Senate Standing Committee on Labor, Public Employment and Retirement

We will get started here momentarily. Thank, thank you for your patience. Thank you for being here.

Good morning? Good morning. Good morning. We will get started here. Thank, thank you everyone for being here. This is a oversight hearing of the Joint Legislative Audit Committee, the Assembly Labor and Employment Committee, and the Senate Labor, Public Employment, and Retirement Committee. Thank you to the respective chairs, Assembly Member Ortega, Senator Smallwood-Cuevas, for being here.

Thank you to my Vice Chair, Senator Laird, for joining us, and all of you, and every one of our JLAC hearings are very serious and the issues that we discuss are always very pressing and prescient. This one is particularly sobering, I will say.

And whenever you're talking about workers in our state suffering death or being maimed at the workplace, I think we all pause and we all take a beat and take a moment to figure out how we can do better, and I think that's why we're here. I think that's why we're having this discussion.

I want to thank Chair Ortega for bringing this audit request last year, which was much-needed, and the audit that we are discussing today--and I want to thank our State Auditor, Mr. Parks, for being here and his staff and all the great work on this audit--the report is titled, 'The Division of Occupational Safety and Health Process Deficiencies and Staffing Shortages Limit its Ability to Protect Workers,' and I think that that title really drives home exactly why we're here.

This report came about because of media reports regarding horrible incidents occurring at places of employment. One story, which was tragic, involved a construction worker who was crushed by a falling pipe and he was permanently paralyzed from the chest down. What made this even more startling to read was that Cal/OSHA's Bureau of Investigations never actually investigated the incident because this man did not die, and because he was merely paralyzed from the chest down, it didn't actually rise to the level of investigation for Cal/OSHA, which again, I think is something that we need to discuss today, and that's why we're here. But it has kept going, unfortunately.

Last month, there were at least two horrific workplace tragedies that I hope will be fully investigated by Cal/OSHA. One instance was in Vernon, just outside of Los Angeles, where a worker who was just 19 years old was killed in an industrial food processing equipment accident.

Just for a moment, think about what that means and what happened to this young man. And in Esparto, just 45 minutes west of here, seven workers were recently killed when a warehouse storing fireworks exploded. Some victims were loving fathers and husbands. Two were just 18, barely out of high school, and one pitched his final high school baseball game just weeks before he was killed, and he actually led his team to a league championship.

You know, these are real lives, these are stories, and although a lot of this is numbers and we're going to be talking about budgets and staffing, you know, these are, these are our family members, you know, these are our community members, and we need to make sure that we are protecting every worker in the state.

And I think everyone here on the dais, everyone here in the room, we're all concerned about worker safety and I think we can all agree that we want workers to have safe workplaces, we want our friends and neighbors to have safe places when they go to work and when they return home, safe every day.

That is the goal, all of us here strive to do that individually, and we in California obviously proudly have some of the most stringent worker protections in the country, and I love reminding all of my friends outside of California that we take care of our workers and we're very proud about that, and that's wonderful and great.

However, these protections can potentially be viewed as being toothless without adequate enforcement, and I think that is one of the things that we're going to talk about today is just how are we enforcing these stringent protections? And that again brings us to the report, and I do want to thank Assembly Member Ortega, chairwoman of our Labor Committee for being such a strident advocate on this.

Very briefly--and then I'm going to turn it over to my vice chair and our Madam Chairwoman for opening remarks--the audit identifies many shortcomings in Cal/OSHA's investigation of workplace accident complaints.

The report questioned whether Cal/OSHA had sufficient reasons for closing many workplace complaints. The report also questioned why Cal/OSHA did not conduct on-site inspections when they clearly should have. And the State Auditor also found that Cal/OSHA did not timely begin inspections. Under state law, they must begin within three working days.

Instead, it was taking weeks or even months to begin an inspection. Today we'll be discussing all of these findings and much more, and I hope to hear that the department is taking immediate action to improve itself and implement the State Auditor's recommendations. And again, thank you for everyone.

A few housekeeping items before I turn it over to to my co-chairs here. I ask that the presentation is kept to 15 minutes by the State Auditor if possible. Obviously, Mr. Parks, if you need more time, please. This is serious. Take as much time as you want.

Approximately ten minutes for the Department of Industrial Relations and five minutes for each participant on the third panel. Again, we--this is very serious. We will give you more time if needed. Following each panel, we'll have members ask questions.

I do just want to note to the extent there's any disruptions or disturbances or anyone trying to impede the hearing, we will conduct an orderly meeting and we will pause if we need to. With that, Mr. Vice Chair, would you like to make an opening statement?

Thank you, Mr. Chair. I appreciate your comments. I want to thank the Assembly Labor Chair for initiating this audit, and obviously, worker safety is just an amazing priority for all of us, and for me, there was a major incident in my district with regard to the battery storage fire, and we--and miraculously there were not major injuries, but it is exactly situations like that that we hope the department will stay on and will make sure that they are looking at before there is a tragedy and before there is the potential for major injuries.

And for me, this is an intersection because I am not just vice chair, but I sit on the the Senate Labor Committee, and on the Rules Committee, we have had two confirmations of OSHA leaders, and we have tried to vet these issues during the confirmation process as well to exactly see what the progress is on vacancies and other issues that I know that will be at the heart of the hearing today. So thank you. I look forward to the presentations and the questions.

Thank you, Senator Laird. Chairwoman Ortega.

Good morning, everyone. Thank you, chair and vice chair and committee staff for putting together this hearing on the audit that I requested last year. I also want to thank our State Auditor, Mr. Parks, and his staff for all the work they put into this report.

Also want to acknowledge Director Osborne and Chief Lee for your time here today. You know, I did request this hearing last year while I held my first hearing as chair of Labor and Employment on farm worker safety, and I remember what I heard that day from farm workers who work under extremely high temperatures and are not provided the proper protections from their bosses was not just infuriating but it was very, very concerning.

And what was more upsetting was learning that even though we have some of the strongest labor laws in the country, they were not being enforced, and so I asked for this audit, made the case for it, my colleagues voted to support it, and today we're here to listen to hear the report.

And I have to say that this audit has made it very clear what I have known for some time, and that is that Cal/OSHA is not working. And yes, today we will probably hear a lot about staffing, but in my opening hearing, the last time I held this, I talked about the fact that we were actually coming out of a budget surplus where we had more money than we knew what to do with and we were contributing a, quite a bit amount of taxpayer money into this department, and yet, all I kept hearing about was staffing.

But the scale of Cal/OSHA's tasks, the lives lost, and the duration of the problem calls for an approach beyond just staffing. So I hope that that's not all I hear from this department today, because again, even when Cal/OSHA had more staffing, we still had insufficient enforcement and deaths on the job. What we really need to focus on is structural change, not more letters that do nothing to protect workers or save lives. I'd like to paint a picture of what we have right now.

In my own district, there's a scrap metal company called Alco Iron and Metals. Three workers have died there in the last eight years: Ray Alfaro, Alberto Anaya, and most recently Luis Fernando Guerrero. A few weeks ago, I met with Luis's wife, Paola, and his eight-year-old daughter.

Paola showed me in her phone the video that she keeps of the security footage of her husband Luis being crushed by heavy machinery. In each case, Cal/OSHA was called to investigate, but to this day, they have paid a grand total of $18,000 in fines for lives of these three men. That's three husbands, fathers, breadwinners. That's $6,000 per employee killed. Is that what a life is worth in California? Is that how we treat vehicular manslaughter when a drunk driver kills three people?

If we don't act today to reform Cal/OSHA, that's what we are saying to your husband, your dad, your best friend, to the people of California, that they're only worth $6,000 to the State of California. Well, I'm not willing to co-sign to that, not for Luis, not for Ray, and definitely not for Alberto and their families who deserve so much better from all of us. So I look forward to hearing from OSHA today and the department and what they're doing to address these concerns.

Thank you, Chairwoman Ortega. Hear hear, and well said. Chairwoman Smallwood-Cuevas.

Thank you, Mr. Chair, and I want to thank my good colleague, Senator--Assembly Member Ortega for her work and her passion, but more importantly, her commitment to change, and you know, James Baldwin said 'we can't change what we don't face,' and I think today is about facing the hard facts about the gaps in what our Public Health and Safety agency is doing to ensure that workers are able to go home to their children at the end of the day. That's what this hearing is about.

Before coming to the Legislature, I remember participating in worker memorials where we walked caskets down the street with the families of workers who had lost their lives on the job. They were not made whole, those families, and today is really in honor of so many of them so that we don't have those kinds of ceremonies in our cities because we aren't doing all that we can in this body, in this Capitol, to pass laws and enforce laws that hold employers accountable to the lives of their workers and the right to work--the human right to work--in a safe and healthy environment.

As the world's largest--one of the world's largest economy, the fourth largest, California leads the nation in policies that protect workers, and I'm proud of the work that we've done here in the Legislature, but I have to tell you, the results of this audit were stunning, and we don't have a lot to be proud of in terms of what we have done in the past, in terms of the investments, in terms of the innovation, in terms of the critical thinking, strategies, planning, and goals around ensuring that occupational safety and health is prioritized.

But that's the past and today is about moving forward and learning from what the audit has shown us to build new strategies, new protocols, new ways of engaging with employers and workers to ensure, again, that we have life-changing procedures and well-trained staff that are able to implement the laws that we pass here every single day.

Unfortunately, you know, even those who are finding good jobs often face exploitation and abuse and unsafe working conditions, and it is the responsibility and the duty of Cal/OSHA, of our public agencies to enforce those laws and to ensure workplace safety laws and regulations are duly followed, and more importantly, that we're prioritizing enforcement.

And I want to say, the glory years of a $97 billion surplus are over. We are now in a series of ongoing deficits where dollars to invest in enforcement will be hard to come by and we need our agencies to do the job and to have the mechanisms in place to hold employers accountable, levy fines and penalties, and be able to collect on those to go back into our enforcement infrastructure.

If we are not able--and what this audit has shown--if we are not capable of writing up good cases, if we are not able to document, if we are not able to levy fines and penalties against companies that are costing the lives of Californians to be lost, and we're not able to hold them accountable and to use dollars based on what their wrongdoing has created to come back into our budget to ensure that no other employer does the same thing, then we need to really question what we're we're doing here.

And I think this is about--as much as it is about health and safety, it's about also ensuring that there is a level playing field where employers are held accountable so that workers are safe and the State of California has the resources it needs to enforce our laws in every work site possible in this state to protect workers.

This is particularly important given the attacks that we're seeing on immigrant communities right now in some of our work sites where immigrant workers are by this Trump Administration. This is critically important as we're looking at severe heat conditions on work sites. We must ensure that all workers know that they will be safe at work, regardless of their immigration status because we have the laws to protect them.

We must know that workers will be safe with climate change and all of these conditions that are impacting their health and well-being on the work site. We have to ensure that they are protected. I do want to thank the State Auditor for this report, this thorough report. It reinforces a lot of what we already know, and our state has grown dramatically, and unfortunately, we know our resources for enforcing have not, have not kept pace with this growth.

Today is about building a foundation, the foundation we need to ensure safety for workers to make sure that we are supporting innovative solutions and that we're holding this agency accountable to the goals that will be set as a result of this audit so that we will not be here down the line, two years, three years, ten years from now having the same conversation. I hope today is just the beginning. I look forward to more discussions to come. And thank you again, Mr. Chair, for this opportunity.

Thank you, Madam Chair, and I will now open it up for any member or Senator who's here that would like to make an opening statement before we have the State Auditor join us for the presentation. And seeing none, Mr. Parks, please join us here at the table, and you are being joined by Nick Versaci, Senior Auditor Evaluator, who ran point on this audit report, and whenever you are settled, please feel free to begin.

Try again. Sorry about that. Good morning, Chairs Harabedian, Ortega, and Smallwood-Cuevas. I'm State Auditor, Grant Parks. It's a pleasure to be with you this morning. Last July, my office issued an audit report focusing on Cal OSHA and its processes for protecting workers from unsafe leaks labor conditions, in response to a request from Chair Ortega.

