employees), to ensure that each size group was adequately
represented in the sample.
---------------------------------------------------------------------------

    Comments speculating that employers were attempting to avoid
mentioning that they do not pay for PPE and thus did not respond (Ex.
12: 173, 189) also suggested that the survey was more likely to be
avoided by large employers:

    Knowledgeable employers, especially large employers who employ
the bulk of the workforce, are aware of OSHA's demands that
employers should purchase personal-PE * * *. Accordingly, employers
who do not pay for personal-PE would be less likely to respond to a
survey about payment for personal-PE for fear of adverse action by
OSHA. This fear is the most obvious potential bias to the survey,
yet ERG made no attempt to test it.

    In fact, the survey results showed just the opposite pattern.
Larger employers (strata 2 and 3) generally showed higher rates of
response to the survey than smaller employers (stratum 1) (61.7 percent
and 58 percent for strata 2 and 3, as opposed to 34.7 percent complete
responses for stratum 1) (Ex. 14, Table 13). This stands in stark
contrast with the refusal rate for the survey, which was fairly
constant between 14.6 and 15.5 percent across the three strata. The
lower response rate for stratum 1 employers was entirely due to the
``not available'' segment. Smaller employers are less likely to
maintain a daytime office staff, thus making it more difficult to reach
them to conduct a survey. This may be particularly true for the
construction industry, which accounted for nearly half of the total
called sample; fully one-third of the entire called sample were
construction employers with fewer than 20 employees (Ex. 14, p. 66,
Table 12). In short, the pattern of nonreponse is consistent with a
simple inability to reach people on the phone, not a refusal to
participate for fear of an adverse action from OSHA.
    Second, the response rate is not unusually low for surveys
conducted in the last decade. It is well documented that the public at
large, and probably employers in particular, are suffering from an
element of ``survey fatigue'', given the large number of survey
requests over the phone and on the Internet--people are simply less
likely to agree to do any particular survey, unless there is direct
payoff. In addition, individuals and employers are more likely to
``hide'' behind voice mail and answering machines than they were a few
decades ago (Curtain, et al, 2005). Thus, it would be improper to
assume that the failure to participate represents a response to this
particular survey.
    Third, an analysis of the response rate of small establishments in
the survey suggests that many of the very small establishments OSHA did
not reach simply were not under OSHA jurisdiction by virtue of being
self-employed:

    [t]he average size of not-available establishments, as reported
by D&B, was compared to that of establishments that completed the
survey. For stratum-one respondents, the average D&B-reported
employment size of not-available establishments was 3.9, compared to
5.6 for those who completed the survey. The relatively small size of
the not-available establishments, however, is misleading because
respondents for some of these (especially those for whom D&B
reported a single employee) would have indicated, if they had been
reached, that they were self-employed; their establishments,
therefore, would have been judged out-of-scope. Among successfully
contacted respondents with five or fewer employees (as reported by
D&B), 56.3 percent reported they were self-employed. If the not-
available respondents in stratum one were as likely to be self-
employed as those successfully contacted, the average reported
employment, adjusted for the projected number of screen-outs at each
employment level, would be 5.3. This is very close to the average
employment for stratum-one respondents who completed the survey (Ex.
14, pp. 67-69).

    A potential source of bias not discussed in comments was the
possibility that the nonresponders skewed the sample in favor of
employers who used PPE (as opposed to those employers who paid for
PPE). It may be that a disproportionate percentage of people who either
declined to be interviewed directly, or simply did not return phone
calls did so because they considered the survey inapplicable to their
workplace because they do not use PPE. In that case, the sample ended
up with a disproportionate number of PPE users.
    In any case, the estimated number of PPE-using establishments
approximately doubled between the analysis in the proposed rule and the
analysis here, after incorporating the results of the 1999 survey. In
fact, the estimated costs in this final analysis are higher than they
were for the proposed rule in large part due to significantly greater
reported use of PPE in certain items than indicated in the previous
OSHA telephone survey on PPE in 1989. For example, the proposed rule,
based on the 1989 survey data found 10.6 million employees using
chemical and non-chemically protective gloves (64 FR 15417). The 1999
survey found a combined total approximately 50 percent higher. Much of
this increase may have been related to the effectiveness of the 1994
PPE rulemaking at increasing the use of the PPE. At the same time,
employers may not have bothered to participate in the survey because
they simply did not use PPE, thus skewing upward the numbers of
employers using PPE. OSHA has no specific information that this
occurred;

if it did, however, then the cost to employers (and society) would be
less than estimated in this analysis. The Agency does not believe the
costs are overestimated in this regard, but acknowledges that there are
several different potential, and at least partially offsetting, sources
of bias in the survey results.
    OSHA recognizes that the existence of non-responses is a source of
uncertainty with regard to the costs and benefits of the standard. The
Agency has performed a sensitivity analysis to probe the effects of
underestimating the extent to which employees currently pay for PPE.
    Finally, it should be noted that absent vastly greater resources
and a substantially greater level of intrusion on employers, it would
be impossible, even on a subsample of the survey responders, to verify
whether or not the behavior of non-responders is significantly
different than responders. Given that many employers could not be
reached by phone, it ultimately might be necessary to send someone in
person to interview the non-responders. OSHA is limited in its
resources and would be unable to perform this type of analysis. On
balance, OSHA is confident that the results of this survey represent
the best available evidence on the profile of payment patterns for PPE
in industry.

F. Technological Feasibility

    This rule does not change any PPE requirements, but affects only
the issue of who pays for PPE required by OSHA standards. These PPE
requirements have already been found to be technologically feasible in
other rulemakings. Personal protective equipment is widely
manufactured, distributed, and used in workplaces in all of the
industries covered by OSHA standards. The rule thus raises no issues of
technological feasibility.

G. Benefits of the Final Rule

    OSHA concludes in this final rule that when employers do not
provide and pay for PPE, it is often not worn, is worn improperly, or
is not cared for and replaced appropriately. (See the Legal Authority
section for OSHA's analysis of this issue.) When employees are required
to pay for their own PPE, they are likely to minimize PPE costs and
thus fail to purchase proper personal protective equipment. Further
down the wage scale, these problems can be expected to worsen, and
employees will be less likely to purchase adequate PPE and replace it
when necessary, and are more likely to make cosmetic repairs, hide
defects, or purchase used PPE aged beyond its service life.
    Thus, at least two problems can occur when employers fail to pay
for PPE: Either the PPE is not worn in cases where it is needed to
protect against injury or illness, or the PPE that is worn is
inadequate. The consequences of these failures are the same: Employees
are exposed to chemical, physical, or safety hazards in the workplace,
which, in turn, result in injuries, illnesses, and death.
    In the proposed rule, OSHA estimated the quantitative differences
in the misuse or nonuse of PPE when employers pay for PPE versus when
employees pay for PPE. OSHA preliminarily determined that the rate of
nonuse or misuse of PPE would be approximately 40 percent for employee
purchased PPE verses 15 to 20 percent for employer purchased PPE. This
quantitative estimate was provided by one member of OSHA's expert
panel, but was consistent with the statements of other panelists, as
well as with OSHA's enforcement and regulatory experience. Most panel
members indicated that if the employer did not pay for PPE, the PPE was
typically not fully provided, in some cases falling short by a wide
margin. While commenters disagreed on whether the underlying premise
behind employer payment for PPE was correct, there were no alternative
point estimates provided (other than stating there was no difference
between the two) to the aforementioned estimates. Thus, in this final
rule, OSHA is continuing to use the point estimates given in the
proposal as a basis for the benefits in the final rule. (However, as
explained below, OSHA has also conducted a sensitivity analysis to
evaluate concerns by commenters that OSHA's benefits estimate in the
proposal was too high.)
1. Benefits From Injuries Prevented
    To estimate the benefits of the final rule OSHA calculated the
total number of injuries prevented annually by requiring employers to
pay for PPE by body part. OSHA used the point estimates above and the
steps which are illustrated in Table XV-3.
    OSHA determined the number of injuries judged to be preventable by
multiplying the total number of injuries \23\ by body part (derived
from 2005 lost work day data and shown in column A) \24\ by the
preventability factors OSHA developed in 1994 for the types of PPE
examined (column B) (59 FR 16352).\25\ In the 1994 analysis, most
injuries were not considered preventable by PPE. For example, sprains
and strains (nature) and injuries caused by overexertion
(circumstance), were not considered to be preventable by PPE. On the
whole, approximately one-third of injuries in general industry were
considered preventable with PPE. However, within this group, it was
apparent that PPE could be particularly effective in protecting certain
body parts (e.g., eye injuries were estimated to be 95 percent PPE-
preventable; foot and toe, 75 percent; face and ear, 68 percent; and
hand and finger, 63 percent). These estimates were based on a careful
review of the descriptions of the accidents. Over 90 percent of these
injuries were incurred by production employees in the subset of high-
hazard industries selected for study in the PPE survey. This analysis
did not cover the construction sector. OSHA assumes that the same
preventability factors by body part would apply in construction as in
the general industry and maritime sectors (see column B). The full
analysis of the injuries judged to be preventable through the proper
use of PPE is presented in detail in the Regulatory Impact Assessment
of the 1994 rulemaking (Docket S060, Ex. 56).
---------------------------------------------------------------------------

    \23\ This analysis does not examine the impact of the rule on
occupational illnesses, such as contact dermatitis prevented by
chemically protective PPE, but OSHA is confident the rule will
produce additional benefits not accounted for here.
    \24\ OSHA extrapolated total injuries by body part from the
number of detailed lost workday cases with days away work [BLS,
2006b] by multiplying by the overall ratio of total recordable cases
[BLS, 2006a] to cases with days away from work. Body parts not
included in this analysis: Trunk (e.g., back & shoulder); wrist and
other upper extremities except hand and finger; knee and other lower
extremities except foot and toe; body systems, multiple body parts;
and ``other body parts''. Together these excluded cases account for
about 75% of LWD injuries.
    \25\ To calculate the preventability factors, OSHA reviewed
1,170 OSHA Form 200s describing almost 64,000 injuries. The profile
of injuries, as defined by body part, very closely tracked those in
BLS's injury data base [OSHA 1994, pp. V-11-13]. Information on the
nature of the injury and the circumstances surrounding the accident
was used to determine the extent to which PPE would have prevented
the injury.
---------------------------------------------------------------------------

