between the chemical manufacturer and two key sets of users: the
employees and the emergency response community.
[[Page 44155]]
Therefore, the benefits achieved by maintaining alignment with the GHS
are unlikely to be obtained in the private market without regulation.
OSHA recognizes that there will be some market pressure to align
with Rev. 7 as its adoption expands internationally.\8\ Some firms in
the U.S. may think that they have no need to follow the GHS because
they do not ship their products internationally. These firms may not
realize the extent to which they are involved in international trade.
There are probably few companies that have products that are never
involved in international trade or that never import chemical products
requiring hazard information.\9\ Many chemical producers ship their
products to distributors and are unaware of where their products are
ultimately used. These distributors might well put pressure on their
suppliers to maintain compliance with the GHS. Further, small companies
sell chemicals to larger companies. The larger companies may use those
chemicals to make other products that are exported. These larger
companies might also pressure their small-firm suppliers to align with
the GHS. Nevertheless, relying solely on market pressures would surely
involve a long transition period, with attendant losses in worker
protection and production efficiencies, and it is unlikely that the
market alone will ensure full alignment with the GHS for reasons
described above.
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\8\ See UN, 2018, pp. 12-13 (Document ID 0040).
\9\ According to the U.S. International Trade Commission, U.S.
imports of chemicals and related products increased 23 percent from
2015 ($260.4 billion) to 2019 ($320.1 billion); and U.S. exports of
chemicals and related products increased 7 percent from 2015 ($227.7
billion) to 2019 ($243.7 billion) (Document ID 0234). And the
American Chemistry Council reported that in 2019, total U.S.
chemical exports accounted for 10 percent of all U.S. goods exports
and 10 percent of all global chemical exports (Document ID 0235).
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The changes to the HCS will involve costs and cost savings mainly
for manufacturers, importers, and distributors. Manufacturers and
importers of chemicals will also achieve benefits, in part because they
themselves benefit as both producers and users, and in part because of
foreign trade benefits. Some manufacturers may not obtain trade
benefits unless they engage in chemical export. International
harmonization of hazard communication requirements may also make it
easier for small companies to engage in international trade if they so
desire (see additional discussion below in VI.D., Health and Safety
Benefits and Unquantified Positive Economic Effects).
Of more significance to the concerns of the OSH Act, the changes
will also provide health benefits from improved hazard classification
and communication; although unquantified in this final rule, these
benefits include reductions in worker illnesses, injuries, and
fatalities (see additional discussion below in VI.D., Health and Safety
Benefits and Unquantified Positive Economic Effects).
Because many of the health and safety benefits and cost savings
described in this analysis require uniformity and are dispersed among a
network of producers and users, only some of whom have direct market
relationships with each other, OSHA believes maintaining a single,
uniform standard will best achieve the full benefits available from a
hazard communications system.
C. Profile of Affected Industries, Establishments, and Employees
In this section, OSHA presents a final profile of industries
affected by this revision to the HCS. The profile data in this section
are based upon the 2012 HCS FEA and the PEA supporting the 2021 HCS
NPRM, updated in this FEA with the most recent data available.
As a first step, OSHA identifies the North American Industry
Classification System (NAICS) industries affected by the changes to the
HCS.\10\ Next, OSHA provides statistical information on the affected
industries, including the number of affected entities and
establishments; the number of workers whose exposure to the chemicals
subject to the HCS could result in injury, illness, or death
(``affected relevant employees''); and the average revenues and profits
for affected entities and establishments by six-digit NAICS
industry.\11\ This information is provided for each affected industry
as a whole, as well as for small entities, as defined by the Small
Business Administration (SBA) \12\ and for ``very small'' entities,
defined by OSHA as those with fewer than 20 employees, in each affected
industry (U.S. Census Bureau, 2020a, Document ID 0231; U.S. Census
Bureau, 2020b, Document ID 0232).
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\10\ For this FEA, OSHA used 2017 NAICS industry categorization
and nomenclature. Although the 2017 NAICS categorization was updated
in 2022, OSHA notes that all profile data presented in this FEA were
published in 2022 or earlier years but are pre-2022 in content, and
therefore were assigned 2017 NAICS IDs.
\11\ The Census Bureau defines an establishment as a single
physical location at which business is conducted or services or
industrial operations are performed. The Census Bureau defines a
business firm or entity as a business organization consisting of one
or more domestic establishments in the same state and industry that
are specified under common ownership or control. The firm and the
establishment are the same for single-establishment firms. For each
multi-establishment firm, establishments in the same industry within
a state will be counted as one firm; the firm employment and annual
payroll are summed from the associated establishments (Document ID
0047).
\12\ According to the SBA, ``The size standards are for the most
part expressed in either millions of dollars (those preceded by
``$'') or number of employees (those without the ``$''). A size
standard is the largest that a concern can be and still qualify as a
small business for Federal Government programs. For the most part,
size standards are the average annual receipts or the average
employment of a firm. How to calculate average annual receipts and
average employment of a firm can be found in 13 CFR 121.104 and 13
CFR 121.106, respectively'' (SBA, 2019, Table of Small Business Size
Standards--Effective Aug 19, 2019, Document ID 0225)). In December
2022, SBA published an update to the table of small business size
standards. However, the schedule for this final HCS rulemaking did
not allow for a timely adoption of the 2022 table.
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The revisions to the HCS affect establishments in a variety of
different industries in which employees are exposed to hazardous
chemicals or in which hazardous chemicals are produced. The changes to
the HCS do not change the overall list of affected industries or
establishments. However, some changes specifically affect certain
establishment groupings that manufacture aerosols, desensitized
explosives, and flammable gases. Other changes affect certain
manufacturers of hazardous chemicals that are packaged in small
containers and manufacturers of chemicals that are not immediately
distributed after being released for shipment.
The revisions define and revise specific classifications and
categories of hazards, but the scope of the requirements under which a
chemical (whether a substance or mixture of substances) becomes subject
to the standard is not substantially different from the 2012 version of
the HCS. Therefore, OSHA believes that the revisions have little or no
effect on whether specific establishments fall within the scope of the
standard.
OSHA's estimates of the number of employees who will require new
training under the revisions to the standard are based on BLS's (2023)
Occupational Employment Statistics data for May 2022, specifically the
estimates of the number of employees in SOC 51-0000 Production
Occupations and SOC 13-1081 Logisticians working in firms in the NAICS
industries that are affected by the revised requirements to reclassify
aerosols, desensitized explosives, and flammable gases.\13\ (See
[[Page 44156]]
the analysis and discussion of training costs below in VI.F.,
Compliance Costs and Cost Savings.)
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\13\ The NAICS industries estimated to be affected by the
revised requirement to reclassify aerosols, desensitized explosives,
and flammable gases are the following: 211130 Natural Gas
Extraction, 324110 Petroleum Refineries, 325110 Petrochemical
Manufacturing, 325120 Industrial Gas Manufacturing, 325320 Pesticide
and Other Agricultural Chemical Manufacturing, 325412 Pharmaceutical
Preparation Manufacturing, 325510 Paint and Coating Manufacturing,
325520 Adhesive Manufacturing, 325611 Soap and Other Detergent
Manufacturing, 325612 Polish and Other Sanitation Good
Manufacturing, 325613 Surface Active Agent Manufacturing, 325620
Toilet Preparation Manufacturing, and 325920 Explosives
Manufacturing. Bureau of Labor Statistics (BLS, 2023). Occupational
Employment Statistics--May 2022 (Released April 25, 2023). Available
at <a href="https://www.bls.gov/oes/#data">https://www.bls.gov/oes/#data</a> (Accessed April 27, 2023) (Document
ID 0482).
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Table VI-1 provides an overview of the estimated numbers of firms,
establishments, and employees in each covered NAICS industry; the
estimated number of employees in covered occupations (e.g., logistics
personnel); and the estimated numbers of affected firms, affected
establishments, and affected employees in covered occupations.\14\
Tables VI-2 and VI-3, respectively, provide parallel information for
all affected business entities defined as small by the SBA \15\ and all
affected very small business entities, defined by OSHA as those with
fewer than 20 employees. The data in these tables update the estimates
provided in the PEA in support of the 2021 HCS NPRM (Document ID 0258)
and rely on the most recent comprehensive set of data (including
revenues) available from the Bureau of Labor Statistics (BLS, 2023) and
the U.S. Census Bureau (2022a; 2022b; 2022c).\16\
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\14\ The overall percentage of firms, establishments, or
employees affected is based on the largest percentage affected for
any single cost item--as shown in Table VI-10 later in this section.
To estimate the overall number of affected firms, establishments,
and employees, OSHA multiplied the total number of firms,
establishments, and employees by the maximum percentage of firms,
establishments, and/or employees affected by any single provision.
Because most of the NAICS industries shown in the table would be
affected by rule familiarization, this percentage is 100 percent for
most of the NAICS industries shown.
\15\ For the 2019 SBA U.S. Small Business Administration Table
of Small Business Size Standards matched to North American Industry
Classification System Codes (Effective August 19, 2019), see
Document ID 0225. In Table VI-2 in the PEA, the numbers shown for
Total Employees and Employees in Covered Occupations (columns 5 and
6) erroneously understated the correct estimates. However, because
OSHA's underlying calculations utilized the correct estimates, the
errors in that table did not affect compliance cost estimates or any
other results derived in the PEA.
\16\ U.S. Census Bureau, Statistics of U.S. Businesses, 2017
(Document ID 0231; 0232).
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The PEA and Initial Regulatory Flexibility Analysis in the NPRM did
not include the construction industry (NAICS 23) within its scope and
in
[[Page 44170]]
written comments the Construction Industry Safety Coalition (CISC)
questioned the basis for the exclusion (Document ID 0335, pp. 2-3). In
response, OSHA notes that the scope and application of the final
standard primarily refers to manufacturers, importers, and
distributors. OSHA anticipates that the compliance burden of this rule,
and therefore the economic impacts, will primarily be borne by the
general industry sectors noted above, and although the construction
industry is not exempted from the scope and application of the final
standard, any economic impact upon construction employers will likely
take the form of downstream effects as consumers of affected chemical
products.
To the extent that there are costs for the construction industry
associated with training workers on new SDSs, OSHA believes that these
costs will be de minimis. As OSHA notes below in the section on
training costs, the agency estimated training costs for health and
safety personnel, but not users of chemicals with new hazards because
OSHA concluded that there would only be a trivial amount of training
associated with reclassification for those users. OSHA's understanding
of the construction industry is that there are relatively few employees
who are affected by the HCS standard who are not users of the
chemicals, and therefore has not taken costs for that industry.
The costs and cost savings of some of the revised provisions (new
classification criteria for select hazards and labels on very small
containers) are driven by the number of SDSs (and labels) that
manufacturers must redesign as a result of the new criteria and the
number of labels on very small containers. In support of the cost
analysis that appears later in this FEA, Table VI-4 presents OSHA's
estimate of the number of labels per container by container size (and
type).\17\ Starting with the fifth row (container type: 250 ml
container), Table VI-4 is drawn from data in a table (Table VI-5)
presented in the FEA in support of the 2012 HCS final rule (77 FR
17639-40), but OSHA has updated the data to include smaller containers
to permit evaluation of the impacts of the small container and very
small container labeling provisions introduced in (new) paragraph
(f)(12). Also, the term ``jug'' has been changed to the more generic
term ``container.'' The figures in Table VI-4 are slightly different
than some of the figures in Table VI-5 of the 2012 FEA due to a change
in OSHA's approach to rounding and the reporting of more significant
digits.
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\17\ As reflected in Table VI-4, OSHA assumes one outer
packaging with an additional label for every two 2.5-gallon
containers; one outer packaging with an additional label for every
four 1-liter, 2-liter and 1-gallon containers; and one outer
packaging with an additional label for every eight containers
smaller than 1 liter. In the PEA, OSHA requested public comment on
the label-container specifications presented in Table VI-4. OSHA
received no comments addressing the specifications proposed in Table
VI-4; therefore, in this FEA Table VI-4 remains unchanged from its
preliminary appearance.