Among other things, Chair Ortega's request cited potential concerns over Cal OSHA's practices for investigating allegations of unsafe working conditions, such as by not conducting timely investigations or declining to investigate. The audit request also sought information over how Cal OSHA holds employers accountable through enforcement actions such as by imposing fines and collecting fees.

And ultimately, Chair Ortega asked my office to evaluate any structural deficiencies in calosha's processes for protecting workers and to identify the underlying root causes behind those deficiencies.

By way of background, our audit work primarily covered a five year audit period from fiscal year 2019-20 through 2023-24, where my staff reviewed data on complaint volume, the number of investigations conducted, and the resulting fines imposed in the amounts collected from employers.

My staff also reviewed a selection of 60 case files consisting of both complaints and worker accidents for the purpose of evaluating Cal OSHA's decision making when processing those cases.

Our audit also reviewed how Cal OSHA determined the fine amounts for 20 different violations across 10 cases, including three worker fatality cases, comparing Cal OSHA's calculation of the fines to our own calculations based on state law and Cal OSHA's policies.

And finally, we determined how initial fine amounts were later reduced through post citation settlement processes and we attempted to ascertain the rationale behind Cal OSHA's decision making when deciding the magnitude of any fine reductions.

So overall, in terms of our audit findings and observations, our audit noted a number of underlying root causes that led to the findings that I'll talk about a little later in my presentation. But these root causes, in our view, limits Cal OSHA's ability to protect workers.

The first one, which we've already touched on a little already this morning, is that at the time of our audit period, Cal OSHA was facing significant staffing shortages.

In 23-24, the last year of our five year audit period, Cal OSHA had a 32% vacancy rate with some of its district offices, such as in Bakersfield, Santa Ana and San Bernardino, having vacancy rates of 50% or higher.

This can lead obviously to an overstrained Cal OSHA workforce that is limited in how many inspections or other enforcement activities they can engage in to protect workers.

Some of the explanations we heard from Cal OSHA for the limited staffing, too few qualified candidates, limiting the applicant pool difficult to manage hiring systems that weren't integrated in a centralized process pay disparities among different worker classifications that led to high vacancy rates in certain positions and also internal attrition within Cal OSHA where workers are leaving to seek more manageable workloads elsewhere.

The second root cause that we identified during the audit is that Cal OSHA's case files are hard copy based and there is no electronic case management system to help it manage its workload.

For example, one accident that we selected for review was ultimately unavailable because Cal OSHA accidentally destroyed it in a mistake when storing several boxes of hard copy case files.

And for the hard copy documents we could review, missing information or illegible case notes created ambiguity for why certain cases were not inspected or why initial fine amounts calculated by Cal OSHA were lower than expected.

And third, many of the the third root cause many of Cal OSHA's policy and guidance documents are outdated or are unclear and haven't been updated or revised for several years, leading to inconsistency among staff and managers at different district offices and how they justify and then document key decision making.

For example, Cal OSHA's policies on employer citations and verifying abatement was last updated 17 years ago, and its accident investigation policy is currently marked draft and includes provisions of law that became obsolete and 2020. These underlying root causes have resulted in audit findings in three General areas.

First, Cal OSHA's inconsistency when deciding whether and how to respond to worker accidents and complaints. Number two, Cal OSHA's inconsistency in the timeliness and the quality of the work it performs.

And third, we believe Cal OSHA is missing opportunities to protect workers by not always requiring evidence of corrective action from employers or by limiting employer accountability by reducing fine amounts with limited explanation.

So now I'll go into those three General finding areas in a little bit more detail with respect to deciding whether and how to respond to worker complaints and accidents. And I'll start with complaints. In fiscal year 2324, Cal OSHA received roughly 10,500 valid complaints alleging workplace health or safety concerns.

And Cal OSHA typically handles these complaints in one of two ways. One way is Cal OSHA staff conduct an on site inspection of the employer. The second approach is Cal OSHA directs the employer to self investigate itself and report back to Cal OSHA and that's called a letter investigation.

And these letter investigations are actually very common in 23-24 Cal OSHA conducted their own on site inspections just 20% of the time while letter investigations were conducted by employers were used more than 80% of the time and notably these letter investigations do not result in fines.

Our audit also questioned Cal OSHA's decision making when not conducting its own inspections for nine of the 30 cases we reviewed because Cal OSHA often lacked evidence to demonstrate they were following Cal OSHA's policies.

In one case where we disagreed with Cal OSHA, a worker complained that its employer had failed to fix an air conditioning unit in the kitchen where the temperature often exceeded 90 degrees and the worker was taken by an ambulance to the ER for help for heat illness.

Cal OSHA's policies required an on site inspection but one was not performed and notably Cal OSHA received a similar complaint about the same employer's air conditioning unit a few months earlier and at the time Cal OSHA required the employer to self investigate that case. But Cal OSHA had yet to hear back from the employer.

So Cal OSHA sent a second letter citing manager discretion for the justification of not doing its own on site inspection and when responding to the second letter, the employer did not provide evidence to show that the air conditioner was actually fixed, such as with repair invoices or photographic evidence or other indications of corrective action.

Employers not providing clear evidence that they fixed unsafe working conditions was a common observation we noted during the audit for these letter investigations where employers are investigating themselves.

We noted this in 15 of the 24 instances where employers self investigated their own violations and in three of those 24 instances Cal OSHA closed the complaint without ever documenting a response from the employer. As for accidents, state law generally requires Cal OSHA to review the cause of any employment accident that results in serious injury.

During the audit we noted instances where Cal OSHA decided against conducting on site inspections of employers despite work injury descriptions in the case files that appeared concerning to us. When we asked Cal OSHA why they did not inspect these cases, they often provided additional context and information that was not present in the files that we could corroborate.

In one example, an employee suffered a laceration of the shin from a chainsaw resulting in surgery and an overnight stay in the hospital and six weeks of recovery.

You yet the case file did not explain while Cal OSHA conducted well that the case file did not explain why Cal OSHA concluded this was not a serious injury worth inspecting and the manager verbally explained that it appeared that the worker was wearing safety equipment, but there was nothing in the case file to substantiate that or explain why the employer potentially was not at fault.

In another example, a worker was struck in the head resulting in a skull fracture that rendered the worker unconscious for five to 10 minutes. But Cal OSHA explained to us that the worker likely had not been formally admitted to the hospital for inpatient care, thus making the injury less than serious.

But the case filed noted that the worker was actually in the hospital for nine hours getting treatment. Understaffing was often the cause cited by Cal OSHA staff for the lack of inspections.

Every district manager we spoke to during the audit indicated that they were short staffed and they'd like to be able to do more, but they lacked the resources to do so. Beyond questioning why inspections weren't taking place, we also noted weaknesses with the timeliness and the quality of the inspections that Cal OSHA was performing.

With respect to timeliness over a five year audit period. We noted late on site inspections for imminent hazard complaints for the most dangerous cases starting late between 6 to 10% of the time or 50 to 170 cases per year.

For serious injury complaints they started late around 23% of the time, roughly 400 to 500 cases per year and the remaining complaints were started late around 40% of the time or roughly 1,000 cases per year. And these statistics from Cal OSHA mirrored the results of our own case reviews in terms of timely investigations.

We also noted issue with the quality of the inspections themselves. Cal OSHA does not consistently evaluate employers implementation of the Illness Injury and Prevention Program plans that employers are required to required to develop under law.

Inspecting these plans are important because it gives Cal OSHA a sense of the employer's workplace culture and the safety practices that they've established to protect workers.

But for seven of the 15 complaint inspections we reviewed, they lacked a complete evaluation of the employer's IIPP plan and we noted that Cal OSHA has not established expectations for how its staff are to document their evaluations and conclusions with respect to employer compliance. The quality of Cal OSHA's inspections is also hampered by inconsistent documentation practices.

We saw hard copy case files missing relevant worksheets that are used to ensure adequate evidence is collected and documented. Not using this tool at times led to gaps in the evidence that Cal OSHA collected that had negative outcomes in holding employers accountable.

In one of the fatal accidents that we reviewed, the case file did not include any violation worksheets to ensure all necessary evidence was collected and organized and when the employer appealed the serious violation imposed, Cal OSHA reduced it to a General violation with a fine of $600.

Cal OSHA's own internal Auditor noted in 2023 that inspection case files were not always complete missing interview notes and violation worksheets, concluding that outdated policies and multiple versions of the same form are part of the problem.

Our audit also took issue with how Cal OSHA is ensuring that corrective action is being taken by employers and that fine reductions are explained adequately and justified in terms of demonstrating corrective action. Earlier I mentioned when employers self investigate themselves, they often didn't provide evidence that they took corrective action.

But we saw a similar pattern with Cal OSHA's own investigations where Cal OSHA staff did not consistently obtain evidence that employers corrected issues found during on site inspections.

State law and Cal OSHA policy requires employers to certify that they have fixed unsafe working conditions, but neither the law nor Cal OSHA policies are explicit when it comes to documenting and verifying that corrective action has been successfully taken.

We had expected to see evidence such as photographs and repair invoices demonstrating that the working conditions had been improved following a Cal OSHA inspection, but five of the 11 cases that resulted in citations that we reviewed lacked supporting evidence and in some cases even lacked the employer's certification of correction.

Similarly, in 2023, federal OSHA found that 27% of Cal OSHA's files lacked sufficient documentation to demonstrate abatement, and in 39% of those cases where employers certified that they had fixed the problem, there was not documentation that Cal OSHA inspectors had observed or verified abatement.

Our audit also identified instances where Cal OSHA staff made questionable decisions when calculating fine amounts, potentially leading to lower fines imposed on employers than would otherwise result under applicable regulations.

In our audit report, we walked through an example where a worker was killed during a forklift accident where a supervisor from that company was driving the forklift unsafely, and we compared how Cal OSHA calculated the employer's fine versus our own calculation.

Cal OSHA classified the accident as just a General violation with a $2,000 base fine, but based on the facts presented, we classified it as a serious accident given the fatality, and we applied a higher base fine of $18,000.

Cal OSHA determined that the employer had a good compliance history without evidence to explain why in the case files resulting in Cal OSHA applying a partial fine reduction, though we found the employer had two previous violations and wasn't entitled to a fine reduction, especially due to the severity of the accident, Cal OSHA granted the employer an abatement credit that reduced the already low fine by 50%, which is standard for General violations, but our calculation recognized that 50% fatal and serious accidents aren't eligible for abatement credits under Cal OSHA policy.

And after applying all other adjustment factors, Cal OSHA ultimately imposed a fine of $21,000 roughly for the entire case, while our calculation was nearly double that amount at $40,000.

When we showed this example to Cal OSHA's district manager, he could not provide a clear explanation for the disparity and could only speculate what Cal OSHA staff might have been thinking when calculating the fine amount.

A contributing factor to the inconsistency is Cal OSHA's policies that do not specify how or where personnel should document their reasoning when calculating fine amounts. I can tell you, going through the case files, it was particularly difficult for the audit team to get at the rationale behind the decision making.

Decisions were documented, but the why was difficult to follow. In 14 of the 20 violations we reviewed, Cal OSHA did not document or explain at least one fine adjustment factor which caused OSHA's fine to be lower than may have otherwise been warranted.

And we also noted during the audit that once that fine is initially imposed, it can be further reduced as part of a settlement negotiation process between Cal OSHA and employers.

Over our five year audit period, roughly 23,000 inspections included fines and 36% of those had reductions as part of a settlement with Cal OSHA and the size of these reductions varied in size, but roughly on average it was 56% reduction of the original fine amount and we reviewed eight cases where each fine was reduced by more than $10,000 and in six of those eight cases Cal OSHA lacked a rationale or explanation for the magnitude of the fine decrease.

In one case, two workers suffered amputations because of a tree trimming accident and Cal OSHA initially imposed a fine of just over $36,000 citing three serious violations and one General violation. But after the employer appealed, Cal OSHA reduced the fine by 41% for a reduction of $15,000 to a reduced fine of just more than 21,000.

Cal OSHA's case notes did not document any explicit rationale or justification for the reduction, but the evidence we reviewed noted that the employer had claimed that multiple serious violations could jeopardize its ability to obtain contracts and Cal OSHA ultimately vacated one serious violation and downgraded another serious violation to just a General violation.