BILLING CODE 4510-26-P

[GRAPHIC] [TIFF OMITTED] TR15NO07.023

BILLING CODE 4510-26-C
    Column C shows the number of preventable injuries based on the 1994
preventability factors and the 2005 data on total injuries. OSHA then
reduced the numbers shown in column C by the percentage of employees in
State Plan States where employer-payment requirements are already in
place. (These reduction factors are shown in column D.) The resulting
totals of preventable injuries, which includes both employee or
employer paid PPE, are shown in Column E.
    Next OSHA estimated the percentage of PPE-related injuries where
employees paid for their own PPE. OSHA estimates that if employees are
required to pay for their own PPE, this equipment will be lacking or
inadequate 40 percent of the time, while if employers pay for PPE,

the equipment will be lacking or inadequate 17.5 percent of the time.
Using these parameters, OSHA estimates that employees who pay for their
own PPE are 2.3 times (0.4 divided by 0.175) as likely as employees
whose PPE is paid for by their employers to suffer an injury that would
otherwise be preventable by PPE use.
    The number of such preventable injuries, however, depends on the
percentage of employees that currently pay for their own PPE. The
larger this percentage is, the greater of number of injuries are
potentially preventable. Percentages of preventable injuries among
employees paying for their own PPE were estimated by multiplying the
number of employees paying for their own PPE by 0.4 and dividing this
amount by the sum of the product of the number of employees paying for
their own PPE and 0.4 and the product of the number of employees with
employer-paid PPE and 0.175. The numerator of this ratio is the number
of employees required to pay for their own PPE whose equipment will be
lacking or inadequate, while the denominator is the total number of
employees (both employee- and employer-paid PPE users) whose equipment
will be lacking or inadequate. These percentages are shown in column F.
Assuming injuries occur in proportion among employers, applying the
resulting percentages to column E yields the total number of PPE
related injuries where the employee is paying for PPE (shown in column
G).
    Once the number of preventable injuries among the employee-paying
group is derived, it has to be recognized that not all of these will be
preventable by switching payment systems. Requiring employer payment
will reduce the injury rate to the level currently suffered by
employees with employer-paid equipment. As outlined above, employees
paying for their own equipment are 2.3 times (0.4/0.175) as likely to
be injured as those with employer-paid equipment. The total number of
injuries prevented by switching to employer payment equals:
of PPE-related injuries among the employee-paying group multiplied by
[GRAPHIC] [TIFF OMITTED] TR15NO07.015

In terms of the specific numbers, this percentage reduction is
calculated as 1-((0.175/0.4) , or 1-0.4375, or 56.3 percent, as shown
in column H. Reducing the number of injuries in the employee-paying
group (column G) by 56.3 percent results in the total number of
injuries prevented by this rulemaking, as shown in column I.
    As indicated in Table XV-3, this analysis indicates that the final
rule would avert approximately 21,798 injuries annually.\26\ OSHA
provides a sensitivity analysis of this below, to reflect uncertainties
in the strength of the employer payment effect.
---------------------------------------------------------------------------

    \26\ Within the 17,025 injuries estimated to be prevented in
general industry and maritime, the Agency estimates 214 will be in
maritime, the remainder in general industry.
---------------------------------------------------------------------------

    While a number of commenters had concerns about the rule, there was
general agreement on the value of PPE in preventing injuries (see,
e.g., Exs. 12: 2, 4, 6, 9, 10, 11, 13, 15, 20, 21, 32, 58, 66, 79, 100,
101, 105, 110, 113, 117, 130, 134, 149, 184, 190, 210, 218, 230, 233,
247, 248). One commenter questioned the underlying basis for OSHA's
estimates in part because their experience has been that relatively few
injuries are actually preventable by PPE.

[w]e have approximately 50 accidents per year. I read every one of
them. I would say in a given year there may be at most one or two
accidents where the personal protective equipment was a factor in
preventing or minimizing the injury. Remember, that is the barrier.
That is the last resort is the personal protective equipment. As we
all know, there should be other steps taken to prevent an injury
before it gets to that point (Tr. 146).

    OSHA disagrees with this commenter to the extent the commenter is
suggesting that employer payment for PPE will not help prevent
injuries. First, this represents one company's experience, which is not
generalizable to the economy as a whole. OSHA's analysis of injuries
allows for the fact that many injuries would not be preventable by PPE;
this company may have an unusually large number of such cases. The
commenter suggests, correctly, that engineering controls are the
logical first line of defense against hazards. The company may have an
excellent program in this regard. Second, the comment refers to cases
where PPE is being worn and prevented accidents; it says nothing about
any cases where PPE was not being worn and injuries resulted. A finding
that suggests that PPE prevents only a few injuries is dramatically at
odds with most of the rulemaking record both in this rulemaking and its
predecessor in 1994. In both cases PPE was found to be of considerable
value in reducing injuries.
    Finally, it is worth noting the Agency is not claiming a dramatic
percentage reduction in total injuries as a result of the rule, in part
because most equipment is already paid for by most employers. A
reduction of 1 or 2 cases out of 50 represents a relatively small
number within one business unit, but extrapolated across the economy as
a whole represents a large number of injuries prevented, resulting in a
substantial net benefit for the nation as a whole.
2. Benefits From Prevented Fatalities
    Although the primary benefits from this rule derive from the non-
fatal injuries and associated costs that will be averted by requiring
employers to assume the full costs of the covered types of PPE, some
benefits are associated with the preventability of fatal injuries.
Although most injuries preventable by appropriate PPE would not
otherwise result in fatalities, certain fatal head injuries,
particularly those classified as ``struck by'' or ``struck against''
injuries, would be prevented by PPE (i.e., hardhats). Recent data on
occupational fatalities collected by the Bureau of Labor Statistics
show that a yearly average of 112 such fatalities occurred in general
industry and maritime, and 43 in construction during the period 2003
through 2005 (BLS, CFOI, 2004).
    OSHA estimated the number of fatalities likely to be prevented by
the rule by first considering the percentage of ``struck by'' and
``struck against'' fatalities that would be prevented if proper head
PPE had been used. Many types (or ``events'') of fatal head injuries
that would not be prevented by hardhats, such as those resulting from
falls, some explosions, and most transportation-related accidents, have
not been included in this analysis. In contrast, PPE should be
relatively effective in preventing fatal ``struck by'' and ``struck
against'' head injuries. Additional fatalities that would not be
prevented include crushing accidents (force exceeds the protection of
the head gear) and instances where the hazard could not be anticipated
and the victim

could not reasonably be judged to be at risk and required to use PPE
(passersby, for example.) For this analysis, OSHA estimates that 75
percent of fatal ``struck by'' and ``struck against'' injuries would
otherwise be prevented by proper use of head protection.
    Applying the 75 percent estimate described above to the total
number of annual fatalities from the BLS data (112 in general industry
and maritime, and 43 in construction) results in an estimated 84
fatalities in general industry and maritime and 32 fatalities in
construction that would be preventable by wearing hardhats if all the
fatalities occurred in industries within OSHA jurisdiction. However,
approximately 59.1 percent of these preventable fatalities are
estimated to occur in non State-Plan States.27 28
Accordingly, the actual number of fatalities preventable by this rule
is approximately 50 in general industry and maritime, and 19 in
construction. In addition, only a subset of these preventable
fatalities would be affected by switching payment systems, i.e. the
subset where employees are currently paying for their own PPE. This is
because the number of preventable fatalities affected by this rule
depends on the percentage of employees that currently pay for their own
PPE. The larger this percentage is, the greater the number of
fatalities that are potentially preventable.
---------------------------------------------------------------------------

    \27-28\ As indicated in Table XV-3, Census Bureau [Census,
2005a] data indicate non State-Plan States account for 59.1% of
private sector employment.
---------------------------------------------------------------------------

    Data from OSHA's PPE payment survey suggest that about 1.2 percent
of general industry and maritime employees and 4.1 percent of
construction employees pay for their own head PPE. Combining these
percentages with the point estimates for PPE nonuse/misuse discussed
above (40 percent nonuse/misuse when employees pay for PPE versus 17.5
percent nonuse/misuse when employers pay for PPE), OSHA calculated the
ratio of employee paid-PPE-related fatalities to all PPE related
fatalities (i.e., the sum of the employee- and employer-paid PPE
fatalities).
[GRAPHIC] [TIFF OMITTED] TR15NO07.016

Using the same methodology used for non-fatal injuries, the ratio for
general industry is equal to (0.40*0.012)/(0.40*0.012 + 0.175*0.988) =
2.8 percent. For construction the ratio is equal to (0.40*0.041)/
(0.40*0.041 + 0.175*0.959) = 8.9 percent.
    In short, OSHA estimates that employees paying for their own PPE
suffer 2.8 percent (1.4 fatalities annually) of the fatal ``struck by''
and ``stuck against'' head injuries in general industry and 8.9 percent
(1.7 fatalities annually) of the fatal ``struck by'' and ``stuck
against'' head injuries in construction. However, it is not the case
that all of the employee-paying preventable fatalities (1.4 and 1.7 in
general industry and construction respectively) will be prevented by
switching payment systems because there is still a 17.5 percent nonuse/
misuse rate among the employer-paying group. OSHA's estimate that
requiring employer payment will reduce the rate of misuse or nonuse of
PPE from 40 to 17.5 percent implies a resultant 56.3 percent reduction
((0.4-0.175)/0.40) in fatal head injuries among employees who pay for
their own PPE. Thus OSHA estimates that 0.8 fatal head injuries (0.563
times 1.4) in general industry and 0.9 fatal head injuries (0.563 times
1.7) in construction will be prevented annually by this rule.
    The Agency also believes that the final rule will achieve
substantial benefits in the area of fall protection, particularly in
construction. The rule will prevent a number of fatalities and severe
injuries that are now occurring either because employee-provided PPE
offers inadequate protection or because the employee arrives on site
without the necessary PPE. For example, OSHA estimated in the
Regulatory Impact Analysis for 29 CFR Part 1926 Subpart M that fall
protection systems would prevent nearly 80 fatalities and 26,600 lost
workday-injuries annually. To the extent that employers supply more
effective harnesses and lanyards than those currently being provided by
employees, or ensure that this equipment is available for use by the
employee, this rule will prevent deaths and injuries caused by falls.
However, at the current time, the Agency does not have sufficient
detail on these accidents to quantify the benefits of this effect.
3. Uncertainties
    As outlined elsewhere in this analysis, benefits associated with
the rule are subject to uncertainty with respect to the number and
types of accidents that will be avoided or mitigated by the use of PPE
and cost and benefits estimates are further subject to uncertainty due
to the survey's non-response levels. Further, this analysis assumes
that the effect of the rule will be limited to situations where
employees are now required to pay for their own PPE. This, however,
while a simplifying assumption, may not be wholly accurate. As
indicated in the Legal Authority section, there is evidence that
employer payment for PPE is important to send a signal to employees on
the importance of wearing PPE. The record is also clear that certain
sectors, such as construction, have relatively high rates of employee
turnover (BLS, 2004), and even where they are not so high, they do not
remain static. If the rule has the effect of engendering a greater
appreciation of the importance of wearing PPE, then this effect would
logically extend into workplaces where employers pay for the equipment
currently, through employee turnover as well as a general shift in
norms of behavior in the industry. The analysis currently assumes that
employees will fail to wear PPE 15-20 percent of the time even when the
employer pays for PPE. Given that employers pay for most PPE items most
of the time currently (typically greater than 95 percent of the time),
if this percentage were to fall even a small amount as a result of this
rulemaking, the benefits would be substantially greater than assumed in
this analysis.
4. Willingness To Pay for Injuries and Fatalities Avoided
    OSHA also performed an analysis of the value of injuries and
fatalities avoided based on a willingness to pay approach. This
approach employs the theory of compensating differentials in the labor
market. A number of academic studies have drawn a correlation between
higher risk on the job and higher wages, suggesting that employees
demand monetary compensation in return for a greater risk of injury or
fatality. OSHA has used this approach