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BILLING CODE 4510-26-C
As will be discussed at greater length below in Section VI.F.,
Compliance Costs and Cost Savings, it has been OSHA's understanding
that chemical manufacturers and importers periodically review, revise,
and update the electronic templates they use to create SDSs and labels.
Changes are made, for example, as information regarding specific
hazards becomes available, new information about protective measures is
ascertained, or revisions are made to product information and marketing
materials. Labels and SDSs are also produced and modified when products
are first introduced to the market or when products change. In the PEA,
the terms ``electronic templates'' and ``electronic files'' were used
interchangeably with, and as proxies for, the term ``SDS.'' All three
terms refer to electronic files that are used to generate SDSs and
labels. Table VI-5 provides, by covered NAICS industry, estimates of
the total number of labels, the number of labels on very small
containers (containers of 3 ml capacity or less), the total number of
SDSs, and the number of labels and SDSs affected by the proposed
revisions to the HCS classification criteria. The term ``SDS'' in the
column headers and in the discussion below represents the
[[Page 44172]]
estimated number of electronic templates (files) that are used to
create SDSs and labels. The derivation of these estimates is discussed
below.
OSHA's estimate of the total number of SDSs per NAICS industry, as
presented in Table VI-5, was developed by its contractor to support the
agency's FEA for the 2012 final standard.\18\ The analysis started with
the number of SDSs per establishment by establishment size, as
originally derived in the economic analysis in support of the 2009
proposed HCS rule (Document ID 0029) using a sampling of company
websites and the SDSs posted there.\19\ The analysis then combined the
estimated number of SDSs per establishment by establishment size with
the estimated number of establishments to estimate the weighted average
number of SDSs per establishment in a given NAICS industry. This
estimate was then multiplied by the average number of establishments
per firm to estimate the number of SDSs per firm for each NAICS
industry. Multiplying by the number of firms per NAICS industry yields
the total number of SDSs in each NAICS industry (as shown in Column 5
of Table VI-5).
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\18\ Technical and analytical support for the PEA and this FEA
was provided by Eastern Research Group, Inc. (ERG) under Contract
No. DOL-OPS-16-D-0012.
\19\ This methodology was not challenged by commenters during
the rulemaking that resulted in the 2012 final rule.
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OSHA's preliminary estimate of the number of labels per NAICS
industry was constructed using the same methodology developed in the
2012
[[Page 44175]]
HCS final rule (Document ID 0005, pp. 17634-17643), but with more
recent data.
The steps in the analysis, elaborated on below, were summarized in
the PEA as follows:
<bullet> Begin with data on shipment weight by commodity code and
shipment weight class.
<bullet> Estimate the average weight per container for containers
of various sizes.
<bullet> Allocate the tons shipped in each shipment weight class
for certain sizes of containers.
<bullet> Divide the tons shipped by the average container weight to
estimate total containers.
<bullet> Multiply the containers by the average number of labels
per container to estimate total labels.
<bullet> Allot the labels among NAICS codes using receipts data.
(86 FR 9610)
The label analysis in the PEA began with the U.S. Census Bureau and
the U.S. Department of Transportation's jointly produced Commodity Flow
Survey (CFS) (U.S. Census Bureau, 2014a, Document ID 0024) data on
shipment characteristics by commodity and shipment weight. This dataset
includes the number of tons shipped for a range of shipment weight
classes by Standard Classification of Transported Goods (SCTG) code.
The number of tons is converted to pounds, and limited to hazardous
non-consumer products (i.e., those that would have the HCS labeling).
The estimated percentages for the transported goods identified as
hazardous non-consumer products were presented in the 2012 HCS FEA cost
model (See ERG/OSHA, 2012, Document ID 0029). At the time OSHA
developed the PEA, the final 2017 CFS data was not yet available.
Therefore, 2012 CFS data was the most recent information available.
OSHA requested public comments, and received none, on the estimated
percentages for the transported goods identified as hazardous non-
consumer products in the preliminary profile. For this FEA, OSHA has
revised the preliminary percentages of hazardous non-consumer products
to reflect data from the 2017 CFS (U.S. Census Bureau, 2020d, Document
ID 0474), which is the most recent available.
The CFS-based percentage estimates are used in conjunction with
another CFS dataset (U.S. Census Bureau, 2020e, Document ID 0475) that
has shipment data by NAICS industry (but not by shipment weight) to
divide the detailed shipment weight data into shipments coming from
manufacturers and distributors.
The next step in the methodology estimated the representative
weight per container for a variety of types of containers (ranging in
size from a 3-milliliter vial to a rail car) and substances (such as
antifreeze, diesel fuel, paint). Using representative substances, OSHA
estimated the shipment weight for one container of each size as
Shipment Weight = (Product Weight per gallon x Container Capacity) +
Container Weight. Because of a lack of available data establishing the
percentage of products shipped by container type (i.e., the breakdown
of the types of products shipped by each container type), the
calculation for each product and container type relied on professional
judgment (by OSHA and its economic contractor, ERG) to select a
``typical'' product weight per gallon and container weight for each
container type, and no commenters provided data that contradicted this
approach. Next, the analysis estimated shipment weight per container by
multiplying the average product weight per gallon times the number of
gallons per container, plus the container weight.
To convert the CFS data on tons (or pounds) shipped by container
size into a number of containers, the analysis estimated the percentage
of each shipment class likely to be shipped in certain sizes of
containers. Shipments of lower weights are generally estimated to be
shipped in smaller containers, and vice versa. Then the total non-
consumer hazardous pounds shipped (from the CFS data) was multiplied by
the estimated percentage shipped in each container type to yield the
number of non-consumer hazardous pounds in each container type.
Finally, the non-consumer hazardous pounds in each container type were
divided by the average weight per container type to yield an estimate
of the total number of containers.
To estimate the number of labels that would be used on these
containers, the analysis first estimated the average number of labels
on a single container for each container size (from Table VI-4 above).
As previously noted, these estimates account for the fact that some
containers have outer packaging that would require an additional label
under this proposed rule (e.g., kits containing containers less than
100 ml where tags and fold out labels are infeasible) or are shipped
with several containers grouped into a single outer container with a
label. This average number of labels per container for each shipment
size class was then multiplied by the number of containers to estimate
the total number of labels.
The final step in the analysis was to allocate the number of labels
shipped from SCTG codes to NAICS codes. The NAICS-to-SCTG mapping was
adapted from the mapping used in the FEA in support of the 2012 HCS
final rule analysis, but with NAICS categories updated from 2007 to
2017 categories. U.S. Census (2022) Statistics of U.S. Businesses data
was used to estimate each NAICS industry's share of total receipts for
the SCTG code with which it corresponds, and then the number of labels
in each SCTG was allocated proportionally. (This calculation was
performed separately for shipments from manufacturers and from
distributors for purposes of estimating cost savings due to the
proposed released-for-shipment provision in paragraph (f)(11)). This
resulted in the estimated number of labels shown in Column 3 of Table
VI-5.\20\
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\20\ For example, NAICS 211130--Natural Gas Extraction is
categorized as a basic chemicals manufacturer, or Code 20 in the
SCTG commodity coding system. Across the range of container types
and container weights shown in Table VI-4, the analysis led to an
estimate of the total number of labels (600,645,446) required by all
SCTG Code 20 manufacturers (see Document ID 0481, tab ``Labels per
NAICS'', cell O11). The percentage of receipts (30.7 percent) for
NAICS 211130 relative to total receipts for SCTG Code 20 employers
(Document ID 0481, tab ``Labels per NAICS'', cells N11-P11) was then
applied to this total number of labels. The result, shown in Column
3 in Table VI-5, is an estimated 184,330,155 labels for NAICS
2111130. Note that multiplying factors may yield a slightly
different total due to rounding of the factors in the table (but not
in the spreadsheet).
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To estimate the number of labels on very small containers (those on
containers with a volume capacity of 3 ml or less), the same analysis
was performed, but it was limited to containers in that size range. The
resulting estimates of the number of labels on very small containers
are shown in Column 4 of Table VI-5.
Not every SDS and label, and not every label on very small
containers, would be affected by the rule. Only SDSs and labels for
certain products (aerosols, desensitized explosives, and flammable
gases) would be affected by the new classification criteria. And only
certain very small containers would be covered by proposed paragraph
(f)(12)(iii), which would eliminate some labeling requirements in
certain circumstances. In particular, under paragraph (f)(12)(iii),
only a product identifier would be required on very small containers (3
ml or less) where the manufacturer, importer, or distributor can
demonstrate that a label would interfere with the normal use of the
container and that it is not feasible to use pull-out labels, fold-back
labels, or tags containing the full label
[[Page 44176]]
information, although the immediate outer packaging would need to
include the full label. Thus, in addition to the estimated total number
of SDSs, labels, and labels on very small containers, Table VI-5 shows
the number of each estimated to be affected by the revised
standard.\21\
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\21\ Note that OSHA's cost estimates for reclassifying affected
chemicals and revising the corresponding SDSs and labels to achieve
consistency with the reclassification (per changes to Appendix B),
and for revising SDSs and labels to conform with new precautionary
statements and other new mandatory language in the appendices to the
HCS (per changes to Appendices C and D), are based on the costs
associated with chemical manufacturers editing their electronic
files (which are used to produce labels and SDSs) for each product
for which reclassification would be required as a result of the
final rule. They are not based on the number of labels or SDSs
produced or used. The number of labels and labels affected by
revision in the tables provided represent the total number produced;
that number is provided to include all relevant information even
though it is not being used in calculating costs.
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Although OSHA preliminarily determined that this methodology
remains sound, in the NPRM the agency invited public comment on the
reasonableness of this methodology for the current analysis and on its
understanding about the use of electronic template files to create SDSs
and labels. One commenter, Ameren Corporation (Ameren), directly
addressed OSHA's nomenclature for SDS electronic files and the ability
of stakeholders to understand the agency's preliminary methodology for
estimating SDSs and labels, with the comment, ``Ameren agrees with
OSHA's understanding of electronic template files to create SDSs and
labels'' (Document ID 0309, p. 5). Another commenter, Michele Sullivan,
noted that ``every HCS SDS will need to be revised'' due to the changes
in Appendix D. As shown in Table VI-5, OSHA already estimates that
almost every SDS will be revised due to the provisions in the final
rule.
Responsible Industry for a Sound Environment (RISE) and CropLife
America (CropLife) noted that the labeling requirements of the HCS do
not apply to pesticides that are regulated under the Federal
Insecticide, Fungicide, and Rodenticide Act (FIFRA), but Table VI-5
lists over 23 million labels affected by this revision for the
Pesticide and Other Agricultural Manufacturing industry. RISE and
CropLife requested clarification on this apparent conflict (Document ID
0343, pp. 3-4).
In response to the concerns expressed by the two trade associations
about the number of pesticide labels affected by the revised HCS, OSHA
notes that the agency lacks data indicating what proportion of
chemicals produced by the Pesticide and Other Agricultural
Manufacturing industry fall within FIFRA's definition of pesticide,
which is the category of chemicals exempt from the HCS. The agency has
chosen to err on the side of caution and to the extent that the
preliminary estimate overstates the actual number of labels affected,
any such differential would only over-estimate the costs of the rule.
This assumption has no bearing on the scope of the HCS and the HCS is
clear that pesticides that meet FIFRA's definition are exempt.
Several commenters described the common practices found within
their industry for updating SDSs and labels, which support OSHA's
understanding of the use of electronic templates for SDSs and labels.
The Independent Lubricant Manufacturers Association (ILMA) surveyed
their membership on several of the technical and economic issues raised
in the NPRM. Based on 16 responses to the ILMA survey, all from the
association's manufacturing members, ILMA stated that ``[t]he majority
of ILMA members responding to the survey indicated that they rely on
third-party services to generate SDS and labels, whether it be software
or contracted work'' (Document ID 0460, Att. 1, p. 5).
