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... high bracket sellers. The selling owner may make other retirement provisions. He may set up a qualified retirement plan (pension or profit sharing plan), which would benefit the other employees as well as the owner, but which add to the agency's overhead. He may establish a non qualified and unfunded deferred compensation plan, which depends on having someone available to continue running the agency after retirement. He may set up an Employee Stock Ownership Plan or ESOP, under which he sells out to the agency's employees, possibly using a tax deferred rollover into other securities. He may merge with a large brokerage, possibly staying on for a time as an employee. The most typical transfer methods for an agency are sale of stock of a corporation, sale of assets of the agency, a partnership liquidation of the interest of a partner in a partnership, or a statutory merger or other reorganization of two corporations. 5.1.1. Price. The purchase price for the agency can be determined in a number of ways. There can be a formula, such as 1 times or 1.25 times commissions. Such formulas have a way of getting out of date quickly, so they should be used with caution if the transaction is not to close soon. There can be an appraisal by a specialty insurance appraiser. These appraisals look at the bottom line rather than the gross commissions of the agency, and consider how the agency compares to others in the industry. They are aware of comparable sales. There can be a combined approach, under which the parties agree to attempt to determine the price themselves, ...

Legal Outline For California Agencies - Chapter 5
LEGAL OUTLINE FOR CALIFORNIA INSURANCE AGENCIES CHAPTER FIVE TRANSFERRING AGENCY INTERESTS BY SALE, ETC. 5.1 Objectives of buyers and sellers of agencies. In the typical sale or transfer of an agency, the interests of the buyer and seller differ. The buyer is concerned with being able to make the payments from earnings of the business, with as little down as possible. He typically wants to be able to depreciate as many of the assets he acquires over as short a time as possible, to reduce the tax cost of the acquisition. He also wants to avoid liabilities of the acquired business, such as errors & omissions exposure. The seller may wish to defer tax from the sale. He normally wants as much of a down payment as possible. He typically would prefer to have capital gains treatment for the gain from the sale of the business, rather than ordinary income treatment, if he will be at a higher income level after the sale and the rate difference will be important. He wants to avoid employment taxes on the payments to him. He would prefer payments to him individually rather than to a C corporation, because he then does not have to worry about how to get the money out of the corporation without incurring a second tax. He wants to have security for the payments due him. He would prefer to have the buyer or the agency take over future liabilities, such as errors & omissions claims, and get him off the hook. The Clinton 1993 tax changes (93 OBRA) have changed the cost/benefit calculations on sales. They make some formerly non- deductible items (such as good will) depreciable over a 15 year period, but also extend the amortization period of covenants not to compete to 15 years. They also raise individuals' maximum federal rates on ordinary income (39.6%) substantially above the capital gains rates (28%), making capital gains treatment more important to high bracket sellers. The selling owner may make other retirement provisions. He may set up a qualified retirement plan (pension or profit sharing plan), which would benefit the other employees as well as the owner, but which add to the agency's overhead. He may establish a non qualified and unfunded deferred compensation plan, which depends on having someone available to continue running the agency after retirement. He may set up an Employee Stock Ownership Plan or ESOP, under which he sells out to the agency's employees, possibly using a tax deferred rollover into other securities. He may merge with a large brokerage, possibly staying on for a time as an employee. The most typical transfer methods for an agency are sale of stock of a corporation, sale of assets of the agency, a partnership liquidation of the interest of a partner in a partnership, or a statutory merger or other reorganization of two corporations. 5.1.1. Price. The purchase price for the agency can be determined in a number of ways. There can be a formula, such as 1 times or 1.25 times commissions. Such formulas have a way of getting out of date quickly, so they should be used with caution if the transaction is not to close soon. There can be an appraisal by a specialty insurance appraiser. These appraisals look at the bottom line rather than the gross commissions of the agency, and consider how the agency compares to others in the industry. They are aware of comparable sales. There can be a combined approach, under which the parties agree to attempt to determine the price themselves, and go to an appraiser if they cannot agree. A seller should sell the sizzle as well as the steak. An insurance specialty consultant can suggest ways to make the agency more saleable. The specialist may know of a buyer who may be interested. Structuring the taxes in a way favorable to the buyer may also enhance the agency's value. Steps to reduce litigation exposure through proper anti piracy agreements and similar steps may also enhance value. 