While Cal OSHA policies specify that district managers shall document post citation settlement conferences with the employer on a particular form and that the reductions defined amount should be documented Again, the underlying rationale and reasons for why these reductions are being applied is not required to be documented or explained, so it limited our ability to provide the Committee with information as to why those decisions were being made.

Cal OSHA policy also doesn't clearly specify how fine reduction decisions are to be documented and justified when attorneys are involved or when attorney client privilege may apply.

So overall, in conclusion, without the staffing needed to meet its workload, without clearly understood and updated policies for its staff to follow, and without a reliable way to monitor staff performance and manage caseloads, Cal OSHA may continue to struggle in responding to worker complaints and holding employers accountable.

To its credit, Cal OSHA accepted the audit's findings and indicates it is working towards implementing our many recommendations. Our first chance to review Cal OSHA's progress will be at our 60 day mark, which is mid September, and we look forward to reviewing Cal OSHA's responses and providing further updates at that time.

I have Nick Versaci, the audit team leader who assisted with the audit. We'd be more than happy to answer any questions you may have.

Thank you Mr. Parks. And there's a lot to unpack there and I think there's going to be a number of different questions. And I appreciate all the work that you and Mr. Versace did on this audit and I will first turn it to my Vice Chair and then my co chairs for any questions.

Thank you very much. I have one question and it will also be of the the agency. But in your audit report on page 71 you have an Appendix B which deals with staffing and vacancy rates. And you mentioned staffing and vacancy rates and the latest year is 2023-24 and it shows a 32.3% vacancy rate.

And in one of the discussions outside this hearing there was a question about whether or not in budget sweeps a bunch of positions were taken and then it altered the vacancy rate and it looked like something was happening as opposed to the positions being swept. And this chart doesn't totally reflect that.

So I was wondering if you could comment on maybe where it is now and how much of the lowering of the vacancy rate is really the sweeping of positions and how much is the fact that vacant positions have been filled.

Thank you for the question. Yes, our five year audit period stopped in 23-24 because we were doing our work in 24-25. That was the last year, a complete year. But with respect to your question, I reviewed the materials that Cal OSHA submitted in advance of this hearing. It sounds like they swept or 66 positions roughly were swept.

And by doing that, that has the practical effect of artificially lowering the vacancy rate. As you lower authorized positions, you're also reducing vacant positions. But reducing authorized positions doesn't necessarily bear any relationship to the number of people you actually need to do the work and to handle the caseload.

Less than a year ago in November, Cal OSHA hired an external consulting firm to do a workload analysis to help them identify how many additional staff they needed in order to stay on top of their incoming work. Not just what they were handling presently, but the stuff that they weren't able to address in a timely manner.

And that consultant recommended to Cal OSHA that they needed roughly 265 more people than they did at that time. And so I, I haven't audited or reviewed the materials that Cal OSHA submitted for today's hearing. It looks like they're asserting they may have hired 120-127 people or so. If that's true, that's an impressive start.

I would have questions about where those hires are applied, what roles are they serving, Are they in the enforcement branch, what positions are they in? And those are the kinds of things that we would be asking Cal OSHA about when we get their 60 day response.

But yes, the sweeping of positions has the practical effect of lowering vacancy rates without really addressing the root cause of how many people do you need to handle workload?

Thank you. You anticipated my other question and you answered it. And so I think that that's just a heads up for the agency. When they get up here, we will really a look for their take on this in the numbers.

And the reason it's important for those of us up here is one of our questions is what can we do to help? And it seems to me two of the issues are the vacancies and trying to assist or adequate positions to do it and frankly, adequate salaries.

Because if the vacancy rate is really high because we can't recruit at the level of salaries that exist, then we should face into that question. So thank you. I appreciate the opportunity.

Thank you, Mr. Vice Chair. Chairwoman Ortega.

Let's assume Cal OSHA is fully staffed. They have everything they need. Would we still have some of these.

Problems if they only addressed staffing? I would say it's likely they would still have some of the problems that we're encountering today. It's not just about staff. It's about having consistent, updated and clearly understood expectations for staff to follow.

There are policies in Cal OSHA's manual that haven't been updated for 17 plus years that reference out of date requirements. And also what's problematic here is that it's not just having updated policies, but it's having a mechanism to be able to monitor whether or not your employees are actually following those updated policies and practices.

Cal OSHA's practices are largely hard copy based. There isn't an electronic case management system, files aren't digitized, which makes it more difficult to be able to monitor on an ongoing basis whether or not Cal OSHA's employees are meeting the expectations and the policies as they're defined. So it's not just a staffing issue.

It's there's got to be clear expectations in terms of what Cal OSHA expects its staff to do. And that needs to be backed up with some sort of monitoring mechanism where Cal OSHA is in a position to know whether or not their own employees are actually following through or not.

Thank you. So, I mean, the way I'm looking at this, you know, even if they were fully staffed, as you mentioned, there's still not clear directions in terms of the letters and the inspections, the lack of criminal referrals and the setting and the reducing of the fines.

I want to ask you a little bit more if it's okay through the chair when it comes to these fake letters, and that's what I'm going to call them, because they're not doing anything to save anyone's lives. What is the process? When do they decide to send one of these letters and then what is the result?

And how many have they sent in the last five years?

I turn that over to Nick. Can you talk a little bit about letter investigations?

Yeah, thank you for the question. So my name is Nick Versaci. I was the team lead on the project. So when they first get a complaint in, that's when they decide whether it's going to go through an on site inspection or to send a letter investigation.

And they have a policy for that that has been under revision that we have recommendations to clarify. They mostly rely on letter investigations in the data. So you asked about the last five years.

It's generally been about 80% or more, as the State Auditor had referenced, as far as how many of those complaints are resolved through letter investigations. So they've been relying on that process heavily and we recommend ways to conduct more on site inspections instead.

Can you talk a little bit more.

About how they decide and what's the result of these? So we're using these letters 80% of the time. What is the result of these letters?

Yeah. So when the employer gets the letter, they're supposed to look into the allegations and respond to Cal OSHA explaining what they've done to address and correct those hazards. So we, we actually had findings in the audit that when Cal OSHA got the letters back, there wasn't supporting documentation always in those responses.

And in three cases we actually didn't see any response from the employer. So we had issues with, I believe, 15 of the 24 letter investigations we reviewed that the hazards actually had not been corrected.

The other thing that I would point out too, that I mentioned in my comments is when these letter investigations are conducted, when the employers are investigating themselves, there are no fines or penalties that can attach to that.

And so the decision point to do a letter investigation, it's essentially a trade off that Cal OSHA is making where they may argue that they can address issues more expediently by having the employer investigated.

On the positive side, potentially, but on the negative side, it's really hard to hold employers accountable when they're investigating themselves and no fines can be imposed. And so I think it's a trade off that Cal OSHA is making about when to do letter investigations and when it's not.

And I think a factor in that is its decisions about how to best deploy its staff.

On the issue of the fines, can you tell me how many fines have been sent out and how they were reduced?

So we have a table in our audit report, it's the appendix, it's table A5, where over a five year period we provide information on what was the total amount of the fines assessed initially and then what was the amount after reductions and then how much was actually collected.

And so in that table, and I'll just look at fiscal year 1920, the first year, as an example, we show that Cal OSHA initially assessed fines of roughly $40.7 million. After reductions through settlements and other processes, that amount was reduced to 28.2 million in fines assessed. And of that amount, $20.4 million had actually been collected.

Now, the further out you go in years, the closer you get to collections being more equal to the amount of the fines actually assessed in the more recent year. For example, in 2324, you can see that there was $30.6 million assessed after reductions and only 7.9 million had been collected.

And there are a variety of explanations for that. Part of it can be that employers are on payment plans and so they don't pay the entire amount right away. Sometimes there's collections that are applied for employers and then also employers at times go bankrupt and you never collect the full amount.

And so it wasn't surprising to us, the further back in time you go to that 1920 fiscal year, you get an amount that's closer to the amount of fines that are imposed.

When I looked at this chart, you know, one of the things that stood out was in the last five years looked like more than 8,000 fines were reduced by more than 56% or more.

You're comparing the amount of the fines initially assessed to the total amount of the fines currently assessed, Correct? Right. And as I mentioned in my presentation, when we looked at individual case files, we had examples where fines were reduced 40% or more and there wasn't clear explanation or documentation in the case files justifying that decrease.

And so our ability to comment on why those reductions are occurring is limited based on the quality of the evidence that exists in Cal OSHA's records.

So right now you couldn't tell me who made the decisions and why? No. Okay, I'll be asking that. And then one last question. Can you tell me how many serious cases were referred for criminal prosecution?

Yeah, thank you for the question. So I think we say in the report it's about seven or eight per year are actually referred for criminal prosecution. In the five years we looked at, I think it was 31 or 32 total.

And so that came to an average of 1.7% of serious cases.

I don't know that we talked about the average, but yes, it's very low.

Yeah, very low. And again, what was, how does one get referred? What's the decision making process?

Yeah, so the Bureau of Investigations looks at those cases for potential referral. So they get notified of a case with a serious violation and a fatality or serious injury to five or more workers. They investigate those cases and then decide whether to refer the case to local prosecutors.

They also have the ability to look at serious injuries that are not fatalities. So we really had two concerns in the audit.

One of the concerns is the Bureau at the time of our audit, did not have policies and procedures explaining how do you document that reasoning for whether or not you're going to investigate a case and then whether or not you're going to refer it. So that was our recommendation.

Thank you.

Thank you, Madam Chair. Chairwoman Smallwood-Cuevas.

Thank you, Mr. Chair, and thank you for that thorough overview. I have a few follow up questions for you. So you talked a little bit about the vacancies and I understand your answer to Senator Laird's question about what accounts for lower vacancy rate.

I was still confused about how you found that we had a rate of 32% in 23-24. And then note that, you know, by May 31, 2025 positions across the division was at about 12% and confused about why the difference in the data.

And have you had a chance to review DIR's evidence of improved vacancy rates and what can you share about the differentiation?

Thank you for the question. Just to clarify for everyone, the 12% vacancy number is not our number. It wasn't part of our audit. Our audit period ended in 23-24. And my understanding is that Cal OSHA is asserting that 12% vacancy rate is 24-25.

And so one of the things that we'll be doing when we get Cal OSHA's 60 days, six months and one year responses will be asking questions and seeking evidence on how many people are you actually hiring and what positions are you hiring them into.

And so without being able to see the underlying data, I'm just not in a position to comment on that 12% figure.

So we'll see that in the September update that will be clarified. Okay, perfect. Just a follow up question on that. We know also since that time our budget has looked become more and more dim, our outlying years and prospects.

So I'm curious about this data where there seems to be many positions that are to be eliminated at DIR in the 25-26 fiscal year, and many within Cal OSHA in particular, and some in the industrial hygienist space, which is where the real enforcement, the ground level enforcement is happening, is the first step in the process.

And so given what you've learned through the audit, how detrimental would it be for us to see an elimination of these positions, particularly that one as it relates to ensuring safety for families. Because, you know, we're going to check, you know, the discrepancy. But now we have another layer of cuts that are being proposed to eliminate positions.

Thank you. The industrial hygienist position, if I recall correctly, was one of the positions in Cal OSHA that had the highest vacancy rates. And so not filling those positions would be incredibly problematic.

In fact, I believe when Cal OSHA's consultant came in and said you needed 265 more people, the vast majority of those positions were for industrial hygienists.

And so one of the recommendations we have in our audit report is Cal OSHA really needs to go final as quick as it can in making a decision now that it's got its feedback from its consultant about just how many people do you need to handle the workload that you have?

I'm hopeful that in the longer term, as it gets its case management system, maybe it can achieve some more efficiencies and perhaps won't need the full complement of people. But as of today, based on the practices and the policies that it follows, clearly they have a need for a large number of additional staff.

And it sounds like based on Cal OSHA's response today, they're making progress towards hiring additional folks.

Thank you for that. So this audit just really shined light on all of the different aspects of the procedural process for investigating, inspecting, follow up, the fines and citations. So many factors that this audit looked at and found some gaping holes in the way in which this work is being done.