On the topic of the outsourcing of SDS software development, the
National Association of Chemical Distributors (NACD) polled a few of
their member companies on how employers process SDSs. At least one
member company noted that they outsourced the creation of their SDSs to
a firm that specializes in that work because ``like many NACD members,
most of whom are small businesses,'' their staff do not have time to do
that work (Document ID 0446, p. 2).
The Hach Company (Hach), a manufacturer of chemical reagents and
instruments for water quality analysis, indicated during testimony at
the public hearing and in a post-hearing comment that it used software
it purchased from an outside vendor to create its SDSs (Document ID
0427, pp. 1-2). Tables VI-6 and VI-7, respectively, provide information
on total numbers of SDSs, labels, and labels on very small containers,
and on the numbers of SDSs and labels (including labels on very small
containers) affected by reclassification and the provisions for labels
on very small containers, for all covered small entities and very small
entities.
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Table VI-8 shows average estimated profit rates for affected NAICS
industries based on Internal Revenue Service (IRS) (2016) SOI Tax
Stats--
[[Page 44181]]
Corporation Source Book profit data for each of the 14 years 2000-2013.
OSHA's final estimate of average profit rates by six-digit NAICS
industry replicate the agency's preliminary estimate of profit rates
\22\ (Document ID 0004).
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\22\ In the PEA, OSHA requested public comment on the estimated
profit rates presented in Table VI-8. OSHA received no comments
addressing the estimates proposed in Table VI-8; therefore, in this
FEA Table VI-8 remains unchanged from its preliminary appearance.
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Table VI-9 presents OSHA's final estimates of total revenues and
total profits by NAICS industry code for all entities, small entities,
and very small entities affected by the revised standard rule. For this
FEA, OSHA extrapolated the receipts reported in the 2017 Statistics of
U.S. Businesses (SUSB) by NAICS industry to 2022 dollars using the
Bureau of Economic Advisors (BEA) GDP deflator. To assign revenue for
2022 at the six-digit NAICS level, OSHA benchmarked per-establishment
revenue to per-establishment payroll based on 2017 SUSB revenue-payroll
ratios and projected to 2022 dollars using the BEA GDP deflator.
OSHA calculated total profits per NAICS industry by multiplying the
average profit rate (NAICS industry) (Document ID 0004) by total
revenues (NAICS industry) (U.S. Census Bureau, 2022a, Document ID 0476;
U.S. Census Bureau, 2022b, Document ID 0477).
Table VI-10 shows, by NAICS industry code, OSHA's best estimates of
the percentage of establishments or entities affected for each element
of the proposed revisions to the HCS that is projected to result in
costs (see Section VI.F., Compliance Costs and Cost Savings, in this
FEA for an explanation of the cost categories presented in this
table).\23\
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\23\ Note that the provisions that are projected to result in
cost savings are not included in Table VI-10 because, for those
provisions, OSHA estimates a percentage of product, rather than a
percentage of entities or establishments, that would be affected.
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Finally, Table VI-11 summarizes key estimates for the combined
covered industries, labels, and SDSs affected by the final rule. The
data in this table are drawn from profile tables presented earlier in
this FEA and summarize both the magnitude of the global profile metrics
(within the scope of OSHA jurisdiction) and the magnitude of affected
inputs critical to the agency's analysis of the final economic impacts.
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D. Health and Safety Benefits and Unquantified Positive Economic
Effects
As part of the rulemakings that resulted in the promulgation of the
original HCS in 1983 and the 1987 updates, OSHA conducted research to
identify and estimate expected health and safety benefits, as described
in the preambles to those final rules (48 FR 53327-53329; 52 FR 31868-
31869). Combining the estimates from the 1983 rulemaking with those
from the 1987 update, OSHA estimated that the HCS would prevent 31,841
non-lost-workday injuries and illnesses, 20,263 lost-workday injuries
and illnesses, 6,410 chronic illnesses, and 4,260 fatalities annually
(77 FR 17621). In the 2012 final rule to modify the HCS to conform with
the GHS, OSHA estimated that compliance with those revisions to the HCS
would result in additional health and safety benefits equal to 1
percent of the previously-estimated health and safety benefits--that
is, they would result in the prevention of an additional 318 non-lost-
workday injuries and illnesses, 203 lost-workday injuries and
illnesses, 64 chronic illnesses, and 43 fatalities annually (77 FR
17620-17624).
Relative to the HCS rulemakings that resulted in the promulgation
of final rules in 1983, 1987, and 2012, the revisions to the HCS
finalized in this current rulemaking are incremental and minor.
Accordingly, OSHA expects that the revisions to the standard will
result in more modest improvements in employee health and safety than
the estimated benefits OSHA attributed to the earlier rulemakings. But
OSHA expects that the promulgation of the revisions to the HCS will
result in an increased degree of health and safety for affected
employees and a corresponding reduction in the annual numbers of
injuries, illnesses, and fatalities associated with workplace exposures
to hazardous chemicals. Aligning with Rev. 7 will improve worker health
and safety by ensuring the provision of more and better hazard
information to employers and workers. For example, OSHA anticipates
that the improved criteria for aerosols and flammable gases and the new
hazard class for desensitized explosives, along with updated
precautionary statements, will better differentiate the hazards
associated with those chemicals. In addition, the revised released-for-
shipment provisions will remove the risk of injury and chemical
exposures for employees who previously would have confronted the
possibility of, for example, having to break down pallets of sealed,
shrink-wrapped, or packaged containers to replace labels when new
hazards were identified.
Although OSHA expects that the revisions to the HCS will reduce
injuries, illnesses, and fatalities, the limited scope and nature of
the changes being finalized have led OSHA to a determination that it
cannot reasonably quantify an estimate of how many injuries, illnesses,
and fatalities will be prevented. As the agency noted in the 2012 FEA,
any assessment of benefits that are incremental to the original
[[Page 44196]]
estimated benefits, e.g., benefits associated with minor improvements
to an existing standard, broadens the range of uncertainty associated
with the original estimates (77 FR 17621).\24\ In the NPRM, OSHA
invited interested parties to provide comments and evidence on how the
proposed revisions to the HCS are likely to affect worker safety and
health.
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\24\ As described above, OSHA estimated that the 2012 revisions
to the HCS would result in benefits equal to 1 percent of the health
and safety benefits previously estimated for the standard (77 FR
17620-17624). In the 2012 rulemaking, OSHA and stakeholders
collectively noted the considerable uncertainty inherent in
estimating benefits that are additional (incremental) to the set of
benefits associated with the original rule (see 77 FR 17620-17624).
The agency stated: ``OSHA believes that a reasonable range for the
magnitude of the health and safety benefits resulting from the
proposed revisions would be between 0.5 percent and 5 percent of the
benefits associated with the current HCS'' (77 FR 17621 (n 14)). In
addition, OSHA stated in the 2012 FEA that ``[i]t is conceivable
that actual benefits might be somewhat lower, but because the GHS is
expected to result, in some situations, in more timely and
appropriate treatment of exposed workers, OSHA expects that actual
benefits may be larger, perhaps several times larger'' (77 FR
17621).
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NABTU commented that the organization ``strongly supports OSHA's
proposal to improve elements of the standard, as it is imperative to
have accurate information available to workers on the hazards of the
chemicals to which they are exposed'' (Document ID 0334, p. 1). NIOSH
commended OSHA for proposing to update the HCS to reflect revisions to
the GHS and for applying ``sound reasoning'' as the basis for using
Rev. 7 as the primary guidance (Document ID 0281, Att. 2, p. 2). Also
voicing broad approval of the proposed standard was the Ameren, who
stated, ``whenever worker knowledge is increased on the hazards of
working with chemicals, such as is done in the proposed revision to the
HCS, worker safety will be increased'' (Document ID 0309, p. 5).
Furthermore, Ameren concurred with OSHA's preliminary assessment of the
benefits of the proposed standard, noting that it agreed with OSHA that
the proposed changes would enhance the clarity and accessibility of
hazard information and workers would receive better training (Document
ID 0309, p. 2).
OSHA received many other comments supporting the positive impact of
specific provisions on worker safety. Several commenters argued that
the proposed changes would reduce worker safety and referred to
specific proposed changes (see, e.g., Document ID 0322, Att. 1, p. 1;
0354, p. 1). OSHA has addressed both kinds of comments and explained
why it disagrees with commenters suggesting that the rule will
negatively impact worker safety throughout the relevant parts of
Section XIV., Summary and Explanation of the Final Rule.
In addition to health and safety benefits, OSHA expects that the
revisions to the HCS will result in other positive economic effects.
For example, being better aligned with the GHS will help facilitate
international trade, thereby enhancing competition, increasing export
opportunities for U.S. businesses, reducing costs for imported
products, and generally expanding the selection of chemicals and
products available to U.S. businesses and consumers. As a result of the
direct savings expected to result from better harmonization and the
associated increase in international competition, prices for the
affected chemicals and products, and the corresponding goods and
services that use them, should decline, even if only to a limited
extent.
Similarly, better alignment between the HCS and the GHS will have
the additional benefit of meeting the international goals for adoption
and implementation of the GHS that have been supported by the U.S.
government.\25\ Maintaining alignment with the GHS in U.S. laws and
policies through appropriate legislative and regulatory action was
anticipated by the U.S. when it supported international mandates
regarding the GHS in the Intergovernmental Forum on Chemical Safety,
the World Summit on Sustainable Development, and the United Nations. It
is also consistent with the established goals of the Strategic Approach
to International Chemical Management that the U.S. helped to craft
(SAICM, 2006, Document ID 0039).
---------------------------------------------------------------------------
\25\ The European Union (EU), Canada, Australia, and New Zealand
have also indicated that they are proposing updates to align with
Rev. 7 (Report of the Sub-Committee of Experts on the Globally
Harmonized System of Classification and Labelling of Chemicals on
its thirty-fifth session ST/SG/AC.10/C.4/7, Document ID 0040). For
the history of U.S. government support for adoption and
implementation of the GHS, see the 2012 Final HCS Rule, Document ID
OSHA-H022K-2006-0062-0656, Section II. Events Leading to the Revised
Hazard Communication Standard (77 FR 17577).
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E. Technological Feasibility
In accordance with the OSH Act, OSHA is required to demonstrate
that occupational safety and health standards promulgated by the agency
are technologically feasible. A standard is technologically feasible if
the protective measures it requires already exist, can be brought into
existence with available technology, or can be created with technology
that can reasonably be expected to be developed. See Lead I, 647 F.2d
at 1272.
OSHA has reviewed the requirements that will be imposed by the
final rule and determined that compliance with the final rule is
technologically feasible for all affected industries.
The revisions to OSHA's HCS will require manufacturers and
importers to reclassify aerosols, desensitized explosives, and
flammable gases in accordance with the new classification criteria and
make corresponding revisions to SDSs and labels. Compliance with these
requirements will mainly involve revisions to the presentation of
information and is not expected to involve any technological obstacles.
On the question of the technological feasibility of compliance with
the proposed provisions for reclassification criteria and the
subsequent revisions to SDSs and labels, ILMA expressed concern about
``whether software will even be capable of adopting the proposed rule
changes. Currently, the technology aims to make it easy to select
applicable fields for inclusion in the final SDS, but under the
proposed rule, the software would likely need narrative fields for
explanation, something that is not included in the widely-used
authoring programs'' (Document ID 0460, Att. 1, p. 5). The agency
believes ILMA's membership misunderstands the extent of what was
intended by the addition of clarifying language in paragraph (d), as
discussed elsewhere. Many commenters indicated a belief that the
information required on the SDS would be much more extensive and
comprehensive than OSHA intends. Because these revisions will not in
fact require a fundamental change to how SDSs and labels are prepared,
the agency does not believe that the available software is incapable of
generating compliant SDSs and labels. Additionally, even if ILMA's
understanding of the impact of these revisions was correct, sample
product data sheets and SDSs submitted into the record by NABTU (see,
for example, Document ID 0450, Atts. 2, 3, 4, 6, and 7) indicate that
narrative text is routinely provided in succinct form for sections on
hazard identification and safety warning, and thus there should be
existing software capable of including narrative content, contrary to
ILMA's statement. Further, as an industry partner with a large number
of chemical producers, importers, and distributors, ILMA seemingly
would have access to a wide range of SDSs for chemicals handled by ILMA
members and would therefore encounter multiple examples of the use of
narrative fields in SDS
[[Page 44197]]
production. Regardless, even if some programs do not currently have
this feature, a requirement is not technologically infeasible simply
because existing software programs are not tailored to that
requirement. See Lead I, 647 F.2d at 1272. ILMA has not demonstrated
that technological barriers prevent the development of compliant
software or otherwise hinder compliance with the revised requirements
for reclassification criteria on SDSs.