in many recent proposed and final rules (See, e.g., 71 FR 10099, 70 FR
34822).
    In performing its willingness to pay analysis, OSHA uses an
estimate of $50,000 per lost workday-injury avoided, based on two
studies: Viscusi, 1993, and Viscusi & Aldy, 2003. In his 1993 paper
(Viscusi, 1993, p. 1935), Viscusi reviewed the available literature and
found the value of lost workday injuries to be: ``[i]n the area of
$50,000, or at the high end of the range of estimates for the implicit
value of injuries overall.'' His 2003 paper with Aldy broadly
reaffirmed this, finding the literature to estimate the value in the
$20,000-$70,000 range. While the literature covered many types of
injuries, they focused primarily, particularly for many of the higher
valuations, on lost workday injuries. The Agency has conservatively
chosen to apply this value to only cases resulting in days away from
work, even though there would be additional value attached to the
larger class of injuries, especially cases resulting in restricted
work. As shown in Table XV-4, the Agency estimates the value of
injuries prevented using this approach to be $337 million per year.
    By this methodology, a single fatality avoided is valued at $7
million [Viscusi 2003, p. 63]. As explained above, OSHA estimates that
1.7 fatalities may be prevented each year by this rule. Accordingly,
this brings total the total monetized value of benefits to $349
million.
    An alternate approach for valuing injuries is the direct cost
approach, which OSHA used in the analysis for the proposal. A full
discussion of this estimate is provided in an Appendix at the end of
the Final Economic Analysis. Using a direct cost approach to monetize
benefits for injuries avoided, and a willingness to pay approach to
monetize fatalities avoided, OSHA estimates total benefits to be $228.3
million (See Table XV-14).
BILLING CODE 4510-26-P

[GRAPHIC] [TIFF OMITTED] TR15NO07.024

BILLING CODE 4510-26-C

    H. Costs of Compliance to Employers
    OSHA also used the survey results to estimate the costs to
employers of compliance with the final rule. Based on the survey, OSHA
estimated, by PPE type, the percentage of PPE users in non-State Plan
States whose employers bear the full PPE costs and the percentage of
PPE users in non-State Plan States whose employers pay some share of
the PPE costs. The remaining employees are those who now pay for their
own PPE. Under the final rule, employers will have to assume the PPE
costs for these employees and, in addition, make up the share of PPE
costs currently borne by employees who pay some portion of the
equipment expense.
    OSHA also determined unit cost estimates for PPE, based in part on
assumptions used in the Preliminary Economic Analysis for the proposed
rule (64 FR 15425), updated according to current price data obtained
from safety equipment vendors. The unit costs represent annualized
equipment costs, based on the prices and the estimated lifetimes of the
PPE items, and are as follows:
     Based on prices from a current safety equipment catalog,
hardhats costing $8.20, non-prescription safety glasses costing $6.20,
and face shields costing $14.90 are all assumed to a have a useful life
of one year.
     Chemical splash goggles costing $6.20 and safety goggles
costing $4.65 are assumed to be replaced every six months with
annualized costs of $13.05 and $9.79, respectively.
     Gloves for abrasion protection costing $8.30 are assumed
to be replaced four times a year resulting in an annualized cost of
$34.64 (Lab Safety, 2007).
     Welding helmets were assumed to have a life expectancy of
2 years and to cost $40.00; welding goggles were assumed to have a life
expectancy of 1 year and to cost $13.62 (these assumptions yield a
combined annualized welding unit cost of $36.69). According to OSHA's
expert panel, welders need both helmets and goggles at different times
of the year.
     Fall protection (body harness or belt, and lanyard) is
assumed to have a life expectancy of 2 years, and to cost $93.90
(harnesses), $45.70 (belt), and $51.10 (lanyards), respectively,
yielding a combined annualized fall protection unit cost of $80.20.
     Reusable chemical protective clothing is assumed to be
replaced every 6 months and to cost $41.30, while chemical protective
gloves costing $3.50 are assumed to be replaced every 10 working days
(20 times a year), based on prices in the safety equipment catalog (Lab
Safety, 2007).
     Paragraph (h)(3) of the revised rule requires employers to
pay only for the cost of metatarsal guards, as opposed to the entire
footwear item. The annualized cost of external metatarsal guards,
assuming replacement every 2 years, is $15.49, based on a unit cost of
$28 (Lab Safety Supply, 2007, Omark Safety Online, 2007, Working
Person's Store, 2007, Grainger, 2007, Alpenco, 2007).
    To derive the incremental cost to employers of compliance with the
final rule, for each type of PPE, OSHA (a) multiplied the unit PPE cost
by the number of employees in non-State Plan States who now pay for
their equipment and (b) added to this, the unit PPE cost multiplied by
1 minus the percentage share of cost now paid by employers who share
costs, multiplied by the number of employees in non-State Plan States
who now pay some portion of the cost of their PPE.
    Costs were adjusted for additional PPE expenditures resulting from
employee turnover, based on turnover estimates prepared by the Bureau
of Labor Statistics from their Job Openings and Labor Turnover Survey
(JOLTS) (BLS, 2004). Two factors determine the impact of turnover on
compliance costs. First, if the protective equipment is transferable to
other employees and can be reused, turnover does not affect compliance
costs. In this case, departing employees' equipment can be passed on to
new employees. Second, for non-transferable PPE, the lifetime of the
equipment determines the number of additional purchases required for
new employees.\29\ For example, turnover has less impact for PPE types
with short lifetimes, because such equipment is regularly replaced even
in the absence of employee turnover. To account for this, OSHA used a
factor that was equal to the PPE lifetime (in fractions of a year) for
PPE types with lifetimes less than one year and equal to 1 for PPE with
lifetimes of one year or greater. For example, suppose that the
turnover rate is 10 percent and the lifetime of the equipment is six
months (0.5 years). If the hiring of new employees is spread out evenly
over the year, half the new employees can be provided with equipment
that would have been replaced even without employee turnover. In this
case, the additional PPE required as a result of turnover would be 5
percent (10 percent times 0.5).
---------------------------------------------------------------------------

    \29\ This analysis assumes the following items are transferable:
chemical splash goggles, faceshields, hardhats, metatarsal
protection, splash aprons, chemical protective clothing, body
harnesses, body belts, lanyards, welding helmets, welding goggles
and ear muffs. Non-prescription safety glasses, safety goggles,
chemical protective footwear, gloves for abrasive and chemical
protection, protective welding clothing and ear inserts were assumed
to be non-transferable.
---------------------------------------------------------------------------

    Table XV-5 presents compliance costs of the final rule to
employers, by NAICS code. Table XV-6 summarizes the cost estimates by
general category of PPE. Total compliance costs are estimated to be
$85.7 million for all establishments. The cost of gloves for abrasion
protection is estimated to be $27.8 million, or 32.5 percent of total
costs. Chemical protective footwear is estimated to be $17.6 million,
or 20.5 percent of total costs. Metatarsal guards for footwear are
estimated to be $13.3 million, and gloves for chemical protection $10.2
million, at 15.5 percent and 11.8 percent of total costs respectively.
    Several commenters stated that the cost analysis was unrealistic in
assessing the costs in their industries. Representatives from the
drilling industry (Ex. 12: 91) stated that the analysis failed to take
into consideration the high rate of cotton glove usage in their
industry, as they reported employees going through approximately one
pair a day. OSHA questions whether the gloves described by the
commenter constitute PPE; it is not clear for what safety or health
purpose the gloves are being worn. If the gloves are being used for the
purposes of abrasion protection, more durable and protective
alternatives are available than cotton gloves. Regulatory analyses
generally assume employers adopt the least-cost option, which may
differ from the pattern of employee purchases; this applies to both the
quantity (e.g., bulk discounts) and quality of PPE purchased. This
analysis assumes employers will use leather or Kevlar gloves for
protection, a costlier (per unit), but more durable form of protection.

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BILLING CODE 4510-16-C
    In a separate but related issue, this same commenter indicated
that, from talking with their members, they thought OSHA's survey had
underestimated the share of PPE which employees were paying for. OSHA
recognizes that such results are inevitable in relying upon a sample.
There will be instances where certain costs are underestimated.
Likewise, there will be situations where costs are overestimated. These
will tend to offset each other so that there is no systemic bias. For
example, based heavily on one survey response, the analysis suggests
that employers in wholesale trade are expected to have particularly
heavy costs for certain PPE items, notably fall protection. However, in
OSHA's professional judgment, uses of these PPE items in this sector
are not as high as the survey would suggest. Nonetheless, it would be
inconsistent and potentially in error to project a final estimate of
costs to the economy without taking into account the full pattern of
behavior indicated by the survey.
    There may be instances where this analysis either fails to consider
certain specialized PPE or PPE use patterns in particular industries
that are more expensive than calculated. Alternately,

there will be instances where the analysis has overestimated the cost
of PPE for various industries. However, as indicated later in this
analysis, given the very limited costs of PPE as a percentage of
revenue and profits, its comparatively ``level'' distribution as a per
employee cost (i.e., costs as function of the size of employment), as
well as the established patterns of employee payment currently for most
types of PPE in most industries, cost estimates for particular
industries would generally need to be off by well over an order of
magnitude before these would begin to raise issues of economic
feasibility.
    It should also be noted that since this analysis is accepting the
survey results at face value, there has been no attempt to correct for
situations where OSHA already requires payment for PPE, e.g., the
bloodborne pathogens standard and numerous single substance standards.
To the extent that employers are not adhering to existing requirements
in this regard, these costs are overstated in this rulemaking.
    Finally, this analysis makes no attempt to estimate to what extent
employees will continue to voluntarily bring their own PPE into the
workplace. Rather, this analysis assumes employers will pay 100 percent
of the cost of the PPE covered by this rulemaking currently paid for by
employees. To the extent employees choose to bring their own PPE into
the workplace after the rule is issued, costs will be overstated.

