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11.16.2015 Legal News

Previously-Exempt Retailers Now Subject to PSM Standard

To help prevent or minimize unexpected releases of highly hazardous chemicals, OSHA requires employers to implement its process safety management (PSM) standard.  Under the PSM standard, employers gather information, analyze and evaluate hazards, and develop operating procedures and an emergency management plan.  The PSM standard exempts retail facilities from coverage; however, OSHA recently revised its retail interpretation which exposes approximately 3,800 formerly exempt facilities to enforcement.  As a result, many previously exempt facilities, such as anhydrous ammonia dealers, must now comply.

In 1992, OSHA explained that chemicals in retail facilities are generally sold in small packages or containers (i.e., incidental to the sale of merchandise).  Over the years, OSHA also issued a series of guidance letters providing even broader applicability to the retail exemption.  For example, a facility that derived more than 50 percent of its income from direct sales of highly hazardous chemicals to an end user were considered exempt, even though such facilities may have distributed chemicals in large quantities.

In July, 2015, OSHA rescinded all prior policy documents, stating that “[o]nly facilities, or the portions of facilities, engaged in retail trade as defined by the current and any future updates to sectors 44 and 45 of the NAICS Manual may be afforded the retail exemption at 29 C.F.R. 1910.119(a)(2)(i).”  Therefore, employers with PSM-covered processes formerly exempted under OSHA's 1992 interpretation of “retail facility” must now comply with requirements of 29 CFR 1910.119, unless categorized in one of the NAICS sectors above.  For a 12 month period, OSHA will exercise enforcement discretion with respect to facilities that previously were considered retailers.