The revised requirements for the labeling of very small containers,
which would eliminate full labeling requirements for some containers
with a volume capacity of three ml or less, are expected to address
current feasibility issues related to labeling these containers. When a
label would interfere with the normal use of the container, and it is
not feasible to use pullout labels, fold-back labels, or tags
containing full label information, the rule will permit the container
to bear only the product identifier, which could be etched onto the
container itself. Similarly, the revised released-for-shipment
provisions will alleviate employer concerns regarding the
practicability of breaking down pallets of sealed, shrink-wrapped
packaged containers to replace labels when new hazards are identified.
OSHA requested public comment on any employer concerns about
technological feasibility associated with the provisions for labeling
very small containers or addressing the relabeling of containers that
have been released for shipment. No commenter challenged the
feasibility of the revised provisions. For comments affirming the
benefits of adopting this new labeling flexibility, see the section on
paragraph (f) in Section XIV, Summary and Explanation of the Final
Rule.
OSHA has determined that compliance with all of the requirements of
the final rule can be achieved with widely available technologies. No
new technologies are required for compliance with the modifications to
the HCS. Therefore, OSHA finds that there are no technological
constraints associated with compliance with any of the provisions in
this final rule.
F. Compliance Costs and Cost Savings
I. Introduction
This section presents OSHA's estimates of the costs and cost
savings expected to result from the revisions to the HCS. The estimated
costs and cost savings are based on employers achieving full compliance
with the new requirements of the rule. They do not include prior costs
and cost savings associated with firms whose current practices are
already in compliance with the revised requirements (where prior
compliance is possible).
The estimated costs and cost savings resulting from the revisions
to the HCS consist of five main categories: (1) the cost of revising
SDSs and labels for select hazardous chemicals to reflect chemical
reclassifications (per changes to Appendix B) and to conform to
language criteria in precautionary statements and other mandatory
language (per changes to Appendices C and D); (2) the cost of
management familiarization and other management-related costs
(associated with all of the revisions to the standard); (3) the cost of
training employees as necessitated by the revisions to the HCS (see
paragraph (h)(1)); (4) the cost savings due to the new released-for-
shipment provision (revisions to paragraph (f)(11)); and (5) the cost
savings from limiting labeling requirements for certain very small
containers (paragraph (f)(12)). The first three categories are
considered to be one-time costs and the last two categories are cost
savings that will accrue to employers annually. Although OSHA in the
PEA preliminarily determined that these were the only elements of the
revisions to the HCS that were expected to result in more than de
minimis costs or cost savings, the agency requested comments on whether
any other changes to the standard could cause employers to incur costs
or obtain cost savings.
The discussion following this introduction addresses public
comments on OSHA's preliminary analysis of compliance costs for each of
the five main cost categories listed above, as well as a section on
costs of the proposed changes regarding trade secrets, which OSHA
received several comments about.
The estimated compliance costs do not include any indirect costs or
impacts that may result from the reclassification or relabeling of
chemicals and products already subject to the HCS, such as possible
changes in production or in demand for products. Theoretically, such
impacts, if any, with regard to possible changes in the uses and
applications of affected chemicals, could result in costs or cost
savings. In the PEA, OSHA requested input from stakeholders on such
changes but received none. Therefore, no costs or other impacts
resulting from significant changes in the use or application of
affected chemicals are assessed in this FEA. This is consistent with
the determination OSHA made with regard to reclassification costs for
the 2012 final rule (77 FR 17625).
This FEA presents compliance costs and cost savings on a consistent
and comparable basis across various regulatory activities and expresses
all costs in annualized terms in the final summation. Annualized costs
and cost savings represent the most appropriate measure for assessing
the longer-term potential impacts of this rulemaking and for purposes
of comparing net costs across diverse regulations with a consistent
metric. In addition, annualized net costs are often used for accounting
purposes to assess the cumulative net costs of regulations on the
economy or specific parts of the economy across different regulatory
programs or across years.
As presented in this FEA (unless otherwise specified), a seven-
percent discount rate was applied to costs and cost savings arising in
future years to calculate the present value of these costs and cost
savings for the base year in which the standard becomes effective, and
the same discount rate was then applied to the total present value
costs, over a 10-year period, to calculate the annualized cost.\26\ The
economic effects using a three-percent discount rate are also provided
in the Excel spreadsheets that support this FEA, which can be found in
the docket (Document ID 0481).
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\26\ OSHA annualized costs for this final rule over a 10-year
period in accordance with E.O. 13563, which directs agencies ``to
use the best available techniques to quantify anticipated present
and future benefits and costs as accurately as possible.'' In
addition, OMB Circular A-4 states that regulatory analysis should
include all future costs and benefits using a ``rule of reason'' to
consider for how long it can reasonably predict the future and limit
its analysis to this time period. The 10-year annualization period
is the one OSHA has traditionally used in rulemakings. Note,
however, that OSHA used a 20-year annualization period for the 2012
HCS final rule (77 FR 17625), but that was because of the 5-year
phase-in of some provisions. This HCS final rule does not have any
phase-in provisions longer than 42 months, supporting OSHA's
decision to use a 10-year annualization period for this FEA. ).
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For the purpose of calculating loaded wage rates, OSHA did not
include an overhead labor cost in the FEA in support of the 2012 HCS
final standard. The Department of Labor (DOL) has since determined that
it is appropriate, in some circumstances, to account for overhead
expenses as part of the methodology used to estimate the costs and
economic impacts of OSHA regulations. For this FEA, in addition to
applying fringe benefits to hourly (``base'') wages, OSHA also applied
an overhead rate when estimating the marginal cost of labor in its
primary cost calculation.
[[Page 44198]]
Overhead costs are indirect expenses that cannot be tied to
producing a specific product or service. Common examples include rent,
utilities, and office equipment; however, there is no general consensus
on the cost elements that fit the definition of overhead in the context
of occupational safety and health. The lack of a common definition has
led to a wide range of overhead estimates. Consequently, the treatment
of overhead costs needs to be case-specific. For this FEA, OSHA has
adopted an overhead rate of 17 percent of base wages, which is
consistent with the overhead rate and methodology used for, among
others: (1) sensitivity analyses in the FEA in support of the 2017
final rule delaying the deadline for submission of OSHA Form 300A data
(82 FR 55761, 55765); and (2) the FEA in support of OSHA's 2016 final
standard on Occupational Exposure to Respirable Crystalline Silica (81
FR 16285, 16488-16492).\27\
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\27\ This methodology was modeled after an approach used by the
EPA. More information on this approach can be found at: U.S.
Environmental Protection Agency, Wage Rates for Economic Analyses of
the Toxics Release Inventory Program, June 10, 2002 (Document ID
0046). This analysis itself was based on a survey of several large
chemical manufacturing plants: Heiden Associates, Final Report: A
Study of Industry Compliance Costs under the Final Comprehensive
Assessment Information Rule, Prepared for the Chemical Manufacturers
Association, December 14, 1989 (Document ID 0048).
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To calculate the total labor cost for an occupational category,
OSHA added together three components: base wage + fringe benefits (45
percent of the base wage) \28\ + applicable overhead costs (17 percent
of the base wage). For example, the median hourly wage of an
Occupational Health and Safety Specialist is $37.77. Applying a fringe
markup of 45 percent (applied to the base wage) and an overhead rate of
17 percent (applied to the base wage) yields a fully-loaded hourly wage
of $61.18 ($37.77 x .450 = $17.00; $37.77 x 0.17 = $6.42; $37.77 +
$17.00 + $6.42 = $61.18 (unrounded)). Using this methodology, OSHA
calculated the fully-loaded labor cost for four occupational
categories: (1) Manager, Standard Occupational Classification (SOC)
code 11-0000, $83.62; (2) Logistics Personnel, SOC code 13-1081,
$60.37; (3) Production Worker, SOC code 51-0000, $31.09; and (4)
Occupational Health and Safety Specialist, SOC code 19-5011, $61.18.
(For further details, see Document ID 0481, tab ``Wages''.)
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\28\ In March 2023, the Bureau of Labor Statistics (BLS)
reported: ``Total employer compensation costs for civilian workers
averaged $42.48 per hour worked in December 2022 . . . Wages and
salaries cost employers $29.32 while benefits cost $13.17. . .'' The
fringe markup of 31 percent of total compensation ($13.17/$42.48) is
equivalent to a benefits markup of 45.0 percent (technically 0.449,
or 0.45 after rounding) in relation to the base wage ($13.17/
$29.32). (BLS, 2022b, Document ID 0471).
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Table VI-12 shows the estimated annualized compliance costs and
cost savings by cost category and by industry sector. All costs and
cost savings are reported in 2022 dollars. As shown in Table VI-12, the
total annualized net cost savings of compliance with the final rule is
estimated to be $29.8 million--consisting of about $5.1 million of
annualized costs and $35.0 million of annual cost savings. Note that
where tables in this FEA report estimated annualized costs, as in Table
VI-12, cost savings appear as a negative number.
As shown by the three-digit NAICS Subsectors 325 (for Chemical
Manufacturing) and 424 (for Merchant Wholesalers, Nondurable Goods) in
Table VI-12, most of the estimated compliance costs and cost savings
associated with the final rule will be incurred or realized by the
chemical manufacturing industry and its distributors. However, the
table also shows that familiarization costs will be spread across most
manufacturing and wholesale industries in the U.S. economy subject to
OSHA's jurisdiction, reflecting the fact that employee exposures to
hazardous chemicals occur in many industry sectors.
For purposes of annualizing costs for this FEA, OSHA estimated that
all compliance costs will be incurred in the first year. This
simplifying methodological assumption may upwardly bias the compliance
costs for chemical reclassification, revised precautionary statements,
management familiarization, and training, insofar as the final rule
schedules compliance dates in phases of 18 months, 24 months, 36
months, and 42 months after the effective date. Nonetheless, despite
the simplifying assumption of an immediate implementation of all
provisions in the final rule, OSHA believes that its final
determination of economic feasibility and regulatory flexibility
certification is supported by the rulemaking evidence.
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II. Estimation of Compliance Costs and Cost Savings
The remainder of this section explains how OSHA calculated the
estimated compliance costs and cost savings arising from the final rule
by describing the data and methodology used and addresses relevant
comments from stakeholders.
As explained above, the major elements of the revisions to the HCS
that involve compliance costs or cost savings are: (1) the cost of
revising SDSs and labels for select hazardous chemicals to reflect
chemical reclassifications (per changes to Appendix B) and to conform
to language criteria in precautionary statements and other mandatory
language (per changes to Appendices C and D); (2) the cost of
management familiarization and other management-related costs necessary
to ensure compliance with the revised standard (associated with all of
the revisions to the standard); (3) the cost of training employees as
necessitated by the changes to the HCS (see HCS 2012 paragraph (h)(1));
(4) cost savings from the new released-for-shipment provision
(revisions to paragraph (f)(11)); and (5) cost savings from limiting
labeling requirements for certain very small containers (new paragraph
(f)(12)).
The estimated compliance costs and cost savings presented in this
analysis of the revisions to the HCS are based partly on analysis
conducted in support of the 2012 HCS final rule (77 FR 17605-17683) and
partly on new analysis prepared with the assistance of OSHA's
contractor, ERG.
The estimated costs of compliance with most provisions of the final
rule involve wages paid for the labor hours required to fulfill the
requirements. In some cases, compliance could be achieved by purchasing
services or products in lieu of paying employees directly. The
estimated compliance costs are intended to capture the resources
required for compliance regardless of how individual establishments may
choose to achieve compliance.