As you think about the broad sort of set of areas that need to be addressed, where would you say Cal OSHA needs to focus most of its attention, its resources, to be able to move the needle from where we are right now, which is unacceptable in so much of what has been laid out here in terms of, you know, how we are hearing from workers and collecting their information, to how we are communicating with employers, to how we are identifying the severity of cases, to, you know, implementing the fine regime and so much so on and so forth.

You know, you gotta eat this elephant one bite at a time in order to be able to see concrete changes. Where would you focus? What would be top 23 priorities that you think the Department really needs to drill down in?

And can you share some sense of what would be the sequence of that in terms of being most effective?

I think it's a short term and long term discussion. I think in the short term they really need to solidify and make consistent what are their expectations for their employees? When are you going out to do inspections versus when are you not?

We are often seeing in the case files Cal OSHA employees applying their own discretion and sometimes employees in different offices coming to different conclusions about what's an accident related case versus what's just a General violation.

And so I think there needs to be clarity in Cal OSHA's policies and the training for its employees so that everybody's operating off of the same page, so to speak. Cal OSHA has hired a policy writer to help them update their policies and procedures.

And so we look forward to seeing sort of what the timeline expectation is for Cal OSHA in that regard. But I think the problems that Cal OSHA is facing is really a sort of a three legged stool. The first one is you got to have the people to do the work.

The second leg of the stool is people need to know what they're expected to do. And the third leg of the stool is Cal Ocean Management needs to be in a position to know whether or not their employees are following through on those expectations.

And currently we don't have any of those three legs fully fleshed out, in our opinion. We have staffing that needs to increase. We need staff that need to know what they're expected to do and when they're expected to do it.

And Cal OSHA is hoping that through its case management system, that it hopes to have come online in 2026, although in the audit report they told us 2027 that they'll be better positioned to make sure there is greater consistency in the case files and that they can monitor whether or not employers or employees are actually following through in terms of how cases are supposed to be handled.

But in the interim, before that case system is operational, I think it's a really good idea, and we made a recommendation to this regard, is that Cal OSHA's own internal audits unit needs to do continual recurring audits of the operations of the field enforcement branch and unit to make sure that as Cal OSHA is making these incremental changes, that there is a monitoring mechanism through internal audits to report back to management whether or not what they're seeing on the ground is actually being implemented in practice.

That is a real work plan that needs to be set up and followed. And I appreciate you laying that out. And, certainly, it's going to be incumbent upon us to ensure that those steps get followed every step of the way.

And, incredible that an agency that has been around for decades—it doesn't have any legs to its stool. My final question here has to do with the fines.

And, you know, federal OSHA found that although Cal OSHA had a higher fine base amount for serious violations, the average fine that Cal OSHA is levying per inspection was below the national average. And, to me, that means the accountability edge is dull.

We're not using that to its fullest potential, and we're missing out on the resources coming back to fuel and fund the enforcement. How does Cal OSHA's average fines compare to those in other states, especially states that have fewer labor protections than California? I did notice in the report there were just...

In terms of just the simplest things, in terms of intake—you know, places like North Carolina had far more sophisticated ways of receiving worker complaints and intake, which was... which was shocking to me.

So, I'm just curious: has there been any assessment, nationally, in looking at how states are outpacing us in terms of what kinds of fines are being collected to support enforcement?

Yeah, so I may start off with the general answer, but I may need to rely on Nick to—to follow up. We focus primarily on Cal OSHA and its application of fines. And so I, again, I come back to, you know, as auditors, we want to see documentation.

We want to see explanation rationales for the decisions that are being made, especially when fines are being reduced by, in some cases, 40% or more. You need to understand that rationale so that you can understand whether or not Cal OSHA employees are following policy, or if there's some fundamental misunderstanding of how the fine calculation process works.

And I think, throughout our audit, what we found was Cal OSHA and their staff just aren't doing as great of a job as they need to be doing, to be able to justify these reductions that we're seeing.

We walked you through an example where you had a person who was killed in a forklift accident, and the Cal OSHA employee is calling it a general fine with a $2,000 baseline amount. And when we do our calculation, our baseline amount is $18,000 because we're calling it a serious accident that has a fatality.

And so, I think there's a—there's an element of training that's required; there's an element of documentation to explain the rationale, so that when managers are looking through the case files, they're in a better position to understand what decisions are being made.

But, with respect to your question of what are other states doing, Nick, I don't know if we had additional information on that in the audit.

Yeah, so the main source that we found and relied on was that—that federal OSHA statistic you mentioned. And again, it—it basically shows that, in general, California does kind of set high fine amounts in law and regulation. That's what we kind of show in the report.

But in practice, the average fines are lower than in many other states. And as the State Auditor mentioned, we, we focused on two things in particular, which was setting higher fines initially, using the authority in law and regulations and then not reducing them without a really good reason.

Thank you for that. And the agency has to keep pace with the voters of California. We are passing policies every day to strengthen the protection of workers, their health and their safety on the job. The agency has to keep pace with that.

And to hear that we are levying these fines lower than the national average, which means we're collecting less on a national average, we would draw that conclusion is unacceptable. And it's a disservice to our working families.

It's a disservice to the voters of California who want to see a level playing field for businesses that are doing the right thing. And it undermines the ability for the state to have robust and vigorous on the ground enforcement to protect workers. Thank you for your evidence and testimony today.

And I look forward to the September updates that you will have in this review.

Thank you, Madam Chair. Assemblymember Karlra thank you.

Thank you, Mr. Chair. And thank you to all the chairs and the staff from JLOC and respected labor committees for all your hard work on this special. Thank you to Chair Ortega for forwarding this audit request, and to our Auditor and his team for a great report. A lot of really wonderful questions from colleagues.

I just want to do a little bit of follow-up on what was just being discussed regarding fines and penalties. Have the fines—the base or maximum fines—been set? How long have they been at the current level?

We don't have that information at our fingertips, but we can get back to you after this hearing if you'd like.

And do you know, are you aware of where the fines go, when a fine is paid, whether it goes back into enforcement, what have you?

Yeah, thank you for the question. I believe they go back to the General Fund, but we can, we can clarify that and get back to you.

Okay, because I think that's an important point when we're doing the investigations, to ensure that we're replenishing the investigative tools that will then lead, hopefully, to either better improvement in quality of the workplaces or more fines to further bolster investigative resources.

I think that if folks don't feel that there is actually going to be some kind of penalty that is somewhat commensurate to the conduct, there really isn't a disincentive for them to continue that conduct. You mentioned bankruptcies—absolving the debt of some of these employers.

I imagine that on the list of creditors in the bankruptcy, these fines or fees may not be primary creditors. Or how are they absolving themselves of this particular liability when they go through the bankruptcy process? Because a lot of times, folks will go through a bankruptcy process and reinvent themselves—and now they've just gotten away with not having to pay the fines.

Yeah, so in our appendix, when we're explaining the difference between the amounts assessed and the amounts collected, we explained that bankruptcies are one potential reason for the discrepancy—why the amounts imposed aren't collected in full. But our audit didn't get into a more granular analysis of what percentage was a result of bankruptcies versus other factors.

We consider that to be outside the scope of the audit.

And when there's negotiations and settlements that dramatically reduce the amount of the fines, that is a negotiation between the agency and the employer.

Yes.

Is the voice of the worker and the workers impacted, do they have a say in this reduction of fines or fees?

Yeah, thank you. I believe they're allowed to attend some of those conferences where they discuss the reductions. I'm not entirely sure, but we can figure that out and let you know.

So, they may be able to attend whatever portion of the public process—there's a hearing, what have you—but not, I'm presuming, not part of any negotiation that would agree to a reduction in the actual settlement.

Correct, to my understanding.

And the. I'll just, I'll leave it at that. I think that we'll do more follow up with other witnesses. Thank you so much.

Thank you, Senate Member Ransom.

Yes, thank you, Chair. And thank you to all of the chairs, and especially to Assemblymember Ortega, for your work in this very important area. And I think we're all kind of, you know, baffled about some of the gaps—such as information systems—and being able to find and track things.

But my question is, I'm going to start with trying to clarify when fines and things are being reduced.

It sounds like they're. Can you confirm—were you able to see any sort of, you know, "if this, then that"—any sort of consistency? Or was it pretty much based on relationships between the agency and the employee, employer, and conversations? Like, are there any systems existing that would at least give them, like, a formula for when it's appropriate to reduce fines?

Yeah, thank you for the question. So that was actually one of the—the issues we kind of found in the audit, was that there wasn't a lot of indication in a lot of the case files, really, why the reductions were happening. And the policies and procedures, I think, in that area are also in need of some clarity.

And so, for example, one thing we saw a lot was in the conferences they have, where they discuss—with the agency and the employer—discuss potential reductions. We would see documentation of what the reductions would be, but not why that was actually happening.

And in another example, we talked about in the report, the employer asserted—through emails, so we were able to see it in the case file—that multiple serious violations could threaten its ability to win contracts. But there was no kind of documentation from Cal OSHA about, well, was that a legitimate claim?

Is that a good reason to reduce the fine?

Okay. Did you find in your audit that the—the agency was acting more as a kind of an ally to the business? I guess I'm asking you, if you had to weigh the way they operate, do we find it to be more of an employee protection or a business-friendly agency?

Thank you for the question. I understand the frame of it. In all honesty, it's difficult for me to answer that. As an Auditor, I try to be as independent and objective as I can.

So, the lack of a rationale—the lack of explanations in the file about why they're making the decisions they're making—just makes it difficult for me to say that they're pro-employer or pro-employee.

I understand that. Thank you for that. And then, with the recommendations of their consultant—I know that you didn't do the, I guess, the—the same sort of in-depth analysis of how many employees they needed as the consultant, but... And we also recognize that there's a need for the industrial hygienist, but that's a lot of employees.

And so, in your analysis, is it more—and hopefully you can answer this question—is it that we need that many more employees, or do we, would it be equally or more beneficial to follow the policies? Because what I got from your audit is there are some policies that just weren't followed.

So, it's—the policies weren't followed regardless of how many employees you have. So, I'm wondering if we truly need that many employees, or if you can, you know, kind of hone in on that.

Yeah, I think to answer that question, it gets back to the comment I made earlier about the three-legged stool to solve the problem here. It's partly a staffing issue, partly a policy issue—where people understand what's expected of them.

And then it's a monitoring issue, where Cal OSHA currently isn't in the strongest of positions to know whether or not its employees are following policies that are—hopefully—understood and up to date. And the workload analysis that Cal OSHA's consultant did, I will say, focused heavily on hiring more industrial hygienists.

I don't have the exact figure in my mind, but I think Cal OSHA had something around 8, and the consultant was recommending that they have over 200 more. And so, the vast majority of the new hires that the consultant was recommending was in the industrial hygienist classification.

Thank you. And then, for my final question, I believe that one of the concerns or rationales they gave for not being able to fill the positions is lack of qualified folks, you know, for that position.

And I'm wondering if you can speak to whether that—in your opinion, this is clearly an opinion question—if that's overstated. Is this not a position that you could really put emphasis on, you know, training or having an internal certification program? What...

Why are—in your opinion—is it so hard to find a qualified person to, you know, follow up on some standards?

Yeah, thank you for the question. So, this isn't something that we looked into very deeply, but we did have conversations with the agency. And one thing that we heard in this area is that—especially for the industrial hygienists—it's just hard in the pipeline to bring in enough folks with those qualifications.

And when we talked to Cal OSHA and DIR about this, I think they recognize this and maybe, were telling us that the qualifications may not, in every case, be necessary. So, thinking about changes that could help improve the pipeline there.

Okay, thank you. Appreciate your help.

Thank you for that. I would ask Mr. Parks, Mr. Versace to remain there. I'm going to bring up the Department for their response and comments. And joining us here is Director Jennifer Osborne from the Department of Industrial Relations, and also Deborah Lee, who's the Chief of the Division of Occupational Safety and Health.

So, Director Osborne, Ms. Lee, please join us. And the floor is yours whenever you are ready. If you could keep it to 10 minutes, that would be great—but we will obviously not cut you off if you need more time. So, thank you very much for being here.

Thank you. Good morning, Chairs and Members. My name is Jennifer Osborne, and I am the newly appointed Director of the Department of Industrial Relations. I've interacted with some of you in my previous roles in state government, and I look forward to working with you in this new position.