I. Economic Feasibility and RFA Certification

    A standard is economically feasible if it does not threaten massive
dislocation to or imperil the existence of an industry. See United
Steelworkers of America, 647 F.2d at 1265. That a standard is
financially burdensome or threatens the survival of some companies in
an industry is not sufficient to render it infeasible (Id. at 1265).
The cost of compliance with an OSHA standard must be analyzed ``in
relation to the financial health and profitability of the industry and
the likely effect of such costs on unit consumer prices.'' (Id.) [The]
practical question is whether the standard threatens the competitive
stability of an industry, or whether any intra-industry or inter-
industry discrimination in the standard might wreck such stability or
lead to undue concentration (Id.) (citing Industrial Union Dept., AFL-
CIO v. Hodgson, 499 F.2d 467 (DC Cir. 1974)). The courts have further
observed that granting companies reasonable time to comply may enhance
economic feasibility (Id.).
    To assess the potential economic impacts of the final rule, OSHA
compared the anticipated costs of achieving compliance against revenues
and profits of PPE-using establishments in non-State Plan states. Per-
establishment average costs were calculated by dividing total
compliance costs for each industry by the number of affected
establishments. OSHA then compared baseline financial data (from the
U.S. Internal Revenue Service, Corporation Source Book, 2004) with
total annualized costs of compliance to compute compliance costs as a
percentage of revenues and profits. This impact assessment is presented
in Table XV-7.
    This table is considered a screening analysis because it measures
costs as a percentage of pre-tax profits and sales but does not predict
impacts on pre-tax profits and sales. This screening analysis is used
to determine whether the compliance costs potentially associated with
the standard would lead to significant impacts on establishments in the
affected industries. The actual impact of the standard on the profits
and revenues of establishments in a given industry will depend on the
price elasticity of demand for the services sold by establishments in
that industry.
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BILLING CODE 4510-26-C

    Price elasticity refers to the relationship between the price
charged for a service and the demand for that service; that is, the
more elastic the relationship, the less able an establishment is to
pass the costs of compliance through to its customers in the form of a
price increase and the more it will have to absorb the costs of
compliance from its profits. When demand is inelastic, establishments
can recover all the costs of compliance simply by raising the prices
they charge for that service; under this scenario, profits are
untouched. On the other hand, when demand is elastic, establishments
cannot recover all the costs simply by passing the cost increase
through in the form of a price increase; instead, they must absorb some
of the increase from their profits. In general, ``when an industry is
subject to a higher cost, it does not simply swallow it, it raises its
price and reduces its output, and in this way shifts a part of the cost
to its consumers and a part to its suppliers,'' (ADA v. Secretary of
Labor, 984 F.2d 823, 829 (7th Cir. 1993)).
    Specifically, if demand is completely inelastic (i.e., price
elasticity is 0), then the impact of compliance costs that amount to 1
percent of revenues would be a 1 percent increase in the price of the
product or service, with no decline in demand or in profits. Such a
situation would be most likely when there are few, if any, substitutes
for the product or service offered by the affected sector or if the
products or services of the affected sector account only for a small
portion of the income of its consumers. If the demand is perfectly
elastic (i.e., the price elasticity is infinitely large), then no
increase in price is possible, and before-tax profits would be reduced
by an amount equal to the costs of compliance (minus any savings
resulting from improved employee health and reduced insurance costs).
Under this scenario, if the costs of compliance represent a large
percentage of the sector's profits, some establishments might be forced
to close. This scenario is highly unlikely to occur, however, because
it can only arise when there are other goods and services that are, in
the eye of the consumer, perfect substitutes for the goods and services
the affected establishments produce or provide.
    A common intermediate case would be a price elasticity of one. In
this situation, if the costs of compliance amount to 1 percent of
revenues, then production would decline by 1 percent and prices would
rise by 1 percent. The sector would remain in business and maintain
approximately the same profit rate as before but would produce 1
percent less of its services. Consumers would effectively absorb the
costs through a combination of increased prices and reduced
consumption; this, as the court described in ADA v. Secretary of Labor,
is the more typical case.
    As indicated in Table XV-7, the screening analysis indicates the
highest revenue and profit impacts are for NAICS 48832, Marine Cargo
Handling (0.017 percent of sales and 0.56 percent of profits); NAICS
336611, Ship Building and Repairing (0.013 percent of sales and 0.24
percent of profits); NAICS 238, Specialty Trade Contractors (0.008
percent of sales and .21 percent of profits); and NAICS 485, Transit
and Ground Passenger Transportation (0.006 percent of sales and 0.3
percent of profits). Over the entire set of affected industries, the
average impact on sales is 0.001 percent and the average impact on
profits is 0.03 percent.
    Costs of this magnitude do not threaten the financial health of
even the most marginal firm. Since most employers in most industries
already pay for PPE, the major competitive effect of the rule is to
limit any small short-term competitive advantage a few firms gain by
not paying for PPE, i.e., by requiring their employees to pay for PPE
that other employers in their industry pay for. As shown elsewhere,
many firms already pay for PPE because it proves cost-effective. Many
firms will find that, when benefits as well as costs are considered,
the costs of PPE are more than offset by these benefits.
    It should be noted that these impacts could be nine times higher
without reaching the level of 5 percent of profits or 1 percent of
revenues in any industry. Thus, in spite of uncertainties about costs,
this rule does not come close to a level threatening the economic
viability of any affected industry. For all the aforementioned reasons,
the Agency concludes the final rule is economically feasible.
    OSHA also assessed the economic impact of the rule on small firms
within each affected industry. Impacts on two size categories of small
firms were estimated: Firms with fewer than 500 employees, and firms
with fewer than 20 employees. In using 500 employees and 20 employees
to characterize firms for this screening analysis for impacts, OSHA is
not proposing definitions of small business that are different from
those established by the Small Business Administration (SBA) in its
``Table of Size Standards''. The SBA size definitions are NAICS-code
specific, and are generally expressed either in terms of number of
employees or as annual receipts. Instead, OSHA is using 500 employees
and 20 employees as a simple method of screening for significant
impacts across the large number of industries potentially affected by
the rule. Because the survey used the 500- and 20-employee levels, it
is appropriate to retain these levels in the final rule. This approach
also avoids the interpolation that would be necessary because the
underlying industry profile data do not correspond with the NAICS-
specific size categories established by the SBA. (OSHA notes that, for
almost all of the industries affected by this rulemaking, the SBA size
definitions fall within the 20- to 500-employee range.) OSHA believes
that this screening approach will capture any significant impacts on
small firms in affected industries.
    As a conservative approach, in order to analyze the impact on firms
with fewer than 500 employees, OSHA divided the total annual cost in
each NAICS for establishments with fewer than 500 employees by the
total number of firms with fewer than 500 employees in that NAICS. This
approach tends to overstate the impact because some of the costs will
be for establishments with fewer than 500 employees that are part of
firms with more than 500 employees. These calculated costs per firm
with fewer than 500 employees were then compared to average sales per
firm with fewer than 500 employees and average pre-tax profits per firm
with fewer than 500 employees. The same methodology was used to analyze
the impact on firms with fewer than 20 employees.
    The results of these analyses are shown in Tables XV-8 and XV-9,
which demonstrate that the annualized costs of compliance do not exceed
0.035 percent of sales or 0.65 percent of profits for small firms in
any industry, whether defined as fewer than 500 employees or as fewer
than 20 employees. It should be noted that these impacts could be 8
times higher without reaching the level of 5 percent of profits or 1
percent of revenues that OSHA uses to determine if a Regulatory
Flexibility Act (5 U.S.C. 605) Analysis (RFA) is necessary. Thus, in
spite of uncertainties about costs, it is very unlikely that this rule
would even rise to the level of needing more detailed analysis beyond
this screening analysis. Based on these analyses, in accordance with
the Regulatory Flexibility Act (5 U.S.C. 605), OSHA certifies that the
rule will not have a significant impact on a substantial number of
small entities.

    Because for most industries statistically meaningful survey data
are available largely only at the three-digit North American Industrial
Classification System level, OSHA has conducted this analysis of
economic impacts primarily at the 3-digit level. OSHA believes that
this level of analysis adequately captures meaningful variations in
economic impacts. Further, the costs are so low that even if a sub-
industry has substantially higher costs as a percentage of sales or
profits, the financial health of that sub-industry would not be in any
danger.
BILLING CODE 4510-26-P

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BILLING CODE 4510-26-C

J. Social Costs and Social Benefits

    For the most part, the rule will simply shift the cost of
purchasing PPE from employees to employers. However, the record
demonstrates that employer payment will also result in more PPE used
and improved PPE use at the workplace. This will lead to social costs
and social benefits. For purposes of estimating the social costs, OSHA
assumed, based largely on expert opinion as discussed above in the
benefits analysis, that employees lack the proper PPE an average of
17.5 percent of the time when employers pay, and 40 percent of the time
when employees pay. The social cost represents the cost of closing the
gap between the two numbers; the remainder of the employers' cost is
merely an economic transfer from the employee to employer. Thus, the
social costs of requiring employer payment would represent the
following portion of the total cost to employers: 1-((1-0.4)/(1-
0.175)), where (1-0.4)/(1-0.175) represents the relative likelihood
that employees are actually wearing the proper PPE. If the relative
likelihood were 1 (the numerator and denominator equal), there would be
no social cost. Calculated out, this becomes 1-(0.6/0.825), 1-0.727, or
27.3 percent. As indicated in Table XV-10 this suggests that about
$23.4 million out of the total $85.7 million estimated costs to
employers are social costs.
    In the case of comparing social costs and social benefits, the
magnitude of social costs and benefits are closely linked--the benefits
of reducing the injuries are dependent upon the purchase and use of
PPE. To assess the benefits of the final rule, OSHA estimated that PPE
is misused or not used at all 40 percent of the time when employees pay
and 17.5 percent of the time when employers pay. There is necessarily
uncertainty in these estimates. Accordingly, OSHA has performed an
analysis of the social costs and social benefits of the rule given
different sets of assumptions, commonly referred to as a sensitivity
analysis, in this case with respect to different rates of PPE misuse/
nonuse. The Agency found that if the difference in PPE usage patterns
between the employee- and employer-pay groups is much smaller than
OSHA's assumption, the social benefits are still several times larger
than the social costs.
    If one assumed the gap between the two groups were only half of
what was assumed in the benefits estimate based on direct cost (i.e.,
assume employees paying for their own PPE were lacking the proper PPE
28.75 percent of the time, and employees who had the PPE paid for by
their employer were lacking it 17.5 percent of the time, meaning a
difference of 11.25 percent, as opposed to 22.5 percent in main
estimate), OSHA estimates total social costs of $11.7 million and total
social benefits of $125.3 million, for a net benefit of $113.6 million.
If the ``employer payment effect'' were only 10 percent of the main
benefits estimate (i.e., assume employees paying for their own PPE were
lacking the proper PPE 19.75 percent of the time, and employees who had
the PPE paid for by their employer were lacking it 17.5 percent of the
time), the social costs would be only $2.3 million; the remainder of
the cost to employers would simply be a transfer. The estimated
benefits would be $27.6 million, for a net benefit of $25.3
million.\30\
---------------------------------------------------------------------------

