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OSHA Fines for Workplace Safety Violations Increase for First Time in 25 Years

A provision in the budget bill signed by President Obama in November raised federal U.S. Occupational Safety and Health Administration (OSHA) fines for workplace safety violations for the first time in more than a quarter of a century. The bill requires OSHA to issue a one-time “Catch-up Adjustment” to bring penalties in line with inflation increases since 1990. Additionally, the budget bill requires OSHA to make annual adjustments going forward in order to have fines keep pace with inflation.

OSHA has not yet announced the exact “catch-up” increase; it is believed that it will reflect the approximate 80 percent increase in inflation from 1990 to present.  The increased penalties will take effect no later than August 1, 2016, in all states regulated by Federal OSHA. The law does not automatically apply to states regulated by State Plans, but since State Plan programs must be at least as effective as Federal OSHA, State Plans are expected to increase civil penalties as well.

Assuming an 80 percent increase, the maximum monetary penalties for OSHA violations will be:

• Other than serious: - $12,600 (increased from $7,000);
• Serious - $12,600 (increased from $7,000);
• Repeat – $126,000 (increased from $70,000); and
• Willful - $126,000 (increased from $70,000).

However, the initial “catch-up adjustment” could be much more than the expected 80 percent, because the Act sets the “maximum adjustment” at 150 percent of the current penalty structure.

Reactions to the increase have been mixed. Some industry representatives oppose OSHA efforts as they believe that increased fines will have a serious impact on businesses – particularly smaller operations. Other experts argue that boosting fines for OSHA still keeps them extremely low compared to other agencies, like the EPA, which imposes such maximum penalties of $270,000 for violating the Clean Air Act. The Department of Labor website cites the following example demonstrating the inadequacy of OSH Act penalties: when a tank full of sulfuric acid exploded, the company responsible received a penalty for polluting that was almost 60 times greater than the OSH Act penalty for the death of a worker that resulted from the same incident.

Monetary penalties are an important part of the enforcement process and penalties for violations of the OSH Act are widely regarded as too low to create an effective or credible deterrent to noncompliance. Employers who play by the rules may be at a competitive disadvantage.  “The most serious obstacle to effective OSHA enforcement of the law is the very low level of civil penalties allowed under our law, as well as weak criminal sanctions,” said Assistant Secretary of Labor for OSHA, Dr. David Michaels to a House subcommittee on October 7, 2015. “OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business.”

Michaels also said that “Unscrupulous employers often consider it more cost effective to pay the minimal OSHA penalty and continue