5.2 Overview of tax aspects of the transfer. The typical agency owner has no income tax basis in his agency, which he normally has built up with his own efforts. This means that the entire gain on a sale is subject to tax. An exception exists when the owner purchased or inherited the agency, in which case the purchase price or estate tax valuation may give him a tax basis in the agency, and make capital gains treatment more important to him. The owner of an incorporated agency would like to avoid double taxation, once tax on the corporation's sale of the agency, and another tax when the sale proceeds are distributed to the stockholder. This can be done if the owner sells stock in the agency, or gets stock in another agency in a merger or other reorganization. It may also be done (wholly or in part) if the corporation has elected Subchapter S treatment and the income of the corporation is taxed to the shareholder. Often the agency owner would like to defer tax. This can be done in a statutory merger or other form of reorganization to the extent that the agency owner receives only stock in the acquiring entity. It can be done with an ESOP where the ESOP owns over 30% of the stock after the transaction and the owner elects to roll over the proceeds into certain other types of securities. He will get a stepped up basis on death if he holds the other securities until death. Also, if the price is paid in installments, the tax can be deferred until payment is received. The owner's benefit if the transaction is structured as a capital transaction is that he pays a tax at the individual federal capital gains rate of 28% IRC 1(h)) on any net capital gain over his basis, and recovers his basis (if he has one) tax free. If the owner has no basis and his marginal ordinary federal income rate (IRC 1) is only 28% (for example, married persons under $89,150), he gets no benefit from capital gains treatment. If his marginal federal ordinary income rate is the maximum of 39.6% (over $250,000), he pays an additional federal tax of 11.6% on amounts over $250,000 if he receives ordinary income rather than capital gains treatment. The numbers vary somewhat for selling C corporations, which are taxed at a rate of from 15% to 35%, IRC 11, with a maximum capital gains rate of 35%, IRC 1201(a). The acquirer's detriment if there are non deductible payments to offset against agency income is an ordinary income tax on every non deductible dollar (from 15% to 39.6% for individua... Continuing as a solicitor Not infrequently a retiring producer wants to continue to place some new business as a solicitor. A solicitor should be an independent contractor if any payments are being made to him that are intended to be excluded from withholding and employment taxes, such as partnership liquidation payments or covenant not to compete payments. Ability to draw Social Security The ability to draw social security despite receiving payments depends on whether or not the income is considered self employment income, how much time the recipient puts in to receive the income, how much he receives, and how old he is. This outline will consider the right to social security to the extent it bears on how to structure the disposition of an agency. The outline is not intended to be a complete discussion of eligibility to draw social security. For example, a retired partner can receive partnership liquidation payments under IRC 736 and still draw social security if he renders no substantial services, which generally means less than 45 hours a month. (However, rendering services may make him liable for withholding, as already noted). 42 USCA 403(b), 20 CFR Reg 404.446-.450. S corporation payments and covenant not to compete payments, if they are not considered employment income (see above), should not affect the right to draw social security to any greater extent than dividends or other non-employment earnings of the retired person. The same should be true for deferred compensation payments for past services. Income in respect of a decedent Income in respect of a decedent is installment or similar deferred income that an estate or beneficiary receives after the decedent's death. IRC 691. It is taxed to them when received, but a deduction is allowed for estate tax purposes. In addition, it is not stepped up in basis upon the death of the producer. IRC Section 1014(c) Any of the strategies discussed which involve transactions consummated before an agent's death with payments that may extend beyond his death may generate income in respect of a decedent. This includes postmortem partnership liquidation payments C. W. ELlis (CA2 1959) 264 F.2d 325; Rev. Rul. 71-507, 1971-2 CB 331, and postmortem deferred compensation or bonuses if the decedent had a aright to them at death E. D. Roberts (1983) 80 T.C. 619, aff'd (CA6 1985) 752 F.2d 1128. Among the terminal illness strategies the agent might consider (a) getting fully paid before death (which would include receiving stock in a merger or an ESOP sale with a rollover, both of which would defer tax and enable a basis step-up), or (b) having the sale or other transfer triggered by or after death (and after the agency interest is stepped up in basis). 