    \30\ Total social benefits include fatalities prevented, which
are valued at $7 million per fatality avoided, using the willingness
to pay approach [Viscusi, 2003, p. 763].
---------------------------------------------------------------------------

    OSHA performed an analysis of these alternate assumptions
incorporating the estimated value of willingness to pay for injuries
avoided, estimated at approximately $50,000 per lost workday injury
(Viscusi 1993, Viscusi & Aldy 2003). As shown in Table XV-11, OSHA
estimates the net social benefits of the rule to be $334 million using
the main benefits estimate, and $185 and $39 million using the
alternate 50 percent and 10 percent assumptions on the ``employer
payment effect''.
    The Agency also examined the effect of doubling the estimated share
of PPE employees currently pay for to examine the consequences of the
survey underestimating the employees' share of payment. Both the costs
of the standard to employers and the social costs would double--the
estimated social costs would increase to $47 million. The estimated
annual benefits of the standard would increase to 37,188 injuries and
3.4 fatalities prevented, producing an estimated social value of $609
million, and raising the net social benefit to $562 million. Therefore,
the Agency concludes that if the survey did underestimate the current
employee-paying share, the net benefits of the standard would be larger
than OSHA's primary estimate.
    As discussed previously, these sensitivity analyses of the net
social benefits are intended to explore the implications of the
uncertainties outlined previously in this analysis. Nonetheless, under
any scenario, the rule will produce a high ratio of benefits to costs
and positive net benefits; the primary uncertainty is the magnitude of
the social costs and benefits.
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BILLING CODE 4510-26-C

K. Direct Savings Resulting From the Reduction in Injuries Attributable
to the Final Rule

    This section evaluates the direct savings associated with the
injuries prevented by the final rule. It should be noted that
occupational injuries impose an enormous burden on society in addition
to the direct outlays of money for medical expenses, lost wages and
production, and other purely economic effects. This section of the
analysis does not attempt to place a monetary value on the pain and
suffering experienced by employees and their families, loss of esteem,
disruption of family life, feelings of anger and helplessness and other
effects. However, many of these considerations go into the monetary
calculation of the social benefits of injury reduction used in the
social costs and benefits above (see Section J). In

addition, there are some purely economic costs that have not been
captured in this analysis, such as legal costs to employees and lost
output at home.
    Some aspects of the burden of occupational injuries can be
quantified in monetary terms. These aspects of the problem of work-
related injuries and illnesses can be measured by the losses
experienced by employees and by the other costs that are externalized
to the rest of society. One consequence of the failure of PPE programs
to prevent job-related injuries is the growth of enormously expensive
income maintenance programs such as workers' compensation and long-term
disability programs. These costs impose a burden on society separate
from and in addition to the human toll in pain and suffering caused by
workplace-related injuries.
    One measure of some of the losses associated with lost time due to
work-related injuries is the lost output of the employee, measured by
the value the market places on his or her time. This value is measured
as the employee's total wage plus fringe benefits. Other costs include:
(1) Medical expenses, (2) costs of workers' compensation insurance
administration, and (3) indirect costs to employers (other than those
for workers' compensation administration).
a. Lost Output
    OSHA estimates the value of lost output by starting with workers'
compensation indemnity payments and then adding other losses associated
with work-related injuries. The Agency follows four steps to arrive at
a value for lost output:
    (1) Calculate PPE-related injury in terms of workers' compensation
indemnity payments;
    (2) Add the difference between the value of these indemnity
payments and the employee's after-tax income, based on various studies
comparing workers' compensation payments with after-tax income. This
step estimates the magnitude of lost after-tax income;
    (3) Add the estimated value of taxes, based on the typical value of
taxes as a percentage of after-tax income. This step estimates the
value of total income lost; and
    (4) Add the value of fringe benefits, based on data on fringe
benefits as a percentage of total income. This step estimates the total
market value of the lost output.
    In this approach, injuries are clearly undervalued, because OSHA
assumes that the value associated with injuries is the same as the
value of claims for workers' compensation. An analysis of 1993 workers'
compensation claim data from the Argonaut Insurance Company, updated to
reflect current dollars using a ratio of claims value to total
injuries, shows that the weighted average claim value of the injuries
shown in Table XV-3 is $3,833. Based on nationwide estimates from the
U.S. Social Security Administration, an average of 53 percent of these
payments are paid out for indemnity, and the remaining 47 percent are
paid out for medical costs (NASI, 2006).
b. Indemnity/Lost Income
    Workers' compensation indemnity payments typically take two forms:
temporary total disability payments, which cover absences from work
prior to the stabilization of the condition, and permanent disability
payments, which compensate the employee for the long-term effects of a
stabilized condition. On a nationwide basis, the National Academy of
Social Insurance (NASI) estimates that permanent disability payments
account for 79 percent of all indemnity payments. Considering all
payments, those cases classified as permanent partial disability
account for 67 percent of the total, while those classified as
permanent total disability account for 12 percent of the total. The
remaining indemnity payments are for temporary total disability cases
and account for 21 percent of the total (NASI, 2006).
    The extent to which income is replaced by each type of indemnity
payment (i.e., temporary or permanent) differs. First, although rules
vary by State, temporary disability income is designed in most States
to replace two-thirds of the employee's before-tax income. However,
most States place a maximum and minimum on the amount of money paid out
to the employee, regardless of his/her actual former income. Studies by
the Worker Compensation Research Institute (WCRI) show that temporary
total disability payments replace between 80 to 100 percent of the
after-tax income of the majority of employees (WCRI, 1993). From 3 to
44 percent of the employees receive less than 80 percent of their
after-tax income, and from 0 to 16 percent receive more than 100
percent of their after-tax income. Unfortunately, WCRI does not provide
estimates of average replacement rates as they vary significantly by
State for a number of reasons, including policy differences, injury
rates, employee demographics, and wage and price variations (NASI,
2006). However, based on these data, it seems reasonable to assume
that, on average, employees receive no more than 90 percent of their
after-tax income while on temporary disability.
    On the other hand, data show that permanent partial disability
payments replaced 75 percent of income lost in Wisconsin, 58 percent in
Florida, and 45 percent in California [Berkowitz and Burton]. OSHA uses
the simple average of these three--59 percent--to estimate the extent
of after-tax income replacement for permanent partial disabilities.\31\
---------------------------------------------------------------------------

    \31\ The use of a simple average rather than a population-
weighted average results in a lower estimate of income loss and is
thus a more conservative approach.
---------------------------------------------------------------------------

    Based on these data and the NASI estimates of the distribution of
payments by type, OSHA estimated after-tax income from the total
indemnities paid for injuries preventable by the proposed rule by
assuming payments for temporary disabilities account for 21 percent of
all PPE-preventable indemnity payments and replace 90 percent of after-
tax income and that payments for permanent disabilities account for 79
percent of PPE-preventable indemnity payments and replace approximately
60 percent of after-tax income.
c. Fringe Benefits
    In addition to after-tax income loss, lost output includes the
value of taxes that would have been paid by the injured employee and
fringe benefits that would have been paid by the employee's employer.
Total income-based taxes (individual Social Security payments, Federal
income tax, and State income tax) paid were assumed to be 30 percent of
total income.\32\ Fringe benefits were estimated as 40.4 percent of
before-tax income, based on the average fringe benefit data provided by
BLS (BLS, 2005).
---------------------------------------------------------------------------

    \32\ A CBO (CBO, 2004) study estimated the current effective
Federal tax rate, averaged over all income levels, at 21.6% (Table
2, p. 18). To this Social Security taxes and state and local income
taxes must be added, so that the number 30% should be a conservative
estimate in most cases.
---------------------------------------------------------------------------

    Tables XV-12 and XV-13 apply the estimation parameters developed
above to calculate the total value of the lost output associated with
temporary and permanent disabilities, respectively. As shown, the total
value of the lost output associated with potentially avoidable approved
workers' compensation claims for temporary total disability is
estimated at $17.3 million, and that associated with permanent
disabilities (partial and total) at $93.9 million a

year. By preventing injuries that lead to disability, the PPE payment
rule will also prevent this lost output.
BILLING CODE 4510-26-C
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BILLING CODE 4510-26-C
d. Medical
    Most elements of medical costs are included in the share of
payments paid for medical costs, estimated to be 47 percent of the cost
of the claims. However, medical costs do not include any first-aid
costs incurred by the employer and, in some cases, costs for
transportation to a medical facility. It should be noted that costs for
treating injuries will remain relatively constant, regardless of who is
actually paying for the medical care (i.e., the employer through
workers' compensation, or a medical insurer). As presented in Table XV-
14, OSHA estimates the medical costs of injuries preventable by the
proposed standard to be $39.2 million a year.
e. Administrative Costs
    The administrative costs of workers' compensation insurance include
any funds spent directly on claims adjustment, as well as all other
administrative costs incurred by the insurer in conjunction with
experienced losses.
    OSHA calculates the administrative costs of PPE-related injury
claims based on the estimates of benefits and costs to employers for
workers' compensation as provided by the National Academy of Social
Insurance (NASI, 2006). Table XV-15 presents administrative costs as a
percent of the value of claims, by type of insurer. Administrative
costs for private carriers, State funds, and self-insured companies are
estimated to be 71.8 percent, 73.5 percent, and 16.2 percent,
respectively. To estimate the aggregate value of the administrative
costs of insurance, these costs were weighted by the value of the
benefit payments made by each type of insurer. The aggregate value of
the administrative costs of workers' compensation insurance is
estimated to be 58.1 percent of the value of claims. The total value of
claims includes both the indemnity and medical portions of insurance
company payments. As indicated in Table XV-14, the Agency estimates
that the revisions to the PPE standard will save $48.5 million annually
in administrative costs.
    It should be noted that cases that fall outside the workers'
compensation system will typically have administrative costs associated
with them--indeed, to the extent they are borne by private medical
insurers, they will carry relatively greater administrative expenses
than the average estimated here.