With the exception of the provisions addressing precautionary
statements and other mandatory language, for this cost analysis OSHA
estimated a baseline compliance of zero percent. The agency's estimate
of baseline compliance for the revisions in Appendices C and D
addressing precautionary statements and other mandatory language are
discussed below in the section titled Revisions to SDSs and Labels Due
to Revised Precautionary Statements.
III. Costs Associated With Reclassifications and Revisions to Safety
Data Sheets and Labels
The revisions to the HCS will not change the existing requirement
for firms that sell hazardous chemicals to employers to provide
information about the associated hazards. Information must be presented
in an SDS in the format specified in the standard, and some information
must also be presented on product labels. The final rule will require
affected chemical manufacturers to revise SDSs and labels for select
hazardous chemicals to reflect chemical reclassifications (Appendix B)
and to conform to language criteria in precautionary statements and
other mandatory language (Appendices C and D).
It is OSHA's understanding that chemical manufacturers and
importers periodically review, revise, and update the electronic
templates they use to create SDSs and labels. Changes are made, for
example, as information regarding specific hazards becomes available,
new information about protective measures is ascertained, or revisions
are made to product information and marketing materials. Labels and
SDSs are also produced and modified when products are first introduced
to the market or when products change. Therefore, there is a regular
cycle of change for these documents (see the FEA of the 2012 final rule
(77 FR 17634-17637) for a discussion of factors that compel employers
to update SDSs and labels voluntarily). OSHA received comments from the
American Cleaning Institute (ACI) indicating that a longer compliance
window would facilitate companies only needing to make one round of
revisions to their labels because if a company knows they already need
to make one revision to an SDS or label within a certain window of time
they will make all changes at the same time, thereby reducing costs
(Document ID 0424, Tr. 53-54). As explained in the paragraph (j)
discussion in Section XIV., Summary and Explanation of the Final Rule),
OSHA is extending the phase-in period beyond what the agency proposed
in the NPRM.
Also similar to the rule in 2012, OSHA anticipates that many firms
have implemented or are beginning to implement hazard
reclassifications, SDS revisions, software modifications, and other
changes associated with this proposed rule, because these provisions
are generally anticipated to be adopted as part of the implementation
of the GHS in countries and regions around the world and Canada has
already amended the HPR to align with Rev. 7. Since some other
countries are already implementing the GHS, companies in the U.S. that
ship to those countries are already having to comply with the GHS for
products being exported (77 FR 17636).
The final rule requires limited changes to some SDSs and labels.
Given the phase-in period for the changes to the standard,\29\ which
OSHA has extended from what was proposed in the NPRM, the agency
expects that chemical manufacturers and importers will be able to phase
in revisions to their labels and SDSs in accordance with the normal
cycle of change, and therefore will not need to replace existing labels
or SDSs.
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\29\ The final standard requires that the revisions become
effective 60 days after publication (paragraph (j)(1)); chemical
manufacturers, importers, and distributors evaluating substances
comply with all modified provisions within eighteen months after the
effective date (paragraph (j)(2)(i)); employers updating alternative
labeling, hazard communication programs, and training for substances
comply with all modified provisions within two years after the
effective date (paragraph (j)(2)(ii)); chemical manufacturers,
importers, and distributors evaluating mixtures comply with all
modified provisions within three years after the effective date
(paragraph (j)(3)(i)); and employers updating alternative labeling,
hazard communication programs, and training for mixtures comply with
all modified provisions within three and a half years (paragraph
(j)(3)(ii)).
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OSHA has, however, estimated costs for the time it will take to
update the electronic files that will be used to generate new SDSs and
labels in accordance with the revisions to the HCS. OSHA developed cost
estimates based on the methodology used in its FEA in support of the
2012 HCS final rule (77 FR 17634-17637). The estimated compliance costs
represent the incremental costs that will be incurred to achieve
compliance with the final rule. These estimated costs will be in
addition to the costs that already need to be incurred to comply with
applicable requirements of the 2012 HCS that remain in place and
represent the time it will take to identify the changes that need to be
made to the relevant computer files (i.e., the files that are used to
generate SDSs and labels) and then to make those changes.
Producers of affected chemicals already had an obligation under the
2012 HCS, which continues unchanged in this final rule, to ensure that
the information provided in their SDSs and labels is accurate and
current (paragraphs (f)(2) and (g)(5)). They also are generally
required to revise SDSs and labels in accordance with new information
regarding hazards that may be associated with their products
[[Page 44204]]
(paragraphs (f)(11) and (g)(5)). For every affected product that is
newly created, reformulated, mixed with new ingredients, modified with
new or different types of additives, or has any changes made in the
proportions of the ingredients used, chemical manufacturers and
importers are required, under the 2012 HCS and this final rule, to
review the available hazard information (paragraph (d)(2)), to classify
the chemical in accordance with applicable hazard criteria (paragraph
(d)(1)), and to develop corresponding SDSs (paragraph (g)) and labels
(paragraph (f)). OSHA is not estimating costs for activities already
required; rather, the agency is estimating costs for activities that
will be newly conducted in conformance with the proposed revisions to
chemical reclassifications (Appendix B) and language criteria in
precautionary statements and other mandatory language (Appendices C and
D).
IV. Revisions to SDSs and Labels Due to Chemical Reclassification
In the PEA, OSHA identified the NAICS industries involved in the
manufacture of aerosols, desensitized explosives, or flammable gases
and affected by the proposed requirements for chemical
reclassification. Of course, not all chemicals covered in these NAICS
industries are aerosols, desensitized explosives, or flammable gases.
In the PEA, OSHA estimated that approximately 50 percent of the SDSs
(or more specifically, 50 percent of the electronic templates (files)
that are used to produce SDSs and labels) \30\ in these NAICS
industries would be affected by the proposed requirements for aerosols,
desensitized explosives, and flammable gases.
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\30\ In this section OSHA uses the terms ``SDSs'' and ``SDSs and
labels'' interchangeably because the agency's understanding is that
one electronic file is used, from which both SDSs and labels can be
generated, and therefore there is not a separate calculation of the
number of electronic files for labels.
---------------------------------------------------------------------------
OSHA in the PEA derived the number of directly affected electronic
files for SDSs and labels by applying the 50 percent factor to the
overall number of affected SDSs (electronic files). For example, in
NAICS 211130, the overall number of affected SDSs (technically, the
number of electronic files) was 15,810 (Table VI-5 in the PEA).
Applying a factor of 50 percent, OSHA estimated the number of SDSs
(electronic files) that would be directly affected by the
reclassification provision as 7,905. All of the preliminary estimates
of directly affected SDSs (electronic files) were similarly derived
from Table VI-5 (in the PEA), but only those NAICS industries with
affected SDSs (electronic files) were reported in the PEA.
The estimated compliance costs associated with the reclassification
of hazards and related changes to SDSs and labels are directly related
to the number of chemicals for which electronic files will need to be
updated in order to prepare updated SDSs and labels. OSHA developed
estimates of the number of potentially affected SDSs for each of the
industries producing the corresponding chemicals and products (based on
estimates of the total number of SDSs (and the supporting electronic
files) by industry as shown in Table VI-5). In the PEA, OSHA expected
that downstream users, distributors, and wholesalers would continue to
rely on SDSs and labels provided by manufacturers to fulfill their
obligations under the OSHA standard and would not incur costs
associated with chemical reclassification under the proposed revisions
to the HCS. It was OSHA's understanding that this has been the practice
for decades, and no comments in the record challenged that
understanding.
In the PEA, OSHA presented preliminary estimates of the amount of
time the agency expected it will take to update electronic files for
SDSs and labels under the proposed revisions to the standard. OSHA
believed that the estimates provided in the PEA were reasonable because
they reflected only the incremental time needed to identify affected
labels and SDSs (electronic files) and to update electronic files
through modification of the templates that are used to prepare labels
and SDSs, without allocating costs to any time that would be spent
updating files in the absence of any revisions to the HCS.
OSHA also believed that the estimated time to update SDSs and
labels (electronic files) used in this analysis represented a
reasonable average for most chemicals. In the FEA in support of the
2012 HCS final rule (77 FR 17635-17637), OSHA estimated that a Health
and Safety Specialist would spend between three and seven hours per SDS
requiring reclassification--with smaller entities, having fewer SDSs,
incurring larger costs per SDS. The revisions to the HCS in this final
rule are significantly more limited in scope than the 2012 final rule,
with fewer affected hazard categories and more limited changes;
however, they still present opportunities for scale efficiencies in
reclassification. As a result, OSHA estimated that a Health and Safety
Specialist would spend about 25 percent as much time to reclassify a
chemical as OSHA estimated for the 2012 HCS rule--depending on
establishment size, from 0.75 hours to 1.75 hours per SDS (electronic
file) requiring reclassification (1.75 hours per SDS for establishments
with fewer than 100 employees; 1.25 hours per SDS for establishments
with 100-499 employees; and 0.75 hours per SDS for establishments with
500 or more employees).\31\ At a loaded hourly wage (including
overhead) of $58.00 for a Health and Safety Specialist, this resulted
in unit costs in the PEA of $101.51, $72.51, and $43.50 per SDS for
small, medium, and large establishments, respectively. Multiplying
these unit costs by the estimated number of affected chemicals (i.e.,
electronic files) and summing the totals yielded an undiscounted one-
time estimated cost of $6.4 million for affected employers to comply
with this provision. Annualizing this one-time cost using a seven
percent discount rate over a ten-year period results in estimated
annualized costs of approximately $915,095. OSHA invited public
comments on its preliminary projection that 50 percent of the
electronic files for SDSs and labels would be affected in these
industries and the other preliminary assumptions and unit estimates
presented in the PEA and described above.
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\31\ Note that OSHA estimated no baseline compliance for
chemical manufacturers already having revised electronic files to
reflect reclassified chemicals as specified in the proposed rule;
the current HCS does not allow SDSs or labels to display chemical
classifications that are not in conformance with the current rule.
---------------------------------------------------------------------------
OSHA received some comments on its general analysis in this
section. NACD characterized the updates to SDSs as ``a major
undertaking for chemical manufacturers and distributors'' and further
noted, ``[t]aking into account not only the actual updates to these
documents by vendors or company personnel, but also company staff
review time, supply chain communications, and training, NACD members
estimate that the cost of updating a single SDS ranges from $400 to
nearly $1600'' (Document ID 0465, p. 2).
As noted earlier in this FEA, ILMA surveyed its members on impacts
of the proposed standard. On the question of the incremental costs of
updating SDSs, ILMA submitted the following summary of survey
responses. They noted that, of 16 respondents, 12 indicated they
authored 400 or more SDSs (one company reported between 7,000 and
8,000), and that they estimated the cost
[[Page 44205]]
of updating each SDS as $400-600. They also stated that ``Some
respondents to the survey noted that, while updates to labels and SDS
occur on a regular basis, these updates usually involve editorial
changes made to incorporate information such as name changes. Therefore
. . . the $400-$600 cost estimate to review each and every SDS needs to
be included as incremental costs, as those costs would not be part of
the companies' `routine' compliance costs'' (Document ID 0444, Att. 1,
pp. 1-2).
In their comments, the North American Insulation Manufacturers
Association (NAIMA) described the contractual arrangements and
operational practices typically conducted by their members when there
arises the need for updating SDSs and labels. In particular, they noted
that every time a change is made to a label, the manufacturer must
redesign the entire label to make sure it all fits on the packaging,
which is expensive, and some label printers still use printing plates
which need to be replaced. They also noted that they spent time
reviewing materials received from contractors and getting labels
translated into other languages, and that there were often costly
delays in receiving packaging materials. They argued that OSHA needed
to account for these costs (Document ID 0461, pp. 3-4). Several
commenters discussed costs of labels specifically. The American
Coatings Association (ACA) testified that member employers would incur
substantial additional expense to update labels if the proposed
revisions were published as the final rule and stated that members had
indicated costs between $300,000 and $800,000 to update their labels
alone. They also noted that disposal of existing labels can be two to
three percent of labeling costs and that small businesses cannot absorb
these costs as operating expenses (Document ID 0425, Tr. 109-110).