VAR and its divisions and boards administer vast programs and services that are essential to worker health and safety, and I'm excited to lead and support this team. I'm now in my third week at the Department, and I continue to be impressed by the employees who work tirelessly every single day to safeguard and improve working conditions for Californians.

The Department has implemented a number of strategies to improve outcomes, including many that have led to reduction of vacancy rates across the Department. But, as the audit points out, there's still more to do. I've worked for over 27 years in the various business operations of state government—finance, human resources, contracting, facilities, procurement.

The DIR team is comprised of experts in worker health and safety, labor law enforcement, workers' compensation, apprenticeship standards, and research. My goal is to ensure they have the tools and the support they need to be successful.

I'm committed to continuing the projects in motion, including several technology upgrades; increasing outreach to employers and workers; revamping our website to be more user-friendly; and improving our services.

This work also includes supporting DIR's continued implementation of recommendations made by the State Auditor, who audited both the Division of Labor Standards Enforcement and the Division of Occupational Safety and Health at Cal OSHA.

I want to thank the State Auditor and Members of the committees before us today for giving us the opportunity to share our strategies to implement the findings and recommendations.

My colleague Deborah Lee is here to go into more detail on the specific audit findings, and we have other team members here to answer questions that may come up—if they're outside of that range—and I'm also available for questions. Thank you.

Thank you. Good morning, Chair, Vice Chair, and Members. I am Deborah Lee, Chief of Cal OSHA. To begin, I would like to thank the State Auditors and their team for their diligent work. I acknowledge the audit's findings and their recommendations, which make it clear and certain that improvement are needed at Cal OSHA.

I would also like to thank my team who participated in the audit and are working with me to implement our action plan to address the audit’s recommendations. Thank you for giving me the opportunity to share how we are addressing the recommendations and the various strategies in place to overcome the operational challenges.

I became Chief of Cal OSHA in June of 2024. But my career with Cal OSHA started three decades ago, back in 1994, when I joined as an industrial hygienist in the Enforcement Branch. Since then, I have moved up the ranks.

Most recently, I was the Deputy Chief of Enforcement, and I am now honored to serve in this Administration as Chief of Cal OSHA. Through my years of service, I have seen how Cal OSHA has evolved over time—and how it was stretched during the COVID-19 pandemic to meet the needs of California workers and employers.

I have many ideas to make Cal OSHA more effective and more efficient. My priority is to improve the lives of California workers and empower employers—excuse me—to provide a safe workplace. In fact, under my leadership, Cal OSHA was already working to fix issues identified by the State Auditors.

I have dedicated 30 years of my life—and more—to protecting workers and enforcing Title 8 rules and regulations. In advance of this hearing, we have provided you with two documents that summarize what Cal OSHA is doing to address the audit findings and recommendations. I also have copies here if anyone needs one.

There is a two-page summary sheet, as well as a booklet that has more details—including our action plan in response to each of the Auditor's recommendations. I would like to briefly share with you the work Cal OSHA has been doing in response to the common threats or things, and the audit findings.

First, I would like to start off with staffing. For the past several years, we have implemented an aggressive hiring and recruitment strategy with the support of our Department, DIR. Today, Cal OSHA’s vacancy rate is at 12%. The reduction in the vacancy rate is a result of two major things.

First, in full transparency—which has been mentioned—this includes the elimination of 66 vacant positions as part of the statewide budget reduction. And secondly, the reduction in our vacancy rate is due to Cal OSHA’s aggressive hiring efforts. The Division has hired 126 individuals in just the first half of this year.

We have been able to achieve these levels of hiring in part because we established a dedicated Recruitment and Retention Unit. This unit is focused on hiring staff for our Enforcement Team. The team attends dozens of career fairs and other public events across California to inform Californians about careers available at Cal OSHA.

They are also working to get more people in the pipeline by reaching out to schools and universities to inspire students to enter into occupational safety and health careers with Cal OSHA.

Additionally, we are working to address other barriers to hiring and retaining staff, such as working with CALHR to assess whether any adjustments are needed to certain classifications—in particular, our field classification and their compensation levels. I'd like to move to policy and procedures.

Some of the State Auditor’s findings focused on Cal OSHA’s policies and procedures that need updating. Cal OSHA has over 100 policies and procedures, and they are important because they govern how the Enforcement Branch does its work. In 2024, Cal OSHA hired its first-ever policy writer—when I became Chief that year.

Since then, Cal OSHA has been reviewing all of its policies and procedures to make sure they are up to date and effective in supporting our mission. I am pleased to report that this month we are finalizing updates to seven policies and procedures, and we believe these revisions will address many of the Auditor's findings and recommendations.

Our goal is to finalize these policies and procedures and begin training our staff on the revisions in September. I have issued a memo to Cal OSHA staff to inform them that the policies are being updated and that training is forthcoming.

In addition to training, we will be conducting periodic internal audits of individual inspections to ensure staff understand and are following the revisions set forth in the policies and procedures. From here, I'd like to move briefly to the letter investigations. One of our policies and procedures is solely focused on off-site letter investigations.

The letter inspections are reserved for non-serious hazards, or what we refer to as non-formal complaints under the Labor Code. These are hazards that are not likely to cause a serious injury or fatality.

We agree with the State Auditor that having clear instructions to staff is important to ensure the letters are only used for non-serious hazards. We have also implemented additional controls to ensure that management is reviewing actions and decisions made with respect to complaints. From here, I'd like to briefly move into our data management system.

In addition to increased training and internal audits of inspections, we are midstream of Cal OSHA’s largest IT project to date: the creation of Cal OSHA’s own data management system. As the Auditor pointed out, Cal OSHA largely does its investigations through paperwork and paper files.

I agree with the auditors that it is high time Cal OSHA modernize and utilize technology to become more efficient and effective. Presently, Cal OSHA is developing the detailed specifications for how the new data management system will function.

One benefit of the new system will be that automate rules—will require adherence, to our policies and procedures—and prevent inspectors from moving forward without obtaining the necessary approval to close a case. After building and testing the system, we anticipate this new system will go live in late 2026 or beginning of 2027.

Cal OSHA has 20 million workers. We receive approximately 12,000 complaints every year from all over the state. Even though we have 32 Cal OSHA offices, we know that our reach—of these workers and employers—has to go beyond conducting inspections in response to complaints.

We are increasing our proactive inspections in high-hazard industries, such as agriculture, as well as working hard to prevent serious injury and fatalities. One way we do this is through our Consultation Unit. This unit provides free compliance assistance to employers on new and existing laws and regulations. We also have the Alliance Program.

This program allows Cal OSHA, employers, and community-based organizations, and faith-based groups to enter into an agreement to collaborate on strategies to serve certain communities or industries. Through outreach, and particularly our work with the California Workplace Outreach Project, we have been able to reach workers where they are—through trusted messengers.

Today I'd like to thank you for the opportunity to share these opening remarks, and I would like to join—have two of my colleagues join me—and that would be David Wesley, the Deputy Chief of Cal OSHA Enforcement, and Andrew Colada, who's with our Department Chief of Administration, to assist in responding to any questions you may have.

Thank you.

Thank you, Director Osborne. Thank you, Ms. Lee. I'm going to kick it over to my Vice Chair to start with the questions. Appreciate you being here and look forward to the responses from you and your team.

Mr. Vice Chair, thank you very much.

And I apologize, because I have to leave in a few minutes, but I wanted to just give you the chance to address the issue of vacancies and the number of filled positions, and where you are with regard to the number of positions, and maybe get a comment from you on how hard it is to recruit, and what might be of assistance in being able to successfully fill your vacancies.

Thank you for the opportunity. So, we have been working very diligently with our vacancy rates. As I stated in my opening here, we have created a retention and recruitment unit within the Enforcement Branch. We kicked that off, I believe, in 2024, towards the end, when we built the unit.

That team has been aggressively going out, as I stated, to schools, to universities, and job fairs, and sharing and identifying our vacancies to respond. Our current vacancy, as I stated, was at 12%, and I'm going to pass that to Andrew Collada to go into some details about our vacancy rate.

And Mr. Collada, if you can just sort of work into that—the net effect of the sweep of positions, going from a vacancy rate of 32% to 12%. How much of that was a sweep of positions, and how much of that is filling vacant positions?

Thank you again. My name is Andrew Kalad. I'm the Chief of Administration here at DIR, and in my position, I oversee the Personnel Office, Human Resources Office within DIR. Just piggybacking off of what Chief Lee said—one of our issues with recruitment and hiring within DOSH is the specification.

The class specification serves as the basis for duty statements and establishes minimum qualifications for appointment to positions within the Department of DOSH. That classification is several decades old; it hasn't been updated. We think that that may be a factor in recruiting within the Enforcement Division within DOSH.

Specifically, we think the minimum qualifications may artificially affect appointment of people into the classification, due to the education and experience requirements. To address that issue, we have actually entered into a contract with a consultant to do a specification class study.

Could you tell me how that fits into the overall thing? Is it that you think you have vacancies because that's not updated, or you're hiring people into that with a not updated thing?

I'm still sort of stuck on what the rate is, and what lowered it, and what your obstacles are or aren't, and I'm not sure how that fits in.

So, one of the obstacles is the classification specification. We think it may be limiting the candidate pool who could be appointed to the position. I think, just to piggyback off some of the comments that Chief Lee made, we are actually made some structural changes to our hiring processes.

We actually have a—a more robust outreach effort to communities. We've developed partnerships with colleges and community outreach groups. We have a more robust presence on online media, particularly LinkedIn. We also offer training to candidates on how to fill a state application and to do statement of qualifications, which are necessary to get interviews. We also...

And so, are you basically stating that doing all this work is the reason you've been able to fill some of the positions?

Oh—absolutely.

And then you said that there's an issue of getting the classification updated.

Unfortunately, as a former state administrator, I have lots of experience with human resources, and they are not lightning fast in those processes. And how long will it take you to do that, and really try to accomplish that?

So, there are several steps in the process. We engaged with the consultant about two months ago. They are in the data collection phase of the study. We expect to have a report and a revised draft specification to us at the start of the year. We have been working with CalHR to develop package for presentation to SPB.

And we also will be consulting with.

I want to give my colleagues a chance to ask a question, but I'm determined to drill down on this. So, you're taking two months and then four more months to get a report. Then, how long will it take CALHR to accomplish a change that matches what a recommendation is in the report?

So we're hoping it'll be in the first quarter of next year.

Okay, thank you. I've probably given enough fodder here that some people will ask follow-up questions. I apologize that I have to leave.

Thank you, Mr. Vice Chair. Thank you for being here and for your leadership here. Chairwoman Ortega.

Thank you for that report and update. I appreciate the work, and you know, I want to start by acknowledging the staff you do have and the work that they are trying to accomplish.

However, you know, with this audit coming out—confirming a lot of the concerns that I had during the last hearing where we first met—and I had farm workers tell story after story about how Cal OSHA was failing them.

So, I want to start with a basic question, which I think one of my colleagues was alluding to earlier. And that is: who do you work for—either Director?

When you say that, are you referring to the question about the—employees versus the businesses?

Yeah. So, who do you work? What is the purpose of your department? Who do you work for? Who do you, who are you here for?

We are here to protect employees. You're here—and to level the playing field for businesses who comply with the law. And I will let Deborah comment on that further, correctly.

Our mission, our goal—and we work for—we work for the people of California. That includes employers, and that include workers. That includes, as I said, the people of California.

We are here, and our establishment is to educate employers—as I stated in my opening—to empower them to provide a safe workplace, to educate them on new rules and regulations as they come out, so that they can be able to provide such a work area. We are also here to enforce the Title 8 rules and regulations.

We are here to develop new rules and regulations, as our staff goes out and identifies hazards that may have not been identified—such as COVID-19. And we rolled out with new rules and regulations. We are here for the workers, and we are here for the employers.

And we are here to make it safe for workers and employers.

Okay, well, let me read. There's a submarine here that says DIR is tasked with protecting and improving the health and safety of California's nearly 20 million workers by enforcing the workplace protection state law—requires employers to provide. And I think what you just outlined, this level playing field here—I don't see that here.

