Significant Increases to OSHA Penalties Forecast

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For the first time in over 25 years, OSHA will be raising its penalties for infractions. EPA’s penalties are going up as well, but that agency has incrementally raised its penalties over the years. Since 1990, OSHA has been one of only three federal agencies that were specifically exempted from a law that required federal agencies to raise their fines to keep pace with inflation. The new two-year bipartisan budget, signed by President Obama on November 2, 2015 – entitled Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 – eliminates the exemption for OSHA.

What does this mean for employers who incur penalties for OSHA violations? A huge increase in fines, that’s what. The new law requires an initial “catch-up adjustment”. The catch-up is based on the percentage difference between the Consumer Price Index (CPI) in October 2015 and in October 1990 (the last time the fines were adjusted.) This will likely result in about an 80% increase in the current penalty amounts. Thus, the maximum penalties for OSHA violations could be:

• Other than Serious – $12,600 (currently $7,000)
• Serious – $12,600 (currently $7,000)
• Repeat – $126,000 (currently $70,000)
• Willful – $126,000 (currently $70,000)

After this initial catch-up is put into place beginning no later than August, 2016, the law then requires OSHA to adjust the penalty amount annually for inflation, so the next adjustment will take place in January 2017.

To implement the increased penalties, the law directs OSHA to issue an interim final rule, which means that the rule will not go through the usual public notice and comment. Instead, the rule will become effective immediately once published. In State Plans where the state is responsible for enforcing occupational safety and health rather that OSHA, the increased penalties will not automatically apply. However, a State Plan’s requirements must be at least as effective as OSHA requirements, so State Plans may increase their penalties in order to match OSHA’s new penalties.

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Posted In: Government, Safety