OSHA Hazard Communication Update 2024: Impact on the Economy

On May 20, 2024, the Occupational Safety and Health Administration (OSHA) issued the final rule updating the Hazard Communication Standard (HCS), also referred to as HazCom, to align primarily with the 7th revision of the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS). 

The final rule of the HCS enhances the information on safety data sheets (SDS) and labels for hazardous chemicals which helps increase worker protection and reduce incidences of chemical-related occupational injuries and illnesses. The updated Standard also provides better alignment with other U.S. federal agencies and essential trading partners around the world.

How is the HCS update affecting the economy?

OSHA estimates 94% of SDS and 64% of shipping labels will need to be updated. 

OSHA estimates that the final rule will affect 111,223 firms, 147,832 establishments, and 1,530,476 employees. The final rule is also estimated to provide cost savings to affected industries or have a cost of less than 1% of revenues or 10% of profits. OSHA estimates the net cost savings to be $29.8 million per year (7% discount rate).

For more information on OSHA’s economic analysis of this rule please see Section VI. Read more about the Final Economic Analysis and Regulatory Flexibility Analysis of the final rule.

How is the HCS update affecting businesses?

The main industries affected by the HCS are Mining, Quarrying, and Oil and Gas Extraction, Chemical Manufacturing, and Wholesale Trade. The total anticipated costs for these industries include:

• Rule familiarization: $1,143,462
• Training: $136,953
• Revised SDS/Labels: $3,861,911

The HCS updates affect industry from manufactures to end users, including the following:

• Manufacturers
  • Must classify chemicals in accordance with updated provisions and provide updated SDS and shipping labels compliant with the updated Standard.
    •  Substance SDS are required to be updated by January 2026 and mixture SDS by July 2026.
  • Provides time for manufacturers of mixtures to obtain new substance SDS to incorporate into mixture SDS.
  • Responsible for updating product SDSs and labels with updated HazCom information.
  • Updated SDSs must be provided to downstream users.
• Distributers
  • Must procure the updated SDS and shipped container labels from upstream suppliers to provide to customers.
• Employers and End Users
  • SDS libraries must be updated with new SDS according to the updated Standard.
  • The updated SDS and labels are needed to update workplace Hazard Communication management practices including written HazCom plans, workplace labeling and training.

What are the impacts of the HCS update on the U.S.?

OSHA expects the revisions to the HCS to affect worker health and safety, emergency response as well as have a financial impact to manufacturers and employers, including:

• Modest improvement in worker health and safety 
• Quicker reaction time in an emergency 
• Net savings of $29.8 million per year at a seven percent discount rate

What are the impacts of the HCS update internationally?

Without reducing protections, the revised HCS aligns more closely with U.S. trading partners, including Canada, Australia, New Zealand, and Europe. The decision to align with Canada has been a priority as it helps facilitate cooperation between the two countries, eases compliance for employers who participate in both markets, and strengthens worker protections by providing harmonized hazard communication standards across trade borders. Read more about the impact of OSHA’s revised HazCom standard on WHMIS and Canadian safety practices.

Is your Company taking the necessary steps to conform to the HCS update?

The financial impacts of adapting to OSHA’s HCS updates can seem daunting. However, these regulatory changes also present an opportunity for businesses to strengthen their compliance strategies, reduce risks, and maintain long-term growth. The key to successfully managing these challenges lies in having the right support.

CHEMTREC specializes in guiding businesses through the maze of evolving regulations. Our dedicated team can help your company not only meet the demands of regulatory compliance but also transform these challenges into opportunities for efficiency and success.

Safety Data Sheet Solutions

Authoring, Access, and Distribution offers SDS creation, storage, and distribution catered to your company’s internal needs and supply chain. 

• Our team of SDS authors have in-depth understanding of the regulatory landscape and will put your mind at ease with high quality, customized, cost-effective Safety Data Sheets. 
• Our SDS Management solution allows access to your SDS anytime, anywhere, within your company and to authorized distributors/contractors/customers. 

Hazmat Training

Effective training goes beyond checking a compliance box; it empowers your workforce to act safely and decisively. With our training programs:

• Your team becomes better equipped to handle hazardous materials, reducing the likelihood of workplace incidents.
• You can foster a culture of safety; improving employee morale and trust while lowering the risks of costly fines and/or operational delays.

Consulting Services

Proactive planning is the key to avoiding disruptions and staying ahead of regulatory changes. With CHEMTREC’s consulting expertise:

• You’ll reduce the risk of non-compliance and costly fines with tailored strategies that fit your unique needs.
• We can assist with regular audits and risk assessments that help you build a more resilient and efficient operation, saving time and money.