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    Table XV-15.--Derivation of Average Administrative Costs as a Percent of the Value of Claims, by Type of
                                                    Insurance
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                                                Ratio of
       Type of insurance             Total cost          Benefits        Administrative    administrative costs
                                                                              cost              to benefits
----------------------------------------------------------------------------------------------------------------
Private........................            $48,695            $28,346            $20,349  71.8 percent.
State..........................            $19,157            $11,044             $8,113  73.5 percent.
Self-Insured...................            $15,478            $13,321             $2,157  16.2 percent.
All Insurance..................            $83,330            $52,711            $30,619  58.1 percent.
----------------------------------------------------------------------------------------------------------------
Source: National Academy of Social Insurance, Workers Compensation: Benefits, Coverage, and Costs, 2004
  (Washington, DC, 2006).

f. Indirect Costs
    The term ``indirect costs'' describes the costs of work-related
injuries that are borne directly by employers but are not included in
workers' compensation claim costs. Such costs are best estimated by
looking at the costs an employer actually incurs at the time a workers'
compensation claim is filed. These costs include a number of different
social costs, not included elsewhere in these calculations, such as
loss of productivity measured by sick leave to employees for absences
that are shorter than the workers' compensation waiting period, losses
in production associated with the injured workers' departure and return
to work, losses in the productivity of other employees, and a wide
variety of administrative costs other than those borne directly by the
workers' compensation insurer, e.g., medical management costs for the
injured employee. Based on a study (Hinze & Applegate) of indirect
costs of injuries in the construction industry, OSHA estimates that
indirect costs are 20.8 percent of the value of workers' compensation
medical and indemnity payments. As indicated in Table XV-14, the Agency
estimates that the PPE payment rule will save $17.4 million annually in
these indirect costs.
    Taken in its entirety, this final rule is estimated to save $216
million annually by avoiding preventable injuries. See Table XV-14.
These cost savings do not include the economic value of the loss of
leisure time. They do not account for

the burden of chores that are forced on other household members or
hired out. The direct savings also do not include the value of
preventing pain and suffering or loss of life.

L. References

    Alpenso, 2007. http://www.alpenco.com. Accessed May 8, 2007 (Docket

OSHA-S042-2006-0667).
    American Association of Railroads, 2006. North American Freight
Railroad Statistics. November 6 (Docket OSHA-S042-2006-0667).
    Berkowitz, M., and Burton, J. Permanent Partial Disability
Benefits In Worker Compensation. W. E. Upjohn Institute for
Employment Research, Kalamazoo, Michigan, 1987 (Docket S777, Ex.
1605).
    Bureau of Labor Statistics. ``Employer Costs for Employee
Compensation Summary,'' News Release, December 9, 2005.
    Bureau of Labor Statistics, 2004. Job Openings and Labor
Turnover Survey, 2004.
    Bureau of Labor Statistics. ``Workplace Injuries and Illnesses
in 2005,'' News Release, October 19, 2006.
    Bureau of Labor Statistics. ``Nonfatal Occupational Injuries and
Illnesses Requiring Days Away From Work, 2005,'' News Release,
November 17, 2006.
    Bureau of National Affairs. Basic Patterns in Union Contracts,
Fourteenth Edition, BNA Books, 1995 (Docket OSHA-S042-2006-0667).
    Curtin, R., Presser, S., and Singer, E., ``Changes in Telephone
Survey Nonresponse Over the Past Quarter Century'', Public Opinion
Quarterly, Vol. 69, No. 1, Spring 2005, pp. 87-98 (Docket OSHA-S042-
2006-0667).
    Congressional Budget Office, Effective Tax Rates Under Current
Law, 2001-2004, 2004.
    Eastern Research Group, Patterns of PPE Provision. 1998 (Ex. 1).
    Eastern Research Group, PPE Cost Survey, 1999 (Ex. 14).
    Eastern Research Group, Revised Estimates of PPE Use and Payment
Patterns, 2007 Business Roundtable. Improving Construction Safety
Performance: A Construction Industry Cost Effectiveness Project.
Report A-3, January, 1982 (Docket OSHA-S042-2006-0667).
    Grainger, 2007. http://www.grainger.com, Accessed May 8, 2007 Business

Roundtable. Improving Construction Safety Performance: A
Construction Industry Cost Effectiveness Project. Report A-3,
January, 1982 (Docket OSHA-S042-2006-0667).
    Hinze, J. and Applegate, L.L. ``Costs of Construction
Injuries'', Journal of Construction Engineering and Management,
117(3):537-550, 1991 (Docket S777, Ex. 26-1589).
    Klein, R.W., Nordman, E.C., and Fritz, J.L. Market Conditions in
Workers' Compensation Insurance. Interim Report Presented to the
NAIC Workers' Compensation Task Force, July 9, 1993 (Docket S777,
Ex. 26-1586).
    Lab Safety Supply, http://www.labsafety.com. Accessed May 1,

2007 Business Roundtable. Improving Construction Safety Performance:
A Construction Industry Cost Effectiveness Project. Report A-3,
January, 1982 (Docket OSHA-S042-2006-0667).
    National Academy of Social Insurance, Workers Compensation:
Benefits Coverage, and Costs, 2004 (Washington, DC, 2006) Business
Roundtable. Improving Construction Safety Performance: A
Construction Industry Cost Effectiveness Project. Report A-3,
January, 1982 (Docket OSHA-S042-2006-0667).
    Occupational Safety and Health Administration, Office of
Regulatory Analysis, Background Document to the Regulatory Impact
and Regulatory Flexibility Assessment for the PPE Standard, 1994,
(Docket S060, Ex. 56).
    Office of Technology Assessment, Preventing Illness and Injury
in the Workplace, Volume 2-Part B: Working Papers, 1994 (Docket
H049, Ex. 189).
    Omark Safety Online, 2007. http://www.omarksafety.com. Accessed May 8,

2007 Business Roundtable. Improving Construction Safety Performance:
A Construction Industry Cost Effectiveness Project. Report A-3,
January, 1982 (Docket OSHA-S042-2006-0667).
    Ryscavage, Paul. ``Dynamics of Economic Well-Being: Labor Force,
1991 to 1993'', U.S. Census Bureau, Current Population Reports,
Household Economic Studies, P70-48, August 1995.
    U.S. Census Bureau, 2004. State and Local Employment and
Payroll, March 2004.
    U.S. Census Bureau, 2005a. County Business Patterns, 2004.
    U.S. Census Bureau, 2005b. Statistics of U.S. Businesses 2004.
    U.S. Internal Revenue Service, Corporation Source Book, 2004.
Accessed online at http://www.irs.gov/taxstats/bustaxstats/article/0
,,id=149687,00.html, March 2007.

    U.S. Postal Service. 2006. Annual Report, 2006.
    U.S. Small Business Administration, 2004. Table of Small
Business Size Standards Matched to the North American Industry
Classification System, Effective July 31, 2004. Accessed on-line at
< http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf
>, March, 2007.

    U.S. Social Security Administration. Annual Statistical
Supplement to the Social Security Bulletin. Washington, DC, 2006.
    Viscusi, K., ``The Value of Risks to Life and Health'', Journal
of Economic Literature, Vol. 31, No. 4. (Dec., 1993), pp. 1912-1946
(Docket OSHA-S042-2006-0667).
    Viscusi, K. and Aldy, J. ``The Value of a Statistical Life: A
Critical Review of Market Estimates Throughout the World'', The
Journal of Risk and Uncertainty, 2003, 27:1:5-76, 2003 (Docket OSHA-
S042-2006-0667).
    Worker Compensation Research Institute. Income Replacement in
California. December, 1993 (Docket S777, Ex. 26-1586).
    Working Person's Store, 2007. http://www.workingperson.com, Accessed

May 8, 2007 (Docket OSHA-S042-2006-0667).

XVI. Environmental Impacts

    OSHA has reviewed this rule in accordance with the National
Environmental Policy Act (NEPA), (42 U.S.C. 4321 et seq.), the
regulations of the Council on Environmental Quality (40 CFR Part 1500),
and DOL's NEPA procedures (29 CFR Part II). As a result of this review,
OSHA has determined that this action will have no significant impact on
the external environment.

XVII. Federalism

    OSHA has reviewed this final rule in accordance with the Executive
Order on Federalism (Executive Order 13132, 64 FR 43255, August 10,
1999), which requires that federal agencies, to the extent possible,
refrain from limiting State policy options, consult with States prior
to taking any actions that would restrict State policy options, and
take such actions only when there is clear constitutional authority and
the presence of a problem of national scope. Executive Order 13132
provides for preemption of state law only if there is a clear
congressional intent for the Agency to do so. Any such preemption is to
be limited to the extent possible.
    Section 18 of the OSH Act (29 U.S.C. 651 et seq.) expresses
Congress' intent to preempt state laws where OSHA has promulgated
occupational safety and health standards. Under the OSH Act, a state
can avoid preemption on issues covered by federal standards only if it
submits, and obtains federal approval of, a plan for the development of
such standards and their enforcement (state plan state) (29 U.S.C.
667). Occupational safety and health standards developed by such state
plan states must, among other things, be at least as effective in
providing safe and healthful employment and places of employment as the
federal standards. Subject to these requirements, state plan states are
free to develop and enforce under state law their own requirements for
safety and health standards.
    This final rule complies with Executive Order 13132. As Congress
has expressed a clear intent for OSHA standards to preempt state job
safety and health rules in areas addressed by OSHA standards in states
without OSHA-approved state plans, this rule limits state policy
options in the same manner as all OSHA standards. In states with OSHA-
approved state plans, this action does not significantly limit state
policy options.