5.3 Commission splits after retirement or leaving agency. The parties sometimes agree to continue commission splits for a period of time after a producer retires or leaves the agency, with the agency owning the new expirations information it prepares for no additional payment. This approach is primarily used in two circumstances. One circumstance occurs when a retiring producer owns his expirations. Another circumstance occurs when a producer is given deferred commissions in the business he produces for the agency, but not an equity interest in the expirations or the agency. If successful, this approach will make the commission split payments to the departing producer excludable from agency income. The deferred commission approach is increasingly being used today when producers with small books of business join up with a larger agency with more markets. The producer exchanges ownership of his expirations for a vested deferred compensation arrangement. This approach gives a better tax result for the agency, and need not be a detriment to the individual producer if the commission split compensates him fairly. 15% of the renewal commissions actually paid for 5 years is a typical type of deferred compensation provision for a producer who did not bring a book to the agency. One who did bring a book would normally receive a higher payment, such as 20% or more for 5 years. Deferred commissions are frequently subject to vesting requirements for new production while at the agency, though not for expirations brought to the agency by the producer. Use of ERISA/IRS vesting provisions is not a bad idea (IRC 411), though deferred compensation plans in producer agreements are probably not subject to ERISA. Dept. of Labor Advisory Opinion 89-07A (Apr. 27, 1989). In order not to leave the agency vulnerable to future competition by the producer, the agreement usually provides that the deferred compensation is lost if the producer competes with or accepts business from the accounts of the agency. At a minimum it offsets the damage suffered by the agency due to the competition. 5.4 Sale of shareholder's stock in corporation. If an agent sells his stock in an incorporated agency, he (not the corporation) receives the proceeds. There is no tax at the corporate level, and hence no double taxation. The seller will normally receive capital gains treatment of gain in excess of his basis in the stock. Purchase of stock generates no deductions for buyer, unless part of price is allocated to other assets (such as a covenant not to compete) which can be amortized. Under 93 OBRA, purchased good will, expirations, and covenants not to compete may be amortized over a 15 year period. A sale of stock normally will not permit good will and expirations to be amortized. Although a sale of stock could be followed by an IRC Section 338 election to allow the buyer to treat the stock sale as an asset sale, this treatment may trigger a tax on the seller and on the seller's corporation both. The net tax effect of a stock sale followed by a Section 338 election has in most respects the same tax consequences as a sale of assets, and the seller should be aware of this. It defeats the reason for a stock sale from the seller's viewpoint. In valuing expirations, good will, or a covenant not to compete, potential problems were formerly created by the IRS's 'residual method' of allocating payments. The IRS will first allocate payments to the hard assets of the agency, and then allocate any residual value to the intangible assets. Since all these assets are now amortized over 15 years, the distinction among them seems to have disappeared. The buyer of stock takes over the corporation's liabilities, as well as its assets. Buyer may ask seller to indemnify him against some liabilities, such as taxes, E&O claims, or major accounts lost within a short time after the acquisition. If a corporation agrees to redeem its own stock, it may be precluded from doing so if it cannot meet certain net worth and liquidity tests set forth by Calif. Corporations Code 500-501. An individual shareholder has no such limitations. Sometimes an agreement provides that if the corporation cannot make the payments, an individual will do so. 5.5 Sale of assets - expirations and good will. A seller may sell the assets of an agency instead of its stock. It may have tangible property, such as computers, office equipment, etc. However, normally its expirations and good will are its most valuable assets. Under the Clinton tax law changes, the buyer normally may amortize expirations and good will over a 15 year period. Exceptions apply to 'self generated