Understaffed and underfunded, the Occupational Safety and Health Administration has posed only a minimal threat to most small businesses. But with a Democratic administration, an activist OSHA chief, and new legislative proposals (see below), OSHA inspectors will likely turn up at more small companies. Although the best defense is a safe workplace, it helps to handle inspections properly. Here's how:

Be prepared. Train an inspection team of two people -- one to answer questions, the other to take notes -- who know all the relevant safety procedures, says Rick Stubbs, a lawyer for Skoler, Abbott & Presser in Springfield, Mass.

Ask questions. Ask the inspectors why they've come. If the process they want to inspect isn't occurring or the person they want to interview isn't available, ask them to return in a day. If you believe OSHA shouldn't be there, you may even request a warrant, says Roger Kaplan, who edits the OSHA Outlook newsletter for Jackson, Lewis, Schniztler & Krupman, a New York City law firm. Meanwhile, you can contact your lawyer for help.

Negotiate. Some inspectors are willing to do so. If, for example, the complaint concerns only one boiler, ask the inspectors to confine their search to that boiler.

Walk around. The inspectors may note anything in plain view, Stubbs says, "so take them to that boiler via the safest path." Duplicate the photos and measurements OSHA takes. Ask the inspectors to label all information "Confidential: Trade Secret."

Discuss interviews with employees. An employee may feel intimidated enough to tell inspectors whatever they want to hear. Reassure workers that both you and OSHA want a safe workplace, that there will be no retaliation for anything they say, that they may refuse to be interviewed, and that they may request a copy of their statement and show it to you.

Follow up. Eventually, the inspectors will review their findings with you. You may want to propose a timetable for corrective actions so that OSHA doesn't rush you. Also, speak only in terms of "alleged violations."

OSHA's Sharp New Teeth
Congress is considering H.R. 1280 and S.R. 575, reform bills to strengthen OSHA that stand a good chance of passing in some form. And the agency is staking claim to workplace issues that could affect more white-collar companies.

The bills might require companies in some cases to correct cited violations while a case is being settled, making appeals pointless; give employees and unions greater power to contest settlements; increase criminal penalties; and require companies with more than 10 employees to establish safety and health committees.

OSHA is also taking a closer look at ergonomics. And this past spring it published proposed guidelines on indoor air quality. A recent memo stated that the agency can now penalize companies for conditions that increase the risk for violence on the job.

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