Calculating costs: OSHA standards for construction and general industry

Until you get into the construction business, you probably don’t think about health and safety, or OSHA, too often. However, as soon as you start your business, whether you realize it or not, OSHA standards for construction and general industry will apply to you and your business.

As a construction estimating software company, we often work with our customers to help them build OSHA costs into their estimating rates. In this article, we’re going to look at what OSHA standards for construction and general industry are, why we have them, how to become compliant, and what kinds of costs you’ll need to factor into your quotes.

What Are OSHA Standards for Construction and General Industry, and Why Do We Have Them?

We’ve all seen the iconic picture of the ironworkers eating their lunch on a girder hundreds of feet above the streets of New York City. There’s no fall protection in sight, and none of them are even wearing hard hats. It would be unheard of on a modern construction site, and the reason for that is OSHA standards.

A hundred years ago, construction was the Wild West. Workers were forced to make do with what they had, and safety was not a consideration. As a result, many people were severely injured or even died on the job.

It might surprise you to learn that it wasn’t until December of 1970 that President Nixon made OSHA standards for construction and general industry law. Until then, standards and guidelines existed, but they were mostly optional and often ignored.

OSHA standards are safe work practices that govern work on construction sites, in offices and in other work areas. They are designed to mitigate risk as much as possible and to keep workers as safe as possible.

Because OSHA is a law, employers who don’t comply can be fined or have other penalties imposed, and if your lack of compliance leads to death, you could even spend time in prison!

The goal of OSHA is to make sure every employee goes home safely every day.

Where Can You Find OSHA Standards?

OSHA standards can vary from state to state and from country to country, although most developed countries have some form of OSHA regulations. In the United States, OSHA, or the Occupational Health and Safety Administration, is a division of the Department of Labor. You can learn all about the organization and their standards on the government website.

It’s important to remember that just as OSHA regulations can vary depending on where you live and work, they also vary by industry and by the type of work you do. So, OSHA standards for electricians would be different, in some ways, from the standards that apply to roofers or mold remediation companies.

It’s always a good idea to identify all the standards that apply to your company when you are working on being health and safety compliant.

How Do You Become OSHA-Compliant?

As we’ve already mentioned, the penalties for injuries or deaths that result from health and safety negligence by an employer can be severe. However, health and safety inspectors could still close down your site even if you don't receive a fine or jail sentence for a serious incident.

These inspectors can visit any job site at any time, and if they find that you are not OSHA compliant, they can and will force you to stop work until you are.

Of course, that means it’s a good idea to get compliant before you run into trouble, and here’s how you can do that:

• Research the OSHA standards that apply to your business
• Create—or hire a professional to create—a health and safety plan for your business (having a documented health and safety plan is a big part of compliance!)
• Invest in PPE (Personal Protective Equipment) for your employees
• Provide employees with training that they might require to do their job safely, such as fall protection training, first aid training, or training to use machines and equipment properly
• Create forms for incident and accident reporting, and track any health and safety events that happen on your job sites
• Make sure that worker's compensation is in place for your employees.
• Ensure that you have the right kind of insurance, including public liability insurance
• Enforce health and safety standards. It’s your duty to ensure that your employees are compliant with your regulations and to discipline them if they are not

Becoming OSHA-compliant can be quite a process, but there’s no better time to get started than right now.

Cost Implications of OSHA Compliance

Now that you know why we have OSHA, what it’s meant to do, and how to get compliant, the next thing you probably need to know is how to cover the cost implications of OSHA compliance in your construction estimating software and to build it into your pricing.

Whenever you calculate any quote, there are three basic components to the price: material and associated costs, direct labor and associated costs, and overhead costs.

Material and associated costs would include things like transport and freight, manufacturing and product testing if required, for instance.

Direct labor and associated costs are usually built up from the cost of your crew, equipment and fuel, vehicles to get them to site, and other tools they use on-site, like tablets and cell phones.

So the place that you will put your OSHA costs is usually in your overhead component. These are costs that you have to cover, regardless of how much or how little work you do in a month. Some of the costs that you need to calculate to include OSHA costs in your construction estimating software system are:

• PPE for your crews
• Worker’s compensation premiums
• Insurance premiums
• Training
• Documentation
• The time and labor required to complete paperwork
• Any apps and tools you use to manage OSHA on your job sites

The simplest way to calculate this is usually to calculate your total OSHA compliance costs for a busy month and then divide it by the number of crews you have. Then divide it by the number of hours in a typical work month and add a markup.

You can add this OSHA cost component to your standard direct labor rate, and you will always be sure you’re covering the cost of OSHA compliance in every quote.

Take Your estimation to the Next Level

Now that you know a little more about OSHA, how it works and how to calculate costs, you might also want to improve your construction estimating software. If you’re still using spreadsheets, pencil and paper, and quotes are taking hours to finish, you’re missing out on sales opportunities.

Bolster is a different kind of construction estimating software that’s designed to be easier, more user-friendly, and more accurate. Our team will help you create labor rates that include all your costs, including OSHA, and because our system uses a clever web crawler, you’ll always be using the very latest prices from every supplier.

Customers love Bolster, too, because it’s so easy to create a variety of options for them, and they can choose the options and upgrades they want right from your quote presentation.

If you’re tired of estimating the hard way, contact our team here. We’re happy to answer your questions or schedule a demo so you can see our construction estimating software in action yourself!