XVIII. Unfunded Mandates

    This final rule has been reviewed in accordance with the Unfunded
Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1501 et seq.) and
Executive Order 12875. As discussed in the Final Economic Analysis,
OSHA estimates that compliance with the rule will require expenditures
of $85.7 million per year by affected employers.

Therefore, this rule is not a significant regulatory action within the
meaning of Section 202 of UMRA (Pub. L. 104-4, 2 U.S.C. 1532). OSHA
standards do not apply to State and local governments except in States
that have voluntarily elected to adopt an OSHA State plan.
Consequently, the rule does not meet the definition of a ``Federal
intergovernmental mandate'' (Section 421(5) of UMRA) (2 U.S.C. 658).
    In addition, the Agency has concluded that virtually all State Plan
States, the only States in which this rule could have any effect on
State and local government employers, already require that employers
pay for all types of PPE that will be covered by this rule. Thus, this
rule will not have a significant impact on employers who are State and
local governments. In sum, this rule does not impose unfunded mandates
within the meaning of UMRA.

XIX. OMB Review Under the Paperwork Reduction Act of 1995

    The final PPE payment rule simply clarifies that employers must pay
for PPE used to comply with OSHA standards, with a few limited
exceptions. As such, the rule does not contain collection-of-
information (paperwork) requirements that are subject to review by the
Office of Management and Budget (OMB) under the Paperwork Reduction Act
of 1995 (PRA-95), 44 U.S.C. 3501 et seq., and OMB's regulations at 5
CFR part 1320. PRA-95 defines ``collection of information'' as ``[t]he
obtaining, causing to be obtained, soliciting, or requiring the
disclosure to third parties or the public of facts or opinions by or
for an agency regardless of form or format * * *.'' (44 U.S.C.
3502(3)(A)).
    A number of commenters questioned whether they would be required to
keep receipts to prove PPE purchases and, thus, whether the final rule
contains paperwork requirements (See, e.g., Exs. 12: 22, 31, 36, 44,
54, 56, 68, 72, 73, 78, 80, 95, 102, 115, 118, 127, 128, 136, 140, 157,
158, 165, 166, 176, 186, 194, 197, 202, 208, 212, 219, 224, 226, 232,
238, 241). In a representative comment, the NAHB asked:

    How will OSHA enforce this standard? When a compliance officer
comes on to the jobsite and sees every employee wearing a hard hat
and safety glasses, will he request to see a receipt from the
employer for the purchase of the PPE? Will the employer then be
cited if he does not have a receipt to prove that he did, in fact,
pay for the PPE being used? (Ex. 12: 212).

    The final standard does not require employers to maintain receipts
or any other form of paperwork involving PPE payment, and OSHA will not
cite an employer for failure to have such paperwork. The Agency
understands that businesses commonly keep receipts to comply with
standard accounting codes, for tax accounting purposes, and as a
standard good business practice. However, an employer is not required
to do so by this final rule.
    In response to the comment from NAHB, in most instances, an OSHA
inspector will interview employers and employees to determine if an
employer is complying with the PPE payment rule. OSHA does not believe
it will be difficult to ascertain whether an employer paid for a
particular piece of PPE and employers will not need to justify their
purchases with receipts. After publishing the final rule, OSHA will
instruct its inspectors in the requirements of the final rule and that
the final rule does not require employers to keep a record of receipts
or otherwise document determinations made.

XX. State Plan Standards

    When federal OSHA promulgates a new standard or more stringent
amendment to an existing standard, the 26 states or U.S. territories
with their own OSHA-approved occupational safety and health plans must
revise their standards to reflect the new standard or amendment, or
show OSHA why there is no need for action, e.g., because an existing
state standard covering this area is already ``at least as effective''
as the new federal standard or amendment (29 CFR 1953.5(a)). The state
standard must be at least as effective as the final federal rule, must
be applicable to both the private and public (state and local
government employees) sectors, and must be completed within six months
of the publication date of the final federal rule. When OSHA
promulgates a new standard or amendment that does not impose additional
or more stringent requirements than an existing standard, states are
not required to revise their standards, although the Agency may
encourage them to do so. These 26 states and territories are: Alaska,
Arizona, California, Connecticut (plan covers only State and local
government employees), Hawaii, Indiana, Iowa, Kentucky, Maryland,
Michigan, Minnesota, Nevada, New Mexico, New Jersey (plan covers only
State and local government employees), New York (plan covers only State
and local government employees), North Carolina, Oregon, Puerto Rico,
South Carolina, Tennessee, Utah, Vermont, Virginia, Virgin Islands
(plan covers only Territorial and local government employees),
Washington, and Wyoming.
    While this final rule does not change the types of PPE that are
required, it imposes additional or more stringent PPE payment
requirements on employers than existing OSHA standards. Therefore, the
states will be required to revise their standards within six months of
this Federal Register notice or show OSHA why their existing standard
is already ``at least as effective'' as the new federal standard.
Thirteen states require payment for most PPE through regulation or
policy. In addition, three states (California, Minnesota, and Puerto
Rico) currently require payment for all PPE. (In these states, the
employer may be required to pay for the minimal PPE needed to do the
job, but can require the employee to pay for equipment upgraded at the
employee's request.)
    OSHA received very few comments concerning implementation of the
final rule in the state plan states. The State of Minnesota noted that
it has required PPE payment by employers since 1973, without any
exceptions, under Minnesota Statute Sec.  182, subd. 10(a). Minnesota
advocated federal adoption of the State's policy of requiring the
employer to pay at least the minimum cost of all PPE needed for the
job, including items of a personal nature that can be used off the job,
e.g., safety-toe footwear and prescription safety eyewear, without
exception. The State expressed concern that employers in Minnesota
would be confused if OSHA adopted a requirement different from the
State's (Ex. 12: 20). It is the employer's responsibility to know and
comply with the applicable occupational safety and health requirements,
whether they are federal or OSHA-approved state plan requirements.
States that choose to operate state programs are free to adopt more
stringent standards but in doing so have a responsibility to
communicate those requirements to employers in their state. A state
plan state may always adopt standards identical to the federal if they
wish to avoid such differences.
    While each state plan is ultimately responsible for communicating
its state-specific standards and policies to the employers and
employees within the state, federal OSHA will continue to work with the
state plans to make information about state-specific policies and
regulations that differ from the federal, including PPE payment
requirements, publicly available to employers and employees through Web
postings and other outreach activities.

XXI. Authority and Signature

    This document was prepared under the direction of Edwin G. Foulke,
Jr.,

Assistant Secretary of Labor for Occupational Safety and Health, 200
Constitution Avenue, NW., Washington, DC 20210. This action is taken
pursuant to sections 4, 6, and 8 of the Occupational Safety and Health
Act of 1970 (29 U.S.C. 653, 655, 657), the Longshore and Harbor
Workers' Compensation Act (33 U.S.C. 941), the Contract Work Hours and
Safety Standards Act (Construction Safety Act) (40 U.S.C. 333), and
Secretary of Labor's Order No. 5-2007 (72 FR 31160), and 29 CFR part
1911.

List of Subjects

29 CFR Part 1910

    Chemicals, Electric power, Fire prevention, Gases, Hazardous
substances, Health facilities, Health professions, Laboratories,
Logging, Occupational safety and health, Protective equipment,
Radiation protection.

29 CFR Part 1915

    Chemicals, Electric power, Fire prevention, Gases, Hazardous
substances, Health facilities, Health professions, Laboratories,
Longshore and harbor workers, Occupational safety and health,
Protective equipment, Radiation protection.

29 CFR Part 1917

    Chemicals, Electric power, Fire prevention, Gases, Hazardous
substances, Health facilities, Health professions, Laboratories,
Longshore and harbor workers, Occupational safety and health,
Protective equipment, Radiation protection.

29 CFR Part 1918

    Chemicals, Electric power, Fire prevention, Gases, Hazardous
substances, Health facilities, Health professions, Laboratories,
Longshore and harbor workers, Occupational safety and health,
Protective equipment, Radiation protection.

29 CFR Part 1926

    Chemicals, Construction industry, Electric power, Fire prevention,
Gases, Hazardous substances, Health facilities, Health professions,
Laboratories, Occupational safety and health, Protective equipment,
Radiation protection.

    Signed at Washington, DC this 2nd day of November, 2007.
Edwin G. Foulke, Jr.,
Assistant Secretary of Labor for Occupational Safety and Health.

0
Accordingly, the Occupational Safety and Health Administration amends
parts 1910, 1915, 1917, 1918, and 1926 of Title 29 of the Code of
Federal Regulations as follows:

XXII. Final Rule

General Industry

PART 1910--[AMENDED]

0
1. The authority citation for subpart I of 29 CFR part 1910 is revised
to read as follows:

    Authority: Sections 4, 6, and 8 of the Occupational Safety and
Health Act of 1970 (29 U.S.C. 653, 655, and 657); Secretary of
Labor's Order No. 12-71 (36 FR 8754), 8-76 (41 FR 25059), 9-83 (48
FR 35736), 1-90 (55 FR 9033), 6-96 (62 FR 111), 3-2000 (65 FR
50017), 5-2002 (67 FR 65008), or 5-2007 (72 FR 31160), as
applicable, and 29 CFR Part 1911.

0
2. A new paragraph (h) is added to Sec.  1910.132, to read as follows:

Sec.  1910.132  General requirements.

* * * * *
    (h) Payment for protective equipment.
    (1) Except as provided by paragraphs (h)(2) through (h)(6) of this
section, the protective equipment, including personal protective
equipment (PPE), used to comply with this part, shall be provided by
the employer at no cost to employees.
    (2) The employer is not required to pay for non-specialty safety-
toe protective footwear (including steel-toe shoes or steel-toe boots)
and non-specialty prescription safety eyewear, provided that the
employer permits such items to be worn off the job-site.
    (3) When the employer provides metatarsal guards and allows the
employee, at his or her request, to use shoes or boots with built-in
metatarsal protection, the employer is not required to reimburse the
employee for the shoes or boots.
    (4) The employer is not required to pay for:
    (i) The logging boots required by 29 CFR 1910.266(d)(1)(v);
    (ii) Everyday clothing, such as long-sleeve shirts, long pants,
street shoes, and normal work boots; or
    (iii) Ordinary clothing, skin creams, or other items, used solely
for protection from weather, such as winter coats, jackets, gloves,
parkas, rubber boots, hats, raincoats, ordinary sunglasses, and
sunscreen.
    (5) The employer must pay for replacement PPE, except when the
employee has lost or intentionally damaged the PPE.
    (6) Where an employee provides adequate protective equipment he or
she owns pursuant to paragraph (b) of this section, the employer may
allow the employee to use it and is not required to reimburse the
employee for that equipment. The employer shall not require an employee
to provide or pay for his or her own PPE, unless the PPE is excepted by
paragraphs (h)(2) through (h)(5) of this section.
    (7) This paragraph (h) shall become effective on February 13, 2008.
Employers must implement the PPE payment requirements no later than May
15, 2008.