Similarly, Ameren stated ``Ameren would incur an additional cost for
having to re-print and replace current labels based on the new OSHA
changes. The cost is estimated at $5 [m]illion and would take over two
years to complete'' (Document ID 0309, p. 5). OSHA notes that ACA and
Ameren did not provide details underlying their estimates so the
magnitude and severity of the cost increase cannot be evaluated by OSHA
without further information on baseline costs and company revenue that
factor into these estimates. Moreover, the final standard does not
include the proposed requirement that a released-for-shipment date
appear on the label, which will lower the labeling costs for
manufacturers, importers, and distributors compared to what they
anticipated at the time comments were submitted.
The Sporting Arms and Ammunition Manufacturers' Institute (SAAMI)
voiced concerns similar to those of ACA with regard to labeling costs
and noted the costs of new printing plates and disposal of existing
labels, particularly for manufacturers who may have as many as 4,000
products that need to go through this process (Document ID 0423, Att.
1, Tr. 84). Hach also noted skepticism regarding the idea that these
costs could be absorbed under the normal costs of business, partly due
to the limited space on their labels (Document ID 0425, Tr. 102). Hach
further commented on the costs of the proposed rule by providing
information on its cost data for SDS templates provided by a software
service vendor. They provided data on two different vendors, one of
which cost $230,000 to purchase, $120,000 in annual maintenance costs
for global regulatory updates and another $1,100 for annual maintenance
specific to SDSs for the United States. The other vendor cost $60,215
for the initial implementation of the templates and $100,825 for an
annual license (Document ID 0427, p. 2).
OSHA does not agree with these commenters' arguments that the
preliminary cost analysis did not account for the costs for new or
updated printing plates, the disposal of existing labels, and other
operational changes associated with the proposed revisions to the
reclassification requirements in HCS. As noted earlier, OSHA's
understanding is that in many cases responsible parties would have
needed to update their SDSs and labels within the extended compliance
time frame even if there were no updates to the HCS, and therefore some
of these costs (such as label disposal and new printing plates) would
already be incurred. The agency expects that responsible parties will
fold the HCS updates into those standard updating cycles so that they
only need to incur these costs once and this means the HCS updates are
not creating those costs. Therefore, OSHA is not persuaded that the
compliance burden described by the stakeholders discussed above will
exceed the customary and usual business practices or the business
practices expected during the implementation timeline prescribed in
final paragraph (j) for chemical employers affected by the final rule
and is thus not taking additional costs for those issues. OSHA is,
however, adjusting the time it expects it to take responsible parties
to update the electronic SDS and label files, partly based on the
content of these comments (see discussion below).
OSHA also received several comments expressing concerns regarding
the economic costs of the proposed language in paragraph (d)(1). The
United States Beet Sugar Association, the National Grain and Feed
Association, the North American Millers Association, Corn Refiners
Association, the National Oilseed Processors Association, and the
United States Chamber of Commerce (USBSA et al.) stated that the
proposed language in (d)(1) would ``greatly increase the cost of
chemical classification'' (Document ID 0325, p. 9). The American
Chemistry Council (ACC) surveyed their membership to identify and
characterize current practices on communicating hazards within their
industry. Based on that information, ACC stated that OSHA had failed to
account for hazard classification costs associated with the proposed
revisions to paragraph (d)(1), including the large number of SDSs that
would need to be changed, the amount of time required to produce the
SDSs, and the software costs associated with needing new or updated
technology to comply. They argued that this could cost manufacturers
and importers millions of dollars (Document ID 0468, pp. 3-5). The ACC
survey results included statements from their membership with estimates
about the time and costs associated with the proposed paragraph (d)(1),
including an estimate that it would take about 16 hours to update each
SDS and about 50 percent of products would require communication with
customers to ascertain downstream uses, which would result in an
additional 17,500-70,000 hours of work. Concern was also expressed that
this would cover as many as 5,000-7,000 products that were not
previously within the scope of the HCS (Document ID 0468, p. 10).
The NAIMA expressed concerns about the proposed implementation
schedule and the costs of compliance moving forward under the proposed
language in paragraph (d)(1). Specifically, they noted ``it appears
that every newly discovered hazard of the substance identified by a
chemical manufacturer's ongoing investigation of downstream hazards
would trigger the three- and six-month updating provisions of the HCS
for SDSs and labels, which could lead to a continuous series of
reclassifications triggering those updating requirements'' and argued
that ``[e]ach SDS revision cascading down would incur costs which do
not seem to have been adequately accounted in OSHA's cost-
[[Page 44206]]
benefit analysis'' (Document ID 0461, p. 2).
The American Composite Manufacturers Association (ACMA) stated that
the proposed changes to paragraph (d)(1) would result in upstream
chemical suppliers needing to perform a hazard analysis similar to what
is required under OSHA's Process Safety Management of Highly Hazardous
Chemicals (PSM) standard and that ``[t]he [process hazard analyses
(PHAs)] that would be required by OSHA's proposed change to
1910.1200(d)(1) would extend to every hazardous chemical in the U.S.
and would cover every use of a flammable liquid or gas as a fuel.''
They also noted that ``[a]ccording to EPA, the TSCA chemical inventory
contains 86,557 chemicals of which 41,864 are active. Any reasonably
chosen ratio of the number of active hazardous chemicals in the EPA
inventory to the 110 HHCs covered by the PSM standard suggests the
costs of compliance with OSHA's proposed change to 1910.1200(d)(1)
would be enormous'' (Document ID 0318, p. 8). OSHA notes that ACMA also
asserted in their comment that the proposed language in paragraph
(d)(1) is economically infeasible but did not provide financial data to
corroborate the assertion. As explained in Section G of this FEA, OSHA
has determined based on the record evidence that the requirements of
this final rule are economically feasible.
The Plastics Industry Association (PLASTICS) also likened the
proposed language in paragraph (d)(1) to PHAs and discussed the
associated burden of collecting the process safety information for
``nearly one million hazardous chemical products . . . previously
estimated . . . to be in U.S. workplaces'' as well as the need to
determine foreseeable emergencies, ``some of which may produce new
chemicals'' (Document ID 0314, Att. 1, p. 12) (footnote omitted). They
indicated that such a requirement would require upstream suppliers to
hire personnel to collect the necessary information as well. They
argued that OSHA needed to incorporate the costs of this provision and
stated that OSHA had not done so (Document ID 0314, Att. 1, pp. 10-12).
They stated that ``[f]or a chemical with broad applications,
classifying it to include all of the classified hazards of every
downstream reaction, and then creating an SDS to cover all of these
issues would be a monumental, infeasible and counterproductive task.''
(Document ID 0467, p. 21). ACC's survey of its members also discussed
the role of PHAs in company operations and the rigorous procedures
necessary to develop and communicate such analyses (Document ID 0468,
pp. 6-7).
In the Summary and Explanation for paragraph (d), OSHA responds to
the concerns voiced by stakeholders about the scope of paragraph (d)
and the comparisons to PHAs. In its response, OSHA states that it did
not intend for an upstream supplier or manufacturer to identify and
classify every single hazard associated with the downstream use of
chemicals, only those where the manufacturer knows or can reasonably
anticipate the chemical's uses. OSHA has changed the language in
paragraph (d)(1) from the proposed language in the NPRM to clarify this
scope and concludes that many of the comments discussing the economic
ramifications of this proposed language were based on this
misunderstanding of what OSHA intended SDS and label preparers to do.
In response to the comments on OSHA's preliminary unit cost
estimates for chemical reclassification on SDSs and labels in relation
to paragraph (d)(1), the agency has reviewed the preliminary number of
affected SDSs and labels and the preliminary time estimates for
updating and expanding the use of SDSs and labels.
As noted earlier, OSHA in the PEA derived the number of directly
affected electronic files for SDSs and labels by applying the 50
percent factor to the overall number of affected SDSs (electronic
files) from Table VI-5. None of the public criticisms quoted above
specifically referenced the 50 percent factor. Many of the commenters
indicated that they believed the HCS updates to paragraph (d)(1) would
impact many more SDSs than OSHA accounted for in its PEA but, as OSHA
states in the Summary and Explanation for paragraph (d), this
requirement already existed under the 2012 HCS and the language in
paragraph (d) is merely a clarification of the existing requirements.
Because many commenters misinterpreted the scope of what OSHA was
proposing, the agency does not believe these comments are
representative of the number of SDSs that will need to be updated and
the agency does not take costs associated with clarifications that do
not change the underlying requirements of the standard. Therefore, for
this FEA OSHA has maintained the percentage factor of affected SDSs and
labels estimated in the PEA at 50 percent and the industries it expects
will be impacted by reclassification requirements.
As discussed earlier in this section, OSHA presented in the PEA
estimates of the amount of time it will take to update electronic files
for SDSs and labels under the proposed revisions to the standard.
OSHA's estimates in the PEA reflected the agency's initial assessment
of the incremental time needed to identify affected labels and SDSs
(electronic files) and to update electronic files through modification
of the templates that are used to prepare labels and SDSs, without
allocating costs to any time that would be spent updating files in the
absence of any revisions to the HCS.
In the FEA in support of the 2012 HCS final rule (77 FR 17635-
17637), OSHA estimated that a Health and Safety Specialist would spend
between three and seven hours per SDS requiring reclassification--with
smaller entities, having fewer SDSs, incurring larger costs per SDS.
The revisions to the HCS in this final rulemaking are significantly
more limited in scope than the 2012 final rule, with fewer affected
hazard categories and more limited changes; nonetheless, based on
public comments, OSHA recognizes that affected employers may face
adjustments to their schedule for updating SDSs and labels due to
chemical reclassification. OSHA also recognizes based on comments that
it may have underestimated in the 2012 HCS FEA and the 2021 PEA the
time and costs associated with identifying hazards from downstream
uses. While those costs have already been incurred for all existing
products because this is an existing requirement, OSHA recognizes that
for the products undergoing reclassification (aerosols, flammable
gases, and desensitized explosives), these costs will be incurred again
and is therefore adjusting upwards its time estimates. As a result,
OSHA in this FEA estimates that a Health and Safety Specialist would
spend about 30 percent (increased from 25 percent in the PEA) as much
time to reclassify a chemical as OSHA estimated for the 2012 HCS rule--
depending on establishment size, from 0.90 hours to 2.10 hours per SDS
(electronic file) requiring reclassification (2.10 hours per SDS for
establishments with fewer than 100 employees; 1.50 hours per SDS for
establishments with 100-499 employees; and 0.90 hours per SDS for
establishments with 500 or more employees).\32\ At a loaded hourly wage
(including overhead) of $61.18 for a Health and Safety Specialist, this
would result in unit costs of $128.48, $91.77, and $55.06 per SDS for
small, medium, and large establishments, respectively.
[[Page 44207]]
Multiplying these unit costs by the estimated number of affected
chemicals (i.e., electronic files) and summing the totals yields an
undiscounted one-time estimated cost of $8.2 million for affected
employers to comply with this provision. Annualizing this one-time cost
using a 7 percent discount rate over a 10-year period results in
estimated annualized costs of approximately $1,168,932 for
reclassification in accordance with the criteria specified in the
revisions to the HCS.
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\32\ Note that OSHA estimated no baseline compliance for
chemical manufacturers already having revised electronic files to
reflect reclassified chemicals as specified in the final rule; the
current HCS does not allow SDSs or labels to display chemical
classifications that are not in conformance with the current rule.
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OSHA does not agree, however, with commenters who argued that the
proposed language in paragraph (d)(1) would create burdens that are
cost prohibitive. First, as discussed, the requirement to classify
based on downstream hazards already existed and OSHA is simply
clarifying that requirement by adding this language to paragraph
(d)(1). Additionally, OSHA received comments and testimony from several
entities regarding existing SDSs that include information about
downstream hazards and companies that maintain product stewardship
programs to address these issues. NABTU cited field observation of
companies who routinely include on SDSs and labels information on
reasonably anticipated downstream use of products: ``[i]t is . . .
worth noting that there are companies producing building materials that
are responsibly anticipating the downstream uses of their products and
creating product stewardship programs aimed at improving recognition
and control of hazards during the life cycle of their products. Where
it is reasonable to assume that manufacturers can anticipate their
products' `normal conditions of use,' it is equally reasonable--and
critically important--to require those manufacturers to include the
attendant chemical reaction hazard information on their SDSs and
labels, and to do so in a consistent manner'' (Document ID 0464, p. 5).