I thought your role responsibility was to ensure the health and safety of workers. I think that's one thing that we haven't really talked about today that really stood out to me in this audit, is the fact that for quite a bit of time we've really focused on the staffing issue.

What I really hope my colleagues and the public understand is the severity of Cal OSHA's failure to protect workers, and that this issue goes far beyond staffing. Employers who put workers in danger are not being held accountable.

I started this hearing with an example in my district, where I have three workers—three—who have died in the last eight years without any criminal, criminal prosecution of any kind. You, in your opening statement, I heard a lot about the data modernization project, as if it's going to solve every issue.

But this project will have no impact on some of the biggest, most concerning things that I found in this audit. So, I want to start with some other questions. Let's talk about these letters. What is the process of these letters? And... the audit said he couldn't find rationale. You're using them 80% of the time.

You're asking employers to, you know, report on themselves—to self-police themselves. So, what is... how do you determine who gets a letter? How do you determine what the fines are? What happens after the employer gets 12 or three letters, and they do nothing?

Thank you for the question. And David, you're going to.

Yeah, thank you, Chairman. I'm David Wesley. I am the Deputy Chief for Cal OSHA Enforcement. Let me just start by saying—the letter process is something that is used by us. It's also used by Fed OSHA and other states as a way for us to leverage our resources to get employers to actually respond.

When we can't go out on an on-site inspection—when we receive complaints, and we receive over 12,000 complaints a year—we have to identify what the hazard level is on those complaints. If it's... there's basically three levels, we have...

Where they're imminent—where clearly there's a worker who is in a position of possible death or serious injury unless a change is made immediately. We use as examples, for instance, an unshored trench.

If we have a worker in an unshored trench, we send somebody out immediately to get the workers out of the trench and stop the work until it gets fixed. So, that's the first level. The next level is if it's a serious violation—for instance, there could be, like, a machine that's not guarded.

We can take a look at that and say, you know, it may not be imminent—there may not be anybody working around it at the moment—but it's a serious level. So, we are revising our policies and procedures to make sure that all serious complaints will result in an on-site inspection.

That wasn't always the case in terms of our policy and procedures. We're making sure that that gets clarified and updated. Then, the next level would be other-than-serious types of complaints, and those we get a little more granular. We actually use some of the requirements in the Labor Code.

We also have directives from Fed OSHA that we have to kind of take a look at and adhere to. But for those types of complaints—and some of them can be as simple as a record-keeping type of complaints, complaint...

But for those types of complaints, then we look at whether it is a—an employee or an employee's representative—that has made the complaint. If that's the case, then we will do an on-site inspection.

We don't have to get out there as quickly as we do for the serious ones, but we do an on-site inspection for the other ones, we will now defer to the letter investigation. So, we are taking the audit findings very seriously.

We certainly agree that the workers in the State of California deserve to have the best coverage they can get. So, we are limiting the amount of letter investigations—not the amount, but the status of the letter investigations—to make sure that the, the serious violations are addressed with on-site inspections.

We are in the process of—or have updated—some of our policies and procedures. We will be soon training our managers on those procedures, and then there will be follow-up internal audits from our own division to address the effectiveness of those, of those changes.

Sorry, thank you for that. I'm still not quite clear—like, who's the decision maker? When one decides what is a serious case that requires one versus two letters, like the different levels—who is that going to be, and what is that process?

So, as David just stated here, we, first of all, are going to incorporate the recommendations that have been made by the audit team—which is that when a complaint comes in, it will be evaluated by the severity and the surrounding facts to the letter. And so, we will be focusing in on...

There are basically three categories, and the three categories that are in the Labor Code are: imminent hazard—which is something that's life-threatening, to which we will be rolling out on. And if it's something that is of a serious nature, like a guard or a table saw without a guard.

Those are things that we'd be rolling out on—and also mandated and outlined in the Labor Code. And then, the third one is those that are non-serious nature.

And so, when these complaints come in, it is the responsibility of the district manager to evaluate those complaints and make that determination if there's going to be an on-site inspection or not.

And so, the recommendations that have been made by the auditors is that, one: initially, if it's going to be decided that an on-site letter is going to be evaluated, it would need to be documented—and the rationale for doing so.

However, if it is indeed an imminent hazard or a serious hazard, our team will be rolling out on those. And so, that will be made clear in our policy—as I said, incorporating what the auditors have recommended. In the event that a letter will be generated, it would be something that is of a non-serious nature.

It would be something—if I were to give an example—like a record keeping. Possibly. But, once again, we would need to have our people evaluate what surrounds the complaint itself: the severity and the facts with it. If a letter is decided, we're taking the recommendations that a call would be made first.

A call would be made.

A call would be made to the employer in regards to the complaint allegations. From there, the complainant definitely would be notified of what processes have been taken in regards to their complaint—provided that the name and information, so we can contact the person.

If the employer does not respond to our complaints, the policy will read that this is something that we would have to follow up on—and staff will have to roll out on.

Got it. Thank you for that. I mean, you know, given your staffing shortages—you know, I appreciate some effort being put into these letters. I personally would like the whole process to stop sending these letters that have not resulted in much. So, I will definitely be keeping an eye on this.

I'll move on to my second question, which is the lack of criminal referrals to public prosecutors. What is your process there? When do you decide that it's time to hold an employer accountable? Is it after the first death? Is it after the second death? Is it after the third death?

Thank you for the question. If I can just have a moment.

Sorry. Thank you. I wanted to check so I can give you the right labor codes that cover and governs our procedures with our BOI Unit. So Labor Code Section 6315 establishes the Bureau of Investigation, which we refer to as the BOI Unit, and it set up the framework for investigation.

So our BOI is thereby tasked with investigating fatalities and serious injuries that result from a serious violation of Title 8 for criminal investigation. Labor Code Section 6423 and 6425 and 6426 are also of the authority--gives us the authority for our BOI to use and make criminal referrals to prosecutors.

The most common referral vehicle is Labor Code Section 6425 for willful violation of a standard causing death or serious injury to an employee. Violation of the Labor Code Section 6425 are charges as felonies. So our BOI Unit, in accordance with these labor codes and regulations, this is what governs and what identifies what would be referred over to for a criminal investigation.

Sorry, I don't have those codes memorized, nor did I have them when I met with the widow who showed me the video of her husband being crushed after two other workers were killed, so I'm going to ask another question. How much would it cost for a DA to prosecute one of these cases?

I don't believe we have that information. That'd have to come from the DA.

Well, I really suggest you ask the DA because I am going to be looking into your budget, and given your staffing concerns, it's clear that you currently don't have the capacity to increase referrals for criminal prosecution. So I will be looking into legislation that ensures employers are held accountable.

I don't know which code it's going to fall under, but I do know Paola's face. I do know these workers and their families. I do know the face of this eight-year-old little girl who lost her life and could have been--whose, whose dad lost her, his life--and could have been prevented.

I mean, I don't think my question was very difficult. When is an employer going to be held accountable for the death of employees in the workplace? Is it after the first death? After the second death? After the third death? And right now, what I'm seeing is that very few cases, 1%, 1.7%, were referred for criminal prosecution.

So I'm going to introduce legislation because I don't want this hearing, this audit, to just be about the problems. We need to come up with solutions and address a lot of the concerns we've heard, and I want to see actual accountability, because again, going back to your role and responsibilities to the 20 million workers of the state is to enforce the health and safety of workers, and every worker in the state should have the right to go home at the end of the day

My last question is around the fines. So if a worker is lucky enough to go through the process after letters are sent and, you know, their case is made, who has the authority to reduce these fines? What is the process?

There's--in terms of reduction of penalties, the district manager--or I should say the employer--before they make an appeal, the employer can work with the district manager and provide evidence to reduce some of the penalty calculations.

After the appeal process, then, you know, it's up to the Appeals Board and working with the board, and the Appeals Board typically will, you know, require, you know, pre-hearing talks and they try to guide us through that. But that's...

So the fines are set in our Title 8 regulations, and so these are--identify the base level of each classification of a citation. So a citation can start off as a serious, general, or a regulatory, and so within the Title 8 rules and regulations, it identifies what--where the penalty will start, and I think this is something that the auditors did go into in their report.

From there, within the district office, we do have things where, what we call informal conferences. There's also the employer has the right to appeal citations under that right to appeal. It gives the division and the Appeals Board the ability to meet with the employer, have a discussion on the penalties, but the penalties initially are set by Title 8.

So Title 8 decides that when the grand total of fines is $18,000, that gets reduced? I don't, I don't quite understand.

So it outlines step-by-step where you would be able to make certain reductions. So it would say that a series starts off at 18,000 and then there are other adjustment factors that allows the division to look at and to consider. So from that 18,000, there are other mitigating areas that the Title 8 allows you to consider to reduce the penalty by 25% or to increase the penalty by 25%.

It also allows you to look at the size of the employer and it outlines if it's a small employer, what type of reduction the person can--I mean, the employer--can receive. It talks about the history of--the OSHA history of the employer, and it also talks about the good faith of the employer, and these are all outlined in Title 8 to which staff would follow those requirements.

So the employer--I heard employer, employer, employer a lot in that statement--didn't hear a worker a whole lot. So I'm just trying to--I still haven't quite figured out how, you know, in the case--again, I'm going to go back to the case of the incident in my district where after the investigation and the three deaths, it was $18,000 in fines, and so that averaged out to $6,000 per employee killed. Is that in--so you're telling me that's all in Title 8?

I'm saying that Title 8 outlines the base, the gravity base of the penalty, and that's written into--and that's, those are the regulations that we would have to follow.

So where do the workers fall in Title 8? When do they have a say in how much their father, son, friend is worth?

You can't put a price on the life, and--

But we are. We're putting a price on their lives. So where, where does the worker have a say or the family members in this process?

It's not outlined in Title 8.

So where is it?

Those are the rules--I mean, those are the laws that Cal/OSHA have to follow in dealing with the penalties, with the gravity base, and I do believe the auditors did identify that in their audit.

So where is--yeah, to the auditors, please. Can you talk a little bit more about the fines and what you didn't find?

So one of the things that we didn't find--you were asking about referrals to prosecution--what we didn't find was Cal/OSHA having policies that describe when to refer or when not to refer cases. I understand that, you know, we can cite code, but as auditors, we wanted to understand what were the actual policies and practices Cal/OSHA developed for its staff.

They didn't have any for when to refer cases for prosecution, and we have a graphic in our audit report on page 43, figure 13, where we describe a case where Cal/OSHA felt like it had enough evidence to fine an employer $78,000 but didn't have enough evidence to refer that case for prosecution, and so when we spoke with staff that would be responsible for that, they indicated that they were in the process of developing policies that would clarify when they would refer cases for prosecution versus when they would not.

So we don't have the policies in place?

The policies are being developed and I do believe we provided the outline as the deadline. We have guidelines in place within our BOI investigation. As the audit stated, it is not spelled out in a policy and that is something that we are developing and that we will have by the end of this month.

So I mean, that's--on the issue of the fine--I'm going to move on from the criminal prosecution. On the issue of the fines, this audit said that Cal/OSHA doesn't have policies nor do staff to justify why they reduce the fines, and I still haven't heard that. I've just heard codes reference. So what is the justification for reducing these fines?

Thank you. Thank you for your question, Chairwoman. We agree with the auditor's findings that we are not capturing that, that information, that reason for the reduction. Oftentimes the information we are capturing are the bits of the Title 8 that allow certain changes, so those will be referenced but not the reason why those changes were made.

So that's something that's going into our policies and procedures. This will be something that we train on and something that we do follow up audits with our staff to verify that, that that's being incorporated.

Yeah, maybe, maybe my colleagues and I should look into creating that policy for you. That's all. Thank you.

Thank you, Madam Chair. Chairwoman Smallwood-Cuevas.

Thank you, Mr. Chair, and yeah, I think there are a number of bills and policies we need to consider in this process, one being that when a life is lost on the job due to employer negligence, there's some oversight in how those penalties get adjusted and we should not be lowering the value of human life in California workplaces.

And I have a question in terms of, I think, that my colleague from the Assembly was getting at the role of workers in this process. What process does the public have or workers who feel that the department failed them, failed their loved ones who were killed on the job? What process do they have to challenge rate, evaluate the performance of Cal/OSHA?