    Note to Sec.  1910.132(h): When the provisions of another OSHA
standard specify whether or not the employer must pay for specific
equipment, the payment provisions of that standard shall prevail.

PART 1915--[AMENDED]

0
1. The authority citation for 29 CFR part 1915 is revised to read as
follows:

    Authority: Section 41, Longshore and Harbor Workers'
Compensation Act (33 U.S.C. 941); Sections. 4, 6, and 8 of the
Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655,
657); Secretary of Labor's Order No. 12-71 (36 FR 8754), 8-76 (41 FR
25059), 9-83 (48 FR 35736), 1-90 (55 FR 9033), 6-96 (62 FR 111), 3-
2000 (65 FR 50017), 5-2002 (67 FR 65008), or 5-2007 (72 FR 31160) as
applicable; 29 CFR Part 1911.

0
2. A new paragraph (f) is added to Sec.  1915.152, to read as follows:

Sec.  1915.152  General requirements.

* * * * *
    (f) Payment for protective equipment. (1) Except as provided by
paragraphs (f)(2) through (f)(6) of this section, the protective
equipment, including personal protective equipment (PPE), used to
comply with this part, shall be provided by the employer at no cost to
employees.
    (2) The employer is not required to pay for non-specialty safety-
toe protective footwear (including steel-toe shoes or steel-toe boots)
and non-specialty prescription safety eyewear, provided that the
employer permits such items to be worn off the job-site.
    (3) When the employer provides metatarsal guards and allows the
employee, at his or her request, to use shoes or boots with built-in
metatarsal protection, the employer is not required to reimburse the
employee for the shoes or boots.
    (4) The employer is not required to pay for:
    (i) Everyday clothing, such as long-sleeve shirts, long pants,
street shoes, and normal work boots; or
    (ii) Ordinary clothing, skin creams, or other items, used solely
for protection from weather, such as winter coats, jackets, gloves,
parkas, rubber boots, hats, raincoats, ordinary sunglasses, and
sunscreen.
    (5) The employer must pay for replacement PPE, except when the

employee has lost or intentionally damaged the PPE.
    (6) Where an employee provides appropriate protective equipment he
or she owns, the employer may allow the employee to use it and is not
required to reimburse the employee for that equipment. The employer
shall not require an employee to provide or pay for his or her own PPE,
unless the PPE is excepted by paragraphs (f)(2) through (f)(5) of this
section.
    (7) This paragraph (f) shall become effective on February 13, 2008.
Employers must implement the PPE payment requirements no later than May
15, 2008.

    Note to Sec.  1915.152(f): When the provisions of another OSHA
standard specify whether or not the employer must pay for specific
equipment, the payment provisions of that standard shall prevail.

Longshoring

PART 1917--[AMENDED]

0
1. The authority citation for 29 CFR part 1917 is revised to read as
follows:

    Authority: Section 41, Longshore and Harbor Workers'
Compensation Act (33 U.S.C. 941); Sections 4, 6, and 8 of the
Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655,
657); Secretary of Labor's Order No. 12-71 (36 FR 8754), 8-76 (41 FR
25059), 9-83 (48 FR 35736), 1-90 (55 FR 9033), 6-96 (62 FR 111), 3-
2000 (65 FR 50017), 5-2002 (67 FR 65008), or 5-2007 (72 FR 31160) as
applicable; 29 CFR Part 1911.

0
2. A new Sec.  1917.96 is added, to read as follows:

Sec.  1917.96  Payment for protective equipment.

    (a) Except as provided by paragraphs (b) through (f) of this
section, the protective equipment, including personal protective
equipment (PPE), used to comply with this part, shall be provided by
the employer at no cost to employees.
    (b) The employer is not required to pay for non-specialty safety-
toe protective footwear (including steel-toe shoes or steel-toe boots)
and non-specialty prescription safety eyewear, provided that the
employer permits such items to be worn off the job-site.
    (c) When the employer provides metatarsal guards and allows the
employee, at his or her request, to use shoes or boots with built-in
metatarsal protection, the employer is not required to reimburse the
employee for the shoes or boots.
    (d) The employer is not required to pay for:
    (1) Everyday clothing, such as long-sleeve shirts, long pants,
street shoes, and normal work boots; or
    (2) Ordinary clothing, skin creams, or other items, used solely for
protection from weather, such as winter coats, jackets, gloves, parkas,
rubber boots, hats, raincoats, ordinary sunglasses, and sunscreen.
    (e) The employer must pay for replacement PPE, except when the
employee has lost or intentionally damaged the PPE.
    (f) Where an employee provides adequate protective equipment he or
she owns, the employer may allow the employee to use it and is not
required to reimburse the employee for that equipment. The employer
shall not require an employee to provide or pay for his or her own PPE,
unless the PPE is excepted by paragraphs (b) through (e) of this
section.
    (g) This section shall become effective on February 13, 2008.
Employers must implement the PPE payment requirements no later than May
15, 2008.

    Note to Sec.  1917.96: When the provisions of another OSHA
standard specify whether or not the employer must pay for specific
equipment, the payment provisions of that standard shall prevail.

Marine Terminals

PART 1918--[AMENDED]

0
1. The authority citation for 29 CFR part 1918 is revised to read as
follows:

    Authority: Section 41, Longshore and Harbor Workers'
Compensation Act (33 U.S.C. 941); Sections. 4, 6, and 8 of the
Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655,
657); Secretary of Labor's Order No. 12-71 (36 FR 8754), 8-76 (41 FR
25059), 9-83 (48 FR 35736), 1-90 (55 FR 9033), 6-96 (62 FR 111), 3-
2000 (65 FR 50017), 5-2002 (67 FR 65008), or 5-2007 (72 FR 31160) as
applicable; 29 CFR Part 1911.

0
2. A new Sec.  1918.106 is added, to read as follows:

Sec.  1918.106  Payment for protective equipment.

    (a) Except as provided by paragraphs (b) through (f) of this
section, the protective equipment, including personal protective
equipment (PPE), used to comply with this part, shall be provided by
the employer at no cost to employees.
    (b) The employer is not required to pay for non-specialty safety-
toe protective footwear (including steel-toe shoes or steel-toe boots)
and non-specialty prescription safety eyewear, provided that the
employer permits such items to be worn off the job-site.
    (c) When the employer provides metatarsal guards and allows the
employee, at his or her request, to use shoes or boots with built-in
metatarsal protection, the employer is not required to reimburse the
employee for the shoes or boots.
    (d) The employer is not required to pay for:
    (1) Everyday clothing, such as long-sleeve shirts, long pants,
street shoes, and normal work boots; or
    (2) Ordinary clothing, skin creams, or other items, used solely for
protection from weather, such as winter coats, jackets, gloves, parkas,
rubber boots, hats, raincoats, ordinary sunglasses, and sunscreen.
    (e) The employer must pay for replacement PPE, except when the
employee has lost or intentionally damaged the PPE.
    (f) Where an employee provides adequate protective equipment he or
she owns, the employer may allow the employee to use it and is not
required to reimburse the employee for that equipment. The employer
shall not require an employee to provide or pay for his or her own PPE,
unless the PPE is excepted by paragraphs (b) through (e).
    (g) This section shall become effective on February 13, 2008.
Employers must implement the PPE payment requirements no later than May
15, 2008.

    Note to Sec.  1918.106: When the provisions of another OSHA
standard specify whether or not the employer must pay for specific
equipment, the payment provisions of that standard shall prevail.

Construction

PART 1926--[AMENDED]

0
1. The authority citation for subpart E of 29 CFR part 1926 is revised
to read as follows:

    Authority: Section. 107, Contract Work Hours and Safety
Standards Act (Construction Safety Act) (40 U.S.C. 333); Sections.
4, 6, and 8 of the Occupational Safety and Health Act of 1970 (29
U.S.C. 653, 655, 657); Secretary of Labor's Order No. 12-71 (36 FR
8754), 8-76 (41 FR 25059), 9-83 (48 FR 35736), 1-90 (55 FR 9033), 6-
96 (62 FR 111), 5-2002 (67 FR 65008), or 5-2007 (72 FR 31160) as
applicable; and 29 CFR Part 1911.

0
2. A new paragraph (d) is added to Sec.  1926.95, to read as follows:

Sec.  1926.95  Criteria for personal protective equipment.

* * * * *
    (d) Payment for protective equipment. (1) Except as provided by
paragraphs (d)(2) through (d)(6) of this section, the protective
equipment, including personal protective equipment (PPE), used to
comply with this part, shall be

provided by the employer at no cost to employees.
    (2) The employer is not required to pay for non-specialty safety-
toe protective footwear (including steel-toe shoes or steel-toe boots)
and non-specialty prescription safety eyewear, provided that the
employer permits such items to be worn off the job-site.
    (3) When the employer provides metatarsal guards and allows the
employee, at his or her request, to use shoes or boots with built-in
metatarsal protection, the employer is not required to reimburse the
employee for the shoes or boots.
    (4) The employer is not required to pay for:
    (i) Everyday clothing, such as long-sleeve shirts, long pants,
street shoes, and normal work boots; or
    (ii) Ordinary clothing, skin creams, or other items, used solely
for protection from weather, such as winter coats, jackets, gloves,
parkas, rubber boots, hats, raincoats, ordinary sunglasses, and
sunscreen.
    (5) The employer must pay for replacement PPE, except when the
employee has lost or intentionally damaged the PPE.
    (6) Where an employee provides adequate protective equipment he or
she owns pursuant to paragraph (b) of this section, the employer may
allow the employee to use it and is not required to reimburse the
employee for that equipment. The employer shall not require an employee
to provide or pay for his or her own PPE, unless the PPE is excepted by
paragraphs (d)(2) through (d)(5) of this section.
    (7) This section shall become effective on February 13, 2008.
Employers must implement the PPE payment requirements no later than May
15, 2008.

    Note to Sec.  1926.95(d): When the provisions of another OSHA
standard specify whether or not the employer must pay for specific
equipment, the payment provisions of that standard shall prevail.

[FR Doc. 07-5608 Filed 11-14-07; 8:45 am]

BILLING CODE 4510-26-P