NIOSH stated that they are aware of more manufacturers developing
this type of product stewardship to inform downstream users (Document
ID 0423, Tr. 39; 0456, Att. 2, p. 2). ACC also submitted information on
several product stewardship programs their organization undertakes to
inform downstream users of potential hazards that may result upon use
of their chemicals (Document ID 0468, p. 5). ACC product stewardship
resources include technical and regulatory data sheets, literature,
product handling guidelines, site visits, and special instructions for
safe handling of materials of more concern (Document ID 0468, p. 5).
These comments highlight the significant and ongoing stewardship
initiatives among chemical producers, importers, and distributors and
substantiate OSHA's preliminary judgment of the economic feasibility of
the revised HCS standard. Therefore, in OSHA's view, the modest
adjustment to the preliminary unit cost estimate in this FEA reflects,
in approximate terms, current industry practices in the
reclassification of chemical hazards on SDSs and labels.
BILLING CODE 4510-26-P
[[Page 44208]]
[GRAPHIC] [TIFF OMITTED] TR20MY24.174
[[Page 44209]]
[GRAPHIC] [TIFF OMITTED] TR20MY24.175
[[Page 44210]]
[GRAPHIC] [TIFF OMITTED] TR20MY24.176
[[Page 44211]]
BILLING CODE 4510-26-C
V. Revisions to SDSs and Labels Due to Revised Precautionary
Statements, etc.
The revisions to the HCS require establishments to revise their
electronic templates for SDSs and labels to conform to formatting and
language criteria in precautionary statements and other mandatory
language specified in Appendices C and D. Under the changes to the
standard, affected establishments must update labels and SDSs for
select hazardous chemicals to include updated signal word(s), hazard
statement(s), pictogram(s), and precautionary statement(s) for each
hazard class and associated hazard category (see paragraphs (f) and
(g)). The modification of SDSs and labels under the revisions in
Appendices C and D involves conforming to formatting and language
standards, but does not require any testing, studies, or research. As
previously stated, OSHA believes that chemical manufacturers and
importers generally review, revise, and update their electronic
templates for SDSs and labels periodically, such that there is a
regular cycle of change for these documents.\33\ The changes to the
appendices require only limited changes to the electronic content of
SDSs and labels, and, as explained previously and in the PEA, OSHA
expects that the phase-in period for the changes to the standard will
allow chemical manufacturers and importers to take advantage of the
normal cycle of change to phase in the revisions to their labels and
SDSs, and therefore that it will not be necessary to replace existing
labels or SDSs. OSHA also believes that the extended phase-in period
will accommodate the need for the purchase of software packages or
renewal of licenses for SDSs and labels, impacts noted by ILMA at the
public hearings (Document ID 0404, Att. 1, p. 2).
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\33\ See discussion in the preamble to the 2012 HCS final rule
(77 FR 17634).
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The estimated compliance costs for revising electronic templates
for SDSs and labels to conform to formatting and language criteria in
precautionary statements and other mandatory language specified in the
revisions to Appendices C and D represent the incremental costs that
will be incurred to achieve compliance with the final changes to the
appendices. In the PEA, OSHA estimated that the time needed to revise
electronic templates for labels and SDSs to comply with the proposed
revisions to Appendices C and D would vary by establishment size and
would be equal to 10 percent of the unit time (from three to seven
hours per SDS (electronic template)) estimated in the 2012 FEA (77 FR
17635-17637), as the changes the proposed revisions would require are
relatively minor in comparison to the types of changes costed in
2012.\34\ OSHA estimated that Health and Safety Specialists would spend
0.7 hours per SDS (electronic template) in small establishments with
fewer than 100 employees; 0.5 hours per SDS in medium establishments
with 100 to 499 employees; and 0.3 hours per SDS in large
establishments with 500 or more employees to comply with the proposed
mandatory changes to Appendices C and D.
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\34\ By comparison, the 2012 rule changes included completely
revised SDS formats, the addition of pictograms, and various other
revisions for specific SDS sections and chemical designations. Note
that there are no estimated new software costs associated with the
proposed revisions to the standard, as there were for the 2012 final
rule, because OSHA expects that the necessary software is already in
place in those larger firms for which the software is economically
justified.
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As in the FEA for the 2012 HCS final rule, OSHA anticipates that
some manufacturers, particularly larger ones heavily involved in
international trade, are more likely because of their size to have
created SDSs and labels that need to be GHS-compliant and therefore are
likely to have already adopted the mandatory language proposed in
Appendices C and D. For the affected NAICS industries, OSHA estimates
baseline compliance rates of 75 percent for establishments with 500 or
more employees, 25 percent for establishments with 100 to 499
employees, 5 percent for establishments with 20 to 99 employees, and 1
percent for establishments with fewer than 20 employees.\35\ These
baseline compliance rates are the same ones OSHA used in the 2012 FEA
(77 FR 17636).
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\35\ As noted above, because the current HCS does not allow SDSs
or labels to display chemical classifications that are not in
conformance with the current rule, OSHA estimated no baseline
compliance for chemical manufacturers already having revised
electronic files to reflect reclassified chemicals as specified in
the proposed rule. With respect to the mandatory language proposed
in Appendices C and D, however, SDSs and labels could present
standards stricter than seen under previous GHS revisions (for
example, if mandatory language is adopted internationally by
consensus) and still remain in conformance with the current HCS
standard. Therefore, baseline compliance can be non-zero for
industry practices involving use of precautionary statements and
other mandatory language.
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Multiplying the number of affected SDSs (electronic files) by the
unit cost of Health and Safety Specialists, and accounting for the
relevant non-compliance rates,\36\ results in an estimated total one-
time cost of $18.9 million associated with revising SDSs and labels to
conform to the proposed appendix language on precautionary statements
and other mandatory language. Annualizing this one-time cost using a
seven percent discount rate over a 10-year period results in estimated
annualized costs of approximately $2.7 million for affected employers
to revise SDSs and labels to comply with the proposed revisions to
Appendices C and D.
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\36\ That is, mathematically, (1--the relevant baseline
compliance rate). Estimated non-compliance rates are shown in Column
6 of Table VI-14 by employment size for each affected NAICS
industry.
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OSHA requested comments on the preliminary unit cost estimates and
other underlying assumptions for the preliminary cost analysis of
revisions to the mandatory appendices. There were no comments
specifically addressing the unit cost estimates and other
methodological assumptions underlying OSHA's preliminary cost estimate.
Earlier in this FEA, OSHA responds to the comments voiced by
commenters about label costs specifically. To the extent that new
precautionary statements are needed on labels due to reclassification,
OSHA believes it has incorporated those costs into its upward
adjustment of the costs of reclassification and will not double count
those costs by also increasing its estimate of costs for updating
precautionary statements and other mandatory language. Thus, for this
final analysis of the incremental compliance costs associated with the
mandatory appendices, OSHA applied the unit labor time and baseline
compliance assumptions from the PEA, and, combined with fully-loaded
2022 wage rates, generated final cost estimates, by NAICS category. As
noted earlier, these estimated costs are in addition to the costs that
are already incurred to comply with applicable requirements of the
existing HCS.
NACD questioned OSHA's preliminary time allocation to the employer
class sizes (small, medium and large companies) in the estimation of
costs. NACD cited an estimate for a member company that has ``10,000
SDSs to review to meet the new standard and 4,000 to update. Even at
OSHA's .7 hours per SDS, that is 16 months of dedicated work''
(Document ID 0329, p. 11). Additionally, they stated that ``OSHA's
estimates are only somewhat realistic if a company has in-house SDS
authoring software and has maintained formulas and data used in
classification. If updated formulas or other data need to be obtained .
. . these documents will take significantly longer to update.''
Alternatively, they noted that if
[[Page 44212]]
companies use a vendor, they will likely be charged between $400 and
$800 for the production of an SDS and label for a single product
(Document ID 0329, p. 11).
To the extent that NACD is concerned that some chemical
distributors may need additional time to comply, either with additional
in-house staff or with contractors, OSHA has updated the final rule to
provide for eighteen to thirty-six months (depending on the nature of
the chemical compound) following publication of the rule for chemical
distributors to implement compliance with all modified provisions. To
the extent that NACD is arguing that OSHA has underestimated the in-
house labor costs for updating SDSs and labels, they have only argued
that OSHA has possibly underestimated for a subset of companies and has
not provided data on how OSHA could differentiate which companies this
would be true for or how significant they think OSHA's underestimates
are, so OSHA is unable to evaluate this claim. And finally, to the
extent that NACD is arguing that the vendor prices will result in
higher costs than the agency estimates, as OSHA has previously stated
it believes that updates are going to be folded into the normal cycle
of updates for which companies would also use these contractors so the
full cost of a contractor producing an SDS or label is not attributable
to the HCS updates as NACD suggests.
Table VI-14 shows the estimated costs associated with modifications
to electronic templates for SDSs and labels to conform to formatting
and language criteria in precautionary statements and other mandatory
language specified in the revisions to Appendices C and D by NAICS
industry and establishment size. The NAICS industries listed in Columns
1 and 2 of Table VI-14 are those that OSHA expects will need to update
SDSs and labels under the revisions to Appendices C and D. The
industries included are the ones OSHA identified as incurring costs for
SDSs in the FEA in support of OSHA's 2012 HCS final rule (77 FR 17644-
17650). The estimated costs associated with the revisions to the
appendices are directly related to the number of SDSs (or, in other
words, the number of electronic templates) affected. These numbers were
previously derived and presented in Tables VI-5, VI-6, and VI-7.
The estimates of total costs in Table VI-14 are included within a
broader cost category shown earlier in the aggregate costs presented in
Table VI-12. Column 5 of Table VI-12 displays, by NAICS code, the
combined annualized cost estimates for reclassifying chemicals (from
Table VI-13) and revising SDSs and labels to be consistent with the
precautionary statements and other language specified in the revisions
to the mandatory appendices (from Table VI-14).
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[[Page 44222]]
VI. Management Familiarization and Other Management-Related Costs
In order to implement the new requirements in the HCS or determine
whether they need to implement any of the revisions to the standard,
all employers currently covered by the standard will need to become
familiar with the updates OSHA is making in this final rule. The nature
and extent of the familiarization required will vary depending on the
employer's business.
In the 2012 HCS final rule (77 FR 17637-17638), OSHA estimated that
eight hours of time per manager, or an equivalent cost, would be
associated with the necessary familiarization and implementation of
revisions to hazard communication programs in affected establishments
in the manufacturing sector.\37\ This final rule requires some changes
to hazard communication programs in affected establishments, but those
changes are significantly less extensive than those required by the
2012 rule. Therefore, OSHA believes that much less time will be needed
for familiarization and implementation under this rule than was
necessary under the 2012 rule.
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\37\ Larger employers were estimated to have greater
familiarization costs for the 2012 HCS final rule because they have
more managers.
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For the present rule, OSHA in the PEA estimated that management
familiarization time would vary by establishment size and would also
vary depending on whether an establishment would simply be
familiarizing itself with the revised standard or would also need to
take further action because it would be affected by one or more of the
revisions to the standard. Above in Section VI.C, Profile of Affected
Industries, Establishments, and Employees, Table VI-10 presents, by
NAICS industry, the percentage of establishments (and for training,
entities) expected to be affected by rule familiarization and whether
those establishments or entities will incur additional costs or no
additional costs--that is, whether those establishments or entities
will incur additional costs for revising SDSs/labels or for training
employees as a result of the final rule.\38\ In terms of manufacturing
establishments that would have costs in addition to management
familiarization costs, OSHA in the PEA estimated that there are 38,018
small establishments (those with fewer than 20 employees), 11,273
medium establishments (those with 20 to 499 employees), and 394 large
establishments (those with 500 or more employees). In terms of
establishments that would not have costs other than management
familiarization costs, OSHA estimated in the PEA that there are 79,500
small establishments, 22,657 medium establishments, and 467 large
establishments; their only costs associated with this final standard
would be as a result of rule familiarization.\39\
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\38\ Wholesalers in NAICS 424910 and NAICS 424950 are not
expected to incur costs for revising SDSs/labels or for training
employees, but OSHA expects that they will be affected by the
provisions of the proposed rule that are anticipated to result in
cost savings.