intangibles', and to sales to related persons or where common control existed, which are bootstrap arrangements to try to deduct expirations and good will without true ownership changes. IRC 197. The payments for these assets should be treated as capital gain to the seller, to the extent they exceed basis. Potential double taxation exists in an asset sale if a C corporation owns the expirations and good will. The first tax is paid by the corporation on the sale. A second tax is paid by shareholders on distribution of the sale proceeds. Double taxation may be avoided if the expirations are individually owned by the stockholders or a partnership, and only administered by the corporation as an independent contractor. A Subchapter S election at the outset should also avoid double federal taxation. The California version of the bulk sales law does not apply to sales of insurance production agency assets. Calif. Commercial Code 6103. 5.6 Allocation of part of the payments to a covenant not to compete, consulting agreements, & interest; use of deferred compensation, etc. In either a sale of assets or of stock, some of the price may be allocated to deductible or amortizable items such as a covenant not to compete. The covenant is now amortizable over 15 years. IRC 197. If the IRS disallows part of the value of the covenant, the remainder is capitalized in a stock sale, but not in a sale of good will. Deferred compensation arrangements that the agency entered into before the sale are liabilities that will reduce the net value of the agency for sale purposes. Deferred compensation to the owner will be deductible to the agency when paid, to the extent it is reasonable in amount. IRC 212. The same is true of consulting fees. Interest payments on the sale should be deductible in most circumstances. IRC 163(d). These payments will be received as ordinary income by the recipient, and may generate employment taxes in the case of compensation for services. In the case of a C corporation, they may be used in appropriate cases to avoid double taxation at the corporate level as well as on the individual owner. 5.7 Merger or other combination with another corporation. Mergers and other reorganizations between two corporations are complex, particularly when one is listed on an exchange. This discussion will try to show the uses of a merger, but cannot get into the complex details of corporation, corporate security and tax law involved. In a nutshell, a merger usually (a) requires no cash for the acquirer (at a cost of dilution of the stock), and (b) defers tax for the acquired shareholder, but (c) generates no cash for the acquired shareholder until the stock is sold (normally on an exchange). Mergers are normally used by large brokerages which are expanding by acquiring local agencies. They are used much less frequently in acquisitions by smaller firms. There are several types of tax deferred reorganizations involving two or more corporations, including statutory mergers, stock for stock exchanges, and stock for asset exchanges. IRC 368. If the agency game plan is to grow through mergers, or to be acquired down the road by a large brokerage, much advance planning is advisable. This is an area in which specialty insurance consultants can perform a valuable service, both in preparing for merger and in finding appropriate merger partners. Potential advantages of a reorganization. In a corporate reorganization, usually the acquirer pays little or no cash to acquire an agency, by paying with its own stock. The owners of the acquired agency normally receive stock of the acquiring agency. Normally tax is deferred on this stock until it is sold. If they receive cash or its equivalent (referred to as 'boot'), the 'boot' is taxed when received. A statutory merger or stock for stock reorganization normally eliminates double taxes (that is to say, on the acquired corporation and on the individual shareholder when the corporation is wound up), since the new stock is normally received by the individual acquired shareholder in exchange for his stock in the acquired company. The acquired shareholder often receives more liquid new stock in place of the stock of his old agency. Frequently the new stock is listed on an exchange, whereas the old stock had no ready market. Potential disadvantages of a reorganization. A merger or reorganization usually will bring with it the obligations of the acquired corporation, such as potential errors & omissions claims. A reorganization also makes it extremely difficult to amortize the expirations without creating additional problems. Amortization is possible through an election to treat a stock for stock exchange as a sale of assets under IRC 338, or by a simple sale of assets instead of a reorganization. However, such a sale or Section 338 election will normally result either in an immediate tax to the acquired shareholder on all or part of the gain, and may also result in a double tax (if the acquired corporation is a 'C' corporation). A Subchapter S election by the acquired corporation may reduce or even eliminate the double tax in the case of an election, particularly