I ask this question because given the evidence that was presented today, we're talking decades of barriers to quality enforcement and decades of negligence as it really relates to ensuring that workers' rights are protected, employers are held accountable, and the State of California laws are being properly enforced. Is there a--what is the appeals process?

What is the way--is there liability exposure for the agency as it relates to workers and family members who have been impacted by some of the evidence that was shared with us today in terms of policies, procedures, duties, responsibilities that have been not performed well?

Thank you for the question, and I think this is something that the division is going to have to look into and to develop. Now when citations are issued, those that are impacted by it are entitled to participate in the informal and to be notified of the informal conference, to be notified of any pre-hearing conferences, and also to be notified of the actual hearing, if it makes it all the way to a hearing.

And to be aware of those and to participate in them is what is offered--I mean--what is there now when we issue citations. They are to be notified of all of those actions all the way up to the hearing.

Yeah, I think that's a, that's another piece of policy we need to look at moving forward because should--had there been a process for the public to engage in this, we might not be looking at this in a rear view and seeing the ways in which we haven't met the goals and expectations of how the people of California would want to see their workplace safety and health laws enforced. So I agree there is a role for the public to pay in ensuring that the agency is properly--has proper oversight in how these cases are handled.

I want to move to a number of questions that I have and I want to go back to the letters, because essentially, because the majority of these complaints, investigations are dealt with through a letter that essentially says to the employer, 'this is the problem,' and all the employer has to do is say, 'I've taken care of it' and nothing happens, we've got to understand how we are responding to the complaints and what is the mechanism to sort of have a backstop and check on not only that the complaints are going out and what they are but also verifying what the employer is saying in those letters to ensure that the corrections, the necessary steps have been followed.

What is the mechanism that you have in place to, one, address how these letters fit into the enforcement process, but also how does it trigger on-site enforcement, how will it trigger some sense of verification, and then how does it come back to the state in terms of closing out whether or not these--the investigation continues and can be brought to a suitable and adequate summation in terms of what fines of penalties, what citations are levied, what support there needs to be for, for the worker?

Well, thank you for the question. With regard to the letter investigations--

There is—we have requirements and have had requirements in place for review of responses. We have, we have oversight of—management oversight, excuse me—of all of these processes. It's not easy for us to track all of these issues. Our data management system that we're trying to put in place will help us immensely in doing that.

Part of what we're finding as we look at the way we do business is structurally, we have a lot of work that's being done in the district office and we need to take a look at whether our structure, our organizational structure, is adequate for handling the letter investigations, in the same office that is handling the on-site inspections.

There is a tendency to have priority over the onsite inspections and we just need to address with our managers that they continue to follow all the policies and procedures regarding the letter investigations.

When done correctly and effectively, we have the responses to the letter investigations should be reviewed. And if they're not adequate, we continue to work with the employer until we can determine that they are adequate. And if we're not seeing what we expect to see, then we can go out for an on-site inspection.

If we get no response at all, we should go out on an onsite inspection and then we should also periodically go do onsite inspections to verify that the ones that we previously approved are, in fact, adequately implemented.

So, those are the things that we recognize we're not doing well and need to continue to train and to audit and if necessary, to change our organizational structure so that we can implement these things well.

And I want to say—oh, I'm sorry, go ahead.

I was going to add to one of the things that the auditors did point out that we're also incorporating is what is satisfactory, what is acceptable.

And so, when the responses are coming back to us from employers, they would need to vet video, photographs, reports, so we can actually see that what was sent out as a concern has truly been abated.

And then, as David was just mentioning, we would do some randomly selecting some of those satisfactory complaints and ask people, have our team go out and conduct an investigation to verify what they said they actually installed, they actually did.

Also, for our on-site inspections, the other recommendation too was also identifying that when our teams are out there, what is key, that the audit has pointed out, is that we need to collect the evidence so that we're able to move forward on and upheld the citations and also, to upheld citations that are serious and also accident related.

And so, we're going to be having people go out in the audit form to look to see what our inspectors are also doing out in the field and verifying that they have, indeed, identified the hazards that were there.

And so, that would be another form of some auditing that has been recommended, that we are also looking at incorporating.

And I appreciate that process being put in place, and we will be a check and balance on whether that is effective or not as these audits will be done by this—by the Auditor and also by your agency.

But I will say in LA County, when we look at and I'm going to use wage theft as an example, and I think we have a similar model with our Labor Commissioner's Office where we have some of the same challenges in terms of enforcement and outcomes. You know, we need more boots on the ground.

We can't hire enough investigators to police every single work site and to make sure that people's health and safety is being upheld without, without enlisting the support of the workers themselves, without enlisting worker organizations, without deputizing trained, experienced individuals who can assist in making sure and verifying these conditions.

Workers want to work in a safe environment, and they know what safe means, and they know when they're unsafe. And so, how do we make sure that we are working and expanding our partnerships to put more boots on the ground to make this happen? It is important to have procedures that work.

It is important to have policies, especially when we're investing so much in this agency to be able to do its job.

But at the same time, it's the responsibility of this agency to have adequate boots on the grounds and relationships of organizations that can help to support and part of that effort has to be to empower the workers themselves to be—to participate—in this process.

And I don't know what your, in addition to the internal oversight steps, but the relevant increase in capacity is important. Is there—what are you doing to expand the networks of verifiers who understand the policies, who understand the protector—protections—and also understand their sectors very well. What is the—what are you doing to partner with them on this? We can't hear you, so sorry.

We are working with community-based organizations to educate them on rules and regulations as they relate to Cal Osha. We're setting up relationship buildings meetings and workshops directly with our enforcement team.

We've worked with SoCal Osha and other organizations in meeting and discussing and the goal there is that they bring others to those meetings, so they get to know our enforcement team.

From there, we educate them on ways of filing complaints, of understanding employees' rights, and we help educate employees on those rights and, and pretty much encourage them to file complaints with us about unsafe work conditions so that we can respond to those, out of fear of retaliation, we explain all of that, what all of that means as well.

But most importantly, by working with these CBOs and community-based groups, they're able to file complaints on behalf and give us more information so we know where to go. We are engaged in doing a lot of proactive type of inspections.

And they're able to assist us in giving us directions and areas into where we need to look into. But most importantly, they're also able to help us communicate with workers.

And I, and I appreciate the CBOs and I appreciate that network. I just want to still point out that the workers themselves are critical to this, and this isn't about the fact that we need—that we support eliminating positions.

We're not saying that this is an issue of replacing those workers who are within the agency, but it's about building a bigger us, a bigger us to be on the ground, and who really know and have intimate knowledge of these conditions. I want to move on to my next question.

And this was an area in the audit that just highlighted invalid complaints, invalid complaints. And what was deemed invalid complaints were workers who were experiencing some harm on the job, who thought it was a health and safety issue, but, in fact, maybe it was a civil rights issue or maybe it was a wage issue.

And it was unclear what the steps are for those kinds of complaint, so, I think the audit said something like there were, you know, there were instances where the allegations were just unclear, where it seemed like maybe the employee was being harassed and this is by your investigators, but unclear what happens to those complaints.

And it sort of from the audit seemed as if nothing would happen. So, my question is, is there any follow up for those kinds of complaints? What kind of cross agency collaboration do you have? Do you refer complaints of harassment?

Particularly, if I'm injured on the job and then my employer retaliates against me, then that's a different kind of violation. Where, you know, where do you engage with, for example, the Labor Commissioner's Office, and can you explain a little bit more about that?

When we receive complaints of that nature or other agencies, we do referrals over to those agencies like LCO. We would refer those. Our team will take down the information and then do a formal referral over to LCO.

One of the things that we're also doing with automation project that we're working on that would have a portal where complaints of that nature will be sent over to our sister agency. We do also work together with our sister agency. We may collaborate and do joint inspections of that nature as well.

If we're out in the field and we get information like that, our team also does referrals over. We're currently working together to better network sister agencies. We do also what we call pop up clinics along with our sister agencies and take complaints and things of that nature.

But we do refer and send the information over to our sister agency and we're working on a way that we can both share information so that we can better inform workers on what's happening with their complaints, be it that it's a Cal OSHA complaint or LCO complaint.

I think those rigorous collaborations are important because in my experience, if you have an employer that's violating health and safety laws, they likely are also violating wage and hour laws, civil rights laws, in the workplace, so that cross collaboration is really important.

I think thinking about a fine rubric that helps to be able to assess the various ways that workers are impacted is critically important. Again, going back to this question of why are we bringing in less in our penalties and fines than other, other states? Why, why are our fines so low?

This is another way, again, you get folks to pay attention when they're hit in the pocket and that is how we need to make sure that we are using all that we can to assess fines and penalties and to do it in a collaborative way so that we can really isolate bad actors and make sure that they are held accountable.

My next—and I have many questions, but my, and I will hopefully we'll get through them—but my next question has to do with CalHR, and it seems there are some problems in the hiring process and that there simply also are not enough positions that that's part of what the audit is telling us.

I think there was mentioned, some—I wanted you to clarify your statement about what CalHR is doing to assist in this process.

I know when we had our audit around some of our wage enforcement work and we were able, this Legislature, to expedite emergency hiring, that CalHR and hiring process took so long that the—almost the emergency order was nearly up by the time we fully brought those hires online. What is the process that CalHR is doing?

How are you—how is CalHR working with the agency to address these hiring needs and what are the benchmarks that are being put in place to make sure that we are bringing, particularly on the industrial hygienic side of the table, that we are accelerating those frontline inspectors?

Thank you for the question. So, CalHR is our conduit to State Personnel Board. So, they are helping us facilitate the updating of the specifications for the Safety Engineer Series. They are also conducting a study for industrial hygienists or scientists, including industrial hygienists, toxicologists, environmental scientists.

They initiated a contract with a vendor to do an audit, including the industrial hygienist. They are actually required, pursuant to a memorandum of understanding, to have that study released in December of 2026.

In our experience, CalHR has actually been a good partner with us in terms of the projects that we have going to update our specifications, address recruitment and retention issues with industrial hygienists, and some of the other issues that we're working on.

I do not have a timeline or benchmark for their study outside of we have been engaged with the Auditor, the private consultant that's auditing the Industrial Hygiene Classification, and we—and the due date for the report is to be released by CalHR.

I'm sorry, the due date is?

They are supposed to release the report December 31st, 2026.

Okay. All right. Well, you know, I know Ms. Lee, I was a part of knowing about your appointment in 2024 and your confirmation earlier this year. And certainly, these are deeply entrenched challenges that have existed far before you got here. But now, you are on the hook for making sure that they get addressed.

And I appreciated our conversation yesterday.

I want you to know that I will be deeply involved in staying in contact with you to ensure that these recommendations, the ones that are coming in September from you know, the updated look by our Auditor, but also the internal findings, and I hope, and I'm not sure if this is the process, but that they will be made available to our offices in real time so that we can continue to track.

These are—this is the agency where it is a matter of life and death and I think we have to treat it as such and looking forward to your implementation of the recommendations and all that you've laid out here, in terms of the steps that you are going to take to ensure that this agency moves the needle on these conditions and concerns and really protect the workers of California.

Thank you, Madam Chair. And just a time check. I know three of my colleagues still have questions for this panel. We still have our last panel. So, we will go to Assemblymember Kalra, then Senator Cortese, and Assemblymember Ransom. But I do want to get us out of here by 1:00 if we can.

So, thank you for everyone's attention.

Thank you, Mr. Chair, and thank you my colleagues for asking great questions. And to the Director in Chief. I know the Director just joined three weeks ago, the Chief just last year, and that's part of the issue is that there's a lot of turnover in those positions and it's hard to actually have transformational change.

I do appreciate Chief Lee coming in within a matter—I mean, this is just like I think we're basically 14 months into your role and coming in and recognizing hiring was a major issue and getting that moving in January. I also do appreciate a recognition of the Auditor's conclusions and recommendations.

We don't always get that when we have these types of hearings. There's oftentimes more pushback. And I know that some of those recommendations are being worked on now.

I think it's quite clear that come January for those recommendations, particularly on the policy side that aren't, you know, when we have a chance to go look at them and aren't satisfied at the position we're in, there will be legislation, I think quite clearly, that will help to spur some of that.

And as it applies to CalHR, I think certainly, that's an area where I think you'll get support from folks to help push along when it comes to hiring and retention, which I think is a big issue. Oftentimes, there's hiring spurts and then dips because the retention is the big issue.

And so, ensuring that not only we can hire quality folks, especially on the front line, industrial hygienists and such, but can keep them for the long term.

And the—one follow up question on the letters and kind of following up on Chair Smallwood-Cuevas's point in terms of collaboration, I know that LA, I know in Santa Clara County, we have a very robust Office of Labor Enforcement.

When these letters are sent out, is there communication with either those offices or civil prosecutors, county councils, what have you, does that communication occur or just like at least sent over there and if not, can that be part of a new policy or considered as a new policy to send that information to local agencies that are doing similar work?

We're not sure if we're clear on your question, if you could.

Well, for example, Cal Osha and this is looking from the documentation, the info you provided us on page 16, upon receiving the letter, employer must do certain things, post a letter in the workplace, respond to Cal Osha. Well, if no one's going to the work site, how do we know they're posting that letter?

How do we know the workers are informed? And I know that, again, staffing issues, you can't have someone go to every site where a letter is supposed to be posted, but there are local county agencies that may have folks that can go on by and see if that's being complied with.

Is that something that, if not considered, would be something that could be considered in terms of creating that collaborative environment?

I think this, I think this is something that we could look into and circle back with you. We would need to.

I would appreciate that. I think that, again, we know that in many ways, when it comes to standing up for our workers, that we're outgunned in many ways. There are so many businesses and quite frankly, when you have businesses that violate the rights of workers, it's a disadvantage to responsible businesses, too.

So, this is not just obviously about the workers, but it's also about making sure we have a competitive playing field for those responsible employers that are doing the right thing, that are ensuring they have a safe workplace environment.

So, I would appreciate some thoughts on working with those local, those county offices of labor enforcement, county councils, what have you, in order to, again, increase the army of folks that we potentially have of getting out into the community.

If it's a place that does have representation by, by a union, are they informed when there's a letter being sent out or a violation?

This is something else that we were thinking about also, so we can circle back to you on the union aspect.

I think that would be very helpful. Again, increasing the boots on the ground to ensure that not only letters are posted, but more importantly, corrective action is taken as the employer is ensuring when they do that response, so that if it's found not to be the case, then you can send someone there.

Because I get you can't send someone to every place you post letter, but you can if you get feedback that, hey, they're not doing what, the employer's, not actually doing, what they said they're doing, and that could be a trigger to actually then sending someone on the ground over there.

When it comes to—there were conversations about the fines and mention of Title 8, what have you, I understand that there are certain things that are in code, prior legislation, that you're somewhat bound by. I think that what policy would be helpful is putting criterion as to, okay, well, Title 8 allows this range of fines.

It allows for reduction of fines, what have you. I think quite clear criterion as to what discretion is given to your folks to actually agree to settlement amounts, to agree to reductions. And if it's—it seems like it's been very loose. That's what the, you know, the audit has indicated. You've agreed with that.

So, I'd be very interested in looking at what policies are put in place to put guardrails on that. And to the other point, which has been raised by several colleagues, is the worker's voice.

And so, at these hearings, are they just a public comment or are they just public participants that just have to sit there and kind of watch what's being disclosed publicly, or is there a more formal role?

And if not, that could be something that can be also contemplated through legislation, if not through policy, to have a more formal role of workers at those work sites to have their voice being heard, before there's an agreed upon reduction in settlement or corrective action.

And I'll leave it at that for now to allow for more time for colleagues. But again, appreciate your follow up and follow through on some of the comments made by myself and colleagues.

Thank you. Senator Cortese.

Thank you, Mr. Chair. Just a couple, just a couple of things I wanted to inquire about. Going, first of all, I want to commend Assemblymember Ortega for initiating so much of the work that's been accomplished over the last couple of years. And I know, obviously, there's still a lot of work to do.

And I participated in one of the informational hearings going back over a year ago that focus on some of these issues. Over two years ago, when I was still serving as a Labor Chair in the Senate. At the time, Senator Hurtado, our Senate Agricultural Chair, and I held a de facto virtual hearing.

There were still concerns about COVID at the time and we couldn't really set up a hearing here in the building or across the street. And many thanks to OSHA for participating in that hearing.

And really, I thought giving—providing—very candid, what seemed to be honest testimony, with regard to follow up on complaints, obstacles, that were getting in the way, much like we're seeing here.

We really initiated that because of complaints that were coming from permitted cannabis grows, commercial cannabis grows, and complaints about workforce violations, alleged OSHA violations that weren't being followed up there. And basically, the upshot of that discussion was that a significant number of them weren't being followed up on, particularly on a timely basis.

I should say, parenthetically, that that discussion morphed into a little bit of a larger discussion about agricultural workers, in general, because there were some common themes there, some overlapping themes, as I recall. And one of them was something that I'm not really seeing called out in the audit, but maybe the Auditor took a look at it.

Probably anyone on the panel here would know if that was the case or not. And it wasn't non-responsive employers. It was non-responsive complainants. It was complainants who had filed a complaint, but it took—well, I shouldn't speak to what the cause was, but by the time there was follow up to the complaint, either the employee could—was—no longer employed there or the employee indicated in very simple terms that they no longer wish to pursue the complaint.

And that gave rise to a big discussion, which OSHA staff participated in, and did not seem to contradict about the potential for retaliation.

Where we have large numbers of undocumented workers, sometimes over 40% in these agricultural settings, that folks are being threatened, employees are being threatened, that if they continue to pursue the complaint, they wouldn't have a job. And of course, we've heard that from unions that represent employees, UFCW, United Farm Workers and others, that they hear that.

I've heard it, believe it or not, from clergy who have come to me and said that because of the privilege, the confidentiality privilege that people trust between clergy and individuals, they hear complaints about actual retaliation or worse. And so, I believe it occurs, and I don't think, again, OSHA contradicted any of that.

But the question is, did the Auditor look at in the case files, or—whether you studied them or not, did you come across files where there was just a non-responsive complainant and if so, what was your characterization of those?

A claim that wasn't perfected and therefore we wouldn't need to look at it in the audit or something else? Or perhaps you just put those in a different pile because they didn't have, you know, they didn't have that kind of closure that the rest of these cases did.

Thank you for the question. Our case file reviews were limited to a sample of 60 items. 60 cases. Whether or not those specific cases involved examples that you just described, Senator Cortese, I'd have to defer to Nick, our audit team leader.

Yeah, thank you. We did see case files with anonymous complainants and that I think we heard from a lot of folks is partly to do with fears of retaliation. It could be a lot of factors why a complainant remains anonymous.

But we did see that and one of the things we talk about in the report is trying to change policy to inspect more of those cases. The way the current policy was working is that anonymous complaints were less likely to be inspected if they weren't clearly a serious or imminent hazard.

So, that was one thing we looked at, but the other thing is that based on what we saw in the case files, a complainant's nonresponse after the initial complaint would not necessarily preclude Cal OSHA from taking action, so they could still go out and inspect a site. They do proactive inspections where there is no complainant.

So, it's not necessarily dependent on the complainant to keep interacting with them.

Yeah, but thank you for that clarification.

And, and I remember OSHA giving that exact response and in fact, giving a couple of examples of going out to further, not only to inspect but to sort of pursue whether or not the complainant was employed, whether or not other people had experienced the fact pattern in the complaint beyond just a complainant.

But of course, we come full circle to this issue of capacity to inspect. Obviously, you're not going to get very far with a letter, and push back if I'm wrong about that, if you have a non-responsive complainant and a non-responsive employer at the same time.

But it seemed to us during that discussion that we had a huge problem on our hands in the cases of retaliation, which are the very cases we'd want to, I think, as legislators, pursue with the most vigor when we don't have the capacity to actually go out and physically determine what, what's going on.

Any disagreement with that, just based on your own work? I know you didn't look at those specifically, but I'm saying something out of, you know, if I'm taking liberties here, please let me know.

No, Senator, I don't think you've taken liberties. As one of the observations that's been spoken about today is these letter investigations where the employer is self reviewing its own operations, they don't result in fines and penalties.

The other discussion today that I take note of is this desire to be able to forward instances of worker complaints to the appropriate agency that can enforce fair labor practices, whether it's going to the Labor Commissioner's office or someplace else.

But referrals to other state agencies like the Labor Commissioner's office was not a focus of our audit and wasn't part of our scope and objectives.

Great, thank you. Moving on a little bit here to trying to fix this problem of responsiveness and capacity, and I heard the testimony about minimum qualifications and how perhaps some expansion there, you know, could make hiring easier or more effective or whatever the words were that were used, could help fix the problem.

Has there been, and this is, you know, for the rest of the panel, not the Auditor, but I welcome the Auditor to make any observations here.

Has there been discussion within the Executive Branch of, you know, taking urgency measures, whether that be Executive order or other Executive powers to waive some of these requirements, accelerate hiring, make it easier for state employees to move from one code or one division to another so that they can fill some of these positions?

What has happened besides just general hiring, outreach work that we see here in some of the documentation? I'd like to know what those discussions, what's occurred in those discussions, if anything. You're presenting it to us. We're the legislative branch. We don't have the power to issue an Executive order.

I'm pretty sure a couple of the legislators here would do so immediately. If we had that power, we would just say waive the damn minimum requirements, get those positions filled, use your best judgment as to qualifications and start moving.

I just want to know if there's discussions like that going on at the Executive Branch where that power is really held.

So, thank you for the question. I'm not aware of these discussions happening at that level.

Who do you talk to about it besides us? I mean, you made recommendations to us about the modification of minimum qualifications. Obviously, we're not the HR Department and we're not the Executive Branch, so is this just something internal to OSHA? You think about it, you talk about it, and keep it to yourselves?

Other than when there's a hearing like this? I think we can empathize with the problem, but I think I want to know what you're doing to, you know, to accelerate that remedy.

So, actually, I do think we are—it may not feel that way, but we are actually expediting this process. I think CalHR has actually played a much more intimate role in updating the MQs and the classification, in general.

I think one of the issues that we have is we're relying on data through surveys and interviews to actually drive our decisions about what the MQ should be. And that's, that's what's taking time.

And although it's expedited and CalHR is playing a lead role in reviewing the specs with us and developing the board item for the State Personnel Board, that's primarily how we're expediting this process.

Yeah, I don't know if you want to say more, Director, but.

I would just, again, coming into this, with knowing the background of how the process of these things take, I would say that I was impressed by how CalHR appears to be leaning into this. I think sometimes there's, believe me, there's many state classifications that are in need of the class spec being updated.

And CalHR, from what I've seen in my short time, has been pretty, I think, almost embedded a little bit in the process and understanding that all of this still has to go to the State Personnel Board, but I think they're doing everything they can to move much faster than normal.

Andrew, I don't know if you have more insight.

I just had one other comment. When we're talking about a specification revision, it's not just one. In this case, Cal OSHA has 26 specs that need to be revised. They're all engineers. They do similar work, but not identical work. And they are all paid pretty much the same. Actually, I think the pay is identical.

So, CalHR wants to have consistency in the specifications that we're revising because there's such an interconnection between what the different classifications do. So, there is some uniqueness with Cal OSHA that probably don't exist with other classifications just because of the scope and number of classifications we're dealing with.

And would you oppose legislation that simplified that reduce the number of classifications?

So, actually, that's one of the things that we're asking them to do, is to look at the number of classifications that we're using, in addition to the MQs and the scope within the specification.

But if there was, if there were, if I were to bring legislation next year to consolidate those classifications, reduce them, and direct CalHR to dramatically open up hiring within the next calendar year, would you oppose that for cost or other reasons, for appropriations reasons? Do you like those classifications? Would you, would you fight to keep them, or would you cooperate with that kind of legislation?

I don't think we can speak to potential legislation, but I think that we would, we are generally supportive of CalHR's effort to do what they're doing. We just know that it's—it takes a long time because as Andrew said, there's, there's other classifications that are impacted by making changes to this one.