\39\ Note that the numbers of small, medium, and large
establishments reported above are derived in the ``Rule Fam'' tab of
the OSHA spreadsheets in support of this proposed rule (see Document
ID 0049).
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To estimate unit costs, OSHA in the PEA first considered
establishments that would incur costs, in addition to rule
familiarization costs, because of the proposed rule. As noted earlier,
for the 2012 FEA OSHA applied a Manager hourly wage to estimate
familiarization costs (Document ID 0005, Section VI, pp. 17612-17613,
17623; Document ID 0029). For the PEA, because the new requirements are
significantly less extensive than those in the 2012 rule, OSHA expected
that the employer will delegate to a Health and Safety Specialist the
responsibility for management familiarization of the new requirements
found within this proposed standard. OSHA invited public comment on the
agency's preliminary assumptions for estimating the cost of management
familiarization. As discussed above in the section on the revised
hazard classification provisions, commenters tended to focus on the
overall effect of the proposed standard on labor efforts required to
update SDS software and labels. For example, in response to a request
for comment on costs for management familiarization in relation to the
proposed rule, Ameren stated that it did not agree with OSHA's
assumptions on the cost of management familiarization but based that
statement on the time required to train all of the employees, which is
a separate cost that OSHA accounts for (Document ID 0309, p. 8).
CISC, however, disagreed with OSHA's preliminary assessment of the
unit time burden for management familiarization and specifically noted
that the estimate of 4 hours, 1 hour, and .25 hours for large, medium,
and small establishments that are not chemical manufacturers
respectively were too low and particularly for small entities who were
unlikely to employ a safety and health specialist and therefore would
need more time for familiarization (Document ID 0335, p. 2).
In estimating costs for establishments that would incur costs in
addition to rule familiarization costs, for small establishments OSHA
preliminarily estimated management familiarization costs of 0.5 hours
of a Health and Safety Specialist's labor time. For medium
establishments, OSHA in the PEA estimated two hours of a Health and
Safety Specialist's labor time. For large establishments, OSHA
estimated eight hours of a Health and Safety Specialist's labor time
for the purpose of estimating costs of management familiarization.
Multiplying these labor burdens by the loaded hourly wage of $58.00
resulted in preliminary management familiarization costs per
establishment of $29.00, $116.01, and $464.04 for small, medium, and
large establishments, respectively.
For this FEA, based on the evidence submitted by commenters
regarding the complexity of some of the updates, as well as the need
for managers to understand the substantive revisions to the Appendices,
OSHA believes that it would be appropriate to double the preliminary
time estimates for management familiarization for employers affected by
other provisions in the revised standard. Therefore, for small
establishments, OSHA in this FEA estimates management familiarization
costs of one hour of a Health and Safety Specialist's labor time. For
medium establishments, OSHA in this FEA estimates four hours of a
Health and Safety Specialist's labor time. For large establishments,
OSHA estimates 16 hours of a Health and Safety Specialist's labor time
for the purpose of estimating costs of management familiarization.
Multiplying these labor burdens by the loaded hourly wage of $61.18
results in final management familiarization costs per establishment of
$61.18, $244.73, and $978.92 for small, medium, and large
establishments, respectively.
For establishments that would not incur other costs as a result of
the proposed rule (below, these employers are termed ``indirectly
affected establishments''), OSHA in the PEA estimated that rule
familiarization will take half as long as the time estimated in the PEA
for establishments that would incur other costs under the proposed
rule. In those cases, management will not need to devote as much time
to considering (or making compliance decisions about) the provisions in
the proposed rule that are expected to result in costs, and they would
primarily need to familiarize themselves with the rule only to the
extent of understanding that they did not fall within the scope of the
changes being made. Therefore, OSHA adopted
[[Page 44223]]
estimates of 0.25 hours, 1 hour, and 4 hours of a Health and Safety
Specialist's labor time for small, medium, and large establishments,
respectively. CISC's comment on the estimate of hours required for
indirectly affected establishments did not provide evidence to support
the argument that OSHA's understanding of these management
familiarization costs was incorrect because they did not provide
information about how many small entities might not employ a Safety and
Health Specialist, what person other than a Health and Safety
Specialist would perform the work, or how long it would take them, nor
did they explain how downstream users would be more directly impacted
by any of the proposed changes, so OSHA has left unchanged the
preliminary per-establishment labor burden estimates for indirectly
affected establishments. Multiplying the labor burdens by the loaded
hourly wage of $61.18 results in management familiarization costs per
establishment of $15.30 for small establishments, $61.18 for medium
establishments, and $244.73 for large establishments.
These management familiarization costs per establishment are
multiplied by the relevant number of small, medium, and large
establishments, resulting in an estimated undiscounted one-time
familiarization cost of $8.0 million. Annualizing this one-time cost
using a seven percent discount rate over a 10-year period results in an
estimate of annualized costs of $1.1 million. Table VI-15 presents the
detailed unit values factoring into OSHA's estimate of management-
related costs. The distribution of these management-familiarization
costs by NAICS code is displayed in Column 3 of Table VI-12.
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BILLING CODE 4510-26-C
VII. Costs Associated With Training Employees
In the PEA, OSHA estimated the incremental costs to train health
and safety personnel who are covered by the HCS and are already trained
in accordance with the 2012 standard but would need to receive
additional training to become familiar with the updates to SDSs and
labels for impacted aerosols, desensitized explosives, and flammable
gases. This analysis is described below.
OSHA preliminarily concluded that these would be the only training
costs associated with the revisions to the HCS. The agency requested
comments on this determination and received comments, from NACD,
indicating that they believed OSHA should include training costs for
retraining workers across all areas (Document ID 0329, p. 11).
As OSHA noted in the PEA, however, OSHA did not estimate any
training costs for users of aerosols, desensitized explosives, or
flammable gases in the workplace because the agency does not believe
that these users would need to dedicate more than a trivial amount of
time to training associated with the reclassification of these
chemicals. This is because the hazards associated with these chemicals
have not changed; the only thing that is changing under the revisions
to the HCS is the way the hazards are classified. For example, users of
pyrophoric gases should already have received training on the fire- and
explosive-related hazards associated with these chemicals, whereas
health and safety personnel who are processing the inputs to the gases
upstream or reviewing revised SDSs and labels for the first time may
[[Page 44224]]
need additional training to learn about the hazards. At most,
downstream users might require notification of a change in the
classification of those chemicals. Similarly, even though
``desensitized explosives'' is a new hazard classification, the
explosion hazards were and are well-known and should have been included
in prior hazard training. For example, should the water or other
wetting solution dry out, an explosion could occur. In this case, even
the hazard pictogram (flames) remains unchanged. For this final
analysis of costs for training, OSHA declines to add costs for
retraining because such additional time would double-count the costs
associated with both (1) the baseline training already assigned costs
in the 2012 FEA and (2) the incremental training estimated in this FEA.
Therefore, OSHA does not agree with NACD that it should take costs for
all the workers who are required to receive training under the HCS.
OSHA also received a comment from NAIMA indicating that ``NAIMA and
its members conduct training, but the cost would not be in more
training, but in the review of the training materials to make certain
that the different changes are captured in the training materials''
(Document ID 0461, p. 3). OSHA notes that, as indicated in Table VI-16
below, the agency has already incorporated the cost for the preparation
of training materials and has used an estimate of 2.5 hours of labor
for a safety and health specialist to develop the materials necessary
for instructing personnel on chemical hazards communicated through the
revised standard.
OSHA considered whether some increase in user training might be
required for some aerosols, since a small portion of these may not
currently be classified as either flammable aerosols or gas under
pressure; as noted in the discussion of Appendix B in Section XIV.,
Summary and Explanation of the Final Rule, such aerosol containers
differ from pressurized gas cylinders in terms of container
characteristics and failure mechanisms. Training for non-flammable
aerosols might include their revised classification and hazard
avoidance measures (such as: keep away from heat, hot surfaces, sparks,
open flames and other ignition sources; no smoking; do not pierce or
burn, even after use). However, based on observation of the industry
over time, OSHA believes that aerosols that are neither flammable nor
fall under gases under pressure are fairly uncommon and, therefore,
OSHA preliminarily concluded that the total user training time required
for non-flammable aerosols not under pressure would also be negligible.
As discussed above, under the final rule, some health and safety
personnel who are covered by, and are already trained in accordance
with, the existing standard will need to receive additional training to
become familiar with the updates to SDSs and labels for impacted
aerosols, desensitized explosives, and flammable gases. OSHA expects
that the incremental training costs for these employees to become
familiar with the revisions to the HCS will be small. In certain cases,
affected employers will be able to integrate the necessary training
into existing training programs and related methods of distributing
safety and health information to employees; those employers would not
incur any meaningful additional costs.
In the PEA, OSHA estimated that each affected chemical
manufacturing firm \40\ would need to devote 2.5 hours of a Health and
Safety Specialist's time to preparing new training under the proposed
rule, and that each affected logistics or production worker would spend
12 minutes receiving the training. Multiplying these unit time
estimates by the respective hourly wage and by the number of affected
firms (2,754), the number of affected logistics managers (1,179), and
the number of affected production workers (76,447) yielded a
preliminary undiscounted one-time cost of $843,940. Annualizing this
one-time cost using a seven percent discount rate over a 10-year period
resulted in estimated annualized costs of $120,158.
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\40\ OSHA anticipates that, in practice, training would be
organized more efficiently at the corporate (firm) level than at the
establishment level.
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OSHA invited interested parties to provide comments on the
preliminary total cost estimates and the assumptions underlying them.
Specifically, the agency requested comments on its preliminary
conclusions regarding training time for users of reclassified
chemicals.
Ameren described the scope of their organization's current GHS
training program and outlined the impact of the proposed training
requirements in OSHA's 2021 NPRM. They estimated that for their
corporation, which has 9,231 employees, the total spent on training
would be approximately $3,000,000 and it would take one year to update
all of their training materials. This estimate was based on an
assumption that they would need to retrain all of their employees,
including on the combustible dust provisions and the labels on small
containers (Document ID 0309, p. 4).
As discussed above, however, OSHA has concluded that the training
times necessary for informing workers will be trivial because they will
not need to be trained on fundamental changes to hazards. The
information Ameren provided only indicated that they thought they
needed to train all of their workers on all of the changes but did not
provide estimates of how much time each worker would need to spend on
receiving such training under their assumptions, and therefore their
comment is difficult to compare with OSHA's assumption that only a
trivial amount of time will be spent on training based on these updates
for users of chemicals. Similarly, NAIMA briefly commented on the
compliance burden imposed by the proposed training requirements,
stating workers would need to be trained on the new hazard class and
hazard categories and that OSHA needed to account for these costs
(Document ID 0338, p. 4). In response, OSHA notes that this FEA
accounts for the incremental compliance burden imposed by the proposed
training requirements and that NAIMA did not elaborate further on the
costs of employee training, nor did the association provide any
quantitative details on the expected cost burden that would allow
comparison with the estimates in the PEA.
Therefore, because stakeholders in this rulemaking provided few if
any details on specific changes in OSHA's preliminary estimate of
incremental training costs necessary to align with employer
expectations of changes to training programs, and because these
expectations are based on an incorrect assumption about the amount of
training required, the agency has no basis in the record to depart from
its preliminary estimate of incremental training costs and believes
that it adequately reflects the real-world change
[…truncated; see source link]Indexed from Federal Register on May 20, 2024.
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