if done early on. However, it may leave the acquired shareholder with a tax but without cash to pay it because the stock he received is tied up by corporate securities laws. It may also result in a cash outlay by the acquirer if the acquired shareholder does not want to be paid in stock. In short, it is difficult if not impossible to have your cake (in the form of amortizable expirations) and eat it too (in the form of payment of stock by the acquirer and deferral of tax by the acquired shareholder. If you plan to use a reorganization, don't plan on being able to amortize the expirations. You can still amortize a covenant not to compete. The sale of the new stock received by the 'seller' to a public company may be restricted for a period of time under the securities laws. Frequently two or more years must elapse before the seller can cash out the stock he receives on a reorganization. The acquirer suffers dilution of the ownership interest of its shareholders. This is normally not an important consideration for a large public company, but it usually is a consideration for a smaller company acquiring a book of business. Frequently the acquiring agency employs an acquired shareholder for a period of time to help retain the acquired business. Often this shareholder will be paid a substantially lower salary than he received under his old agency, particularly in acquisitions by public companies. Many newly rich agents are shocked when they try to make their children's college payments on what they are paid in salary by a national brokerage, particularly if sale of their new stock in the brokerage is tied up by securities regulations. 5.8 Partnership retirement agreement. A partnership may enter into a buy-sell agreement with a partner, but it has another option for a partner who wishes to retire. A partnership liquidation agreement usually can make most liquidation payments to a retiring partner fully deductible to the remaining partners or the partnership. IRC 736. If the retiring owner is willing to accept ordinary income treatment, it is easier to make acquisition payments fully deductible through a partnership liquidation agreement than through a sale of stock or assets. In the case of a deceased partner, the payments may be income in respect of a decedent, suffering both estate and income tax (with

Preparing For An Osha Inspection
PREPARING FOR AN OSHA INSPECTION by Bill Grieb This issue is on inspections: What is the Occupational Safety and Health Administration (OSHA) looking for, how to prepare, and an inspection checklist. If you will use this checklist to look for safety hazards in your workplace you might be able to prevent an accident. It is important to document improvements and cost savings that your safety and inspection program provide. While inspecting your site for safety hazards, don't forget to look at each operation and consider engineering changes that can improve workplace safety and reduce the risk of injury. Evaluate any use of hazardous materials for the possibility of substituting less hazardous materials. OSHA Inspections Federal OSHA reports only 24,000 inspections in 1996. This is almost 20% less than in 1995 and over 40% less than in 1994. Many union officials feel that this is a major threat to improved workplace safety and health. The Wall Street Journal quotes Peg Seminario, the AFL-CIO director of safety and health: 'The threat is quite troubling and problematic. Without more enforcement, OSHA is no longer a credible threat.' OSHA claims that there are multiple reasons for this decline. They cite a hiring freeze and the government shutdown. They claim that a great deal of the decline is due to 'reinventing OSHA.' They cite the agency's move to cooperate with business rather than penalize them. My opinion is that irrespective of the level of surveillance by OSHA, accidents cost big money, and an effective Workplace Safety and Hazard Communication Program is the best insurance you can have. It will also reduce your insurance costs, which are based on your previous safety claims. HazCom Violations In 1994, more than 15,000 businesses were fined a total of $2,400,000.00 for HazCom violations. These fines were levied in both general industries and construction firms. The most frequent citations were: No written HazCom plan Missing MSDS (Material Safety Data Sheets) Lack of proper employee training Labeling errors or not labeling containers Inspections One of the best ways to prevent workplace injuries and illnesses is a comprehensive inspection program. Regular inspections should be an integral part of your Workplace Safety and Hazard Communication Program. After a discussion on how OSHA goes about an inspection, there is an extensive checklist that you can use to inspect your workplace. This list cannot be complete since each worksite is unique. Additional pages of miscellaneous items should be prepared with items added as needed to adapt this inspection program to your workplace. Participation A common characteristic of effective safety programs is participation by both management and workers. Management must participate by providing safety resources, pledging a strong commitment to safety, and setting an example through following and enforcing safety rules. All workers need to participate in the safety program by maintaining awareness and focus on safety and making suggestions to improve workplace safety. Safety improvement suggestions should be solicited, acted upon, and rewarded. Remove dangers when noted prevents injuries. OSHA Inspections What do those folks from OSHA look for in inspections? Well, we've X-rayed their brains, and they know about that oily rag you threw in the trash in 1989. Pretty scary. No, really, we didn't X-ray their brains. But we did read their book so we know what they may be looking for and what's on their minds in general. In this issue, we thought we'd share some of this government intelligence with our readers. The inspector looks at your overall safety program; within this scope, management commitment to safety, hazard identification and abatement, and safety enforcement. The inspectors will also talk to your employees. They will ask carefully designed questions to figure out if your safety program is really working or if it's sleeping on the job. Questions might include: What do you do? What equipment and tools do you use? How were you trained? How do you learn safety rules? Are rules enforced for everybody? What do you do in the event of an accident? How do you report problems and suggestions? Is your job safe? Is your equipment safe? There are no surprises here, so all you have to do is maintain reasonable, common sense safety standards and make sure everybody is playing by the rules. Inspectors & You Treat yourself to another cup of coffee and be aware that some of the inspectors are citing employers for use of disinfectants. Some inspectors say that hazard communication training is not adequate for employees exposed to pesticides, germicides, and insecticides. Some inspectors feel that the general training of employees on the safety and health hazards of their job is not as effective as establishing specific employee training requirements. OSHA Inspection Format To prepare for an inspection, compliance officers become familiar with the history of the establishment, the operations and processes in use, and the standards most likely to apply. They gather all equipment necessary to test for health and safety hazards. When OSHA inspectors arrive, they display official credentials and ask to see the employer. Employers should always insist upon seeing the compliance officer's credentials, which can be verified by the nearest OSHA office. Opening Conference: The compliance officer will explain the nature of the visit, the inspection's scope, and the applicable standards. Information on how to obtain copies of the OSHA regulations will be furnished. An authorized representative of the employees, if any, has the right to accompany the compliance officer. The compliance officer will consult with a reasonable number of employees. Walk-Around Inspection: After the opening conference, the compliance officer and the representatives go through the workplace inspecting for workplace hazards. When talking with workers, compliance officers will try to minimize work interruptions. The compliance officer will discuss any apparent violations noted during the walk-around and will offer technical advice on how to eliminate hazards. Closing Conference: The compliance officer reviews any apparent violations with the employer and discusses possible methods and time periods necessary for their correction. The compliance officer explains that these violations may result in a citation and a proposed financial penalty, describes the employer's rights and responsibilities, and answers all questions. Safety and Hazard Inspection Summary Date: Date of Next Inspection: 1. Employer Postings and Recordkeeping 2. Workplace Safety and Hazard Communication Program 3. Fire Protection and Emergency Response 4. General Environment, Walkways, and Stairways 5. Medical Service and First Aid 6. Equipment and Protective Equipment 7. Flammable Materials 8. Hazardous Material Exposure 9. Hazardous Material Handling 10. Miscellaneous Items Remarks Accepted by Safety Manager Signature Date Employer Postings and Recordkeeping (cross out any items that are not applicable): Federal Minimum Wage Federal Job Safety Protection Federal Polygraph Federal Equal Employment Opportunity Federal Americans With Disability Act State Minimum Wage State Discrimination in Employment State Payday Notice Access to Medical Exposure Records Drug-Free Workplace Hazard Communication Workplace Safety Workers' Compensation and Fraudulent Claims Unemployment and Disability Insurance Code of Safe Practices and General Safety Rules Emergency Action Material Safety Data Sheets Exit Signs and 'Not an Exit' Signs Room Capacities Floor Loading Operating Permits and Variances Suggestion Box Recordkeeping: Exposure and Medical Records Carcinogen Use Reports Exposure to Radiation and/or Biohazards Bloodborne Pathogen Program Exposure to Hazardous Substances Summary of Injuries and Illnesses LOG 200 Safety and Health Training Safety Inspections and Corrective Actions Safety Committee Meetings Workplace Safety and Hazard Communication Program (cross out any items that are not applicable): Workplace Safety Written Safety Program: Is the program effective? Is the responsible person identified? Is the program enforced? Hazard Identification System Corrective Action Program Safety Training System Supervisor Training Employee Motivation System Emergency Response Plans Hazard Communication: Is there a written hazard communication program? Are there hazardous material handling procedures? Is there a list of all hazardous substances used in the workplace? Are all required Material Safety Data Sheets (MSDS) checked and available? Is there a policy for labeling? Is there employee training including: 1. MSDS explanation-What it is, how to use it, and how to obtain one 2. MSDS contents for each hazardous substance or class of substances 3. Explanation of right to know 4. Identification of where written hazard communication program is available 5. Physical and health hazards and specific protective measures to be used 6. Details of hazardous communication program, including how to use labeling system and MSDS Is each container for a hazardous substance (i.e. vats, bottles, storage tanks) labeled with product identity and a hazard warning (communication of the specific health hazards and physical hazards)? Employee hazardous material exposure documentation Flammable and combustible materials procedures Ventilation procedures Fire Protection and Emergency Response (cross out any items that are not applicable): Fire protection Fire prevention plan Control of hazards and ignition sources Employee training Fire department communication Alarm system appropriate and tested regularly Fire doors operating Automatic sprinkler system maintained Fire extinguishers accessible Extinguishers serviced Emergency Response: Earthquake plan Flood plan Other natural disasters Evacuation plan Bomb threat Civil unrest Criminal activities Hazardous material leak or spill Environmental hazard Employee Training: Initial response participation follow-up Environment (cross out any items that are not applicable): General environment Clean worksites, general housekeeping Proper removal and storage of scrap, debris and waste Combustible, metallic, and/or corrosive dust removal Burners with prevent flow if pilots fail Adequate sanitary toilets and washing facilities Adequate illumination Other Walkways: Aisles and passageways clear, free of obstructions Appropriately marked 'Exit' and 'No Exit' Non-slip materials as needed Holes and defects repaired promptly and properly Clearance when motorized equipment is operating Immediate clean up of spills No sharp projections in walkways Changes of direction and elevation marked Adequate headroom Standard guardrails, covers, grates, etc. Bridges over conveyers and hazards Glass and skylights appropriate Openings provided with appropriate fire resistant doors or covers and self-closing features as needed Stairways: Standard stair ra...ls 30 - 34' high, 1.5' from wall, capable of withstanding 200 lbs. Stairways 22' or more wide, 6'6' overhead clearance, 30 to 50-degree angle Noise reduction as needed Uniform risers Adequate barriers and warnings where traffic areas impinge. Medical Service/First Aid (cross out any items not applicable): Medical/first aid Local medical facilities Employee qualified to render first aid Health consultation available Emergency phone numbers posted First aid kits First aid kit inspection and approval Special measures such as emergency showers Other Equipment Safety: Lockout /tagout system and training Process safety management Confined space program - Protective Equipment (cross out any items not applicable): Goggles or face shields Gloves, aprons, and shields Hard hats Foot protection Emergency respirators, and fit testing Eye wash facilities and showers Noise protection Protective clothing and equipment Training in PPE use PPE maintenance in good order Other Flammable and Combustible Materials Handling (cross out any items not applicable): Are combustible scrap, debris and waste materials stored in covered metal receptacles and removed from the worksite promptly? Is proper storage practiced to minimize risks of fire and spontaneous combustion? Are approved containers used for the storage/handling of flammable and combustible liquids? Are all connections on drums and combustible liquid piping, vapor and liquid tight? Are all flammable liquids kept in closed containers when not in use? Are bulk drums of flammable liquids grounded and bonded to containers during dispensing? Do storage rooms for flammable and combustible liquids have explosion-proof lights and mechanical or gravity ventilation? Is liquefied petroleum gas stored, handled and used in accordance with safe practices and standards? Are liquefied petroleum gas storage tanks guarded to prevent damage from vehicles? Are all solvent wastes and flammable liquids kept in fire-resistant, covered containers until they are removed? Is vacuuming used whenever possible, rather than blowing or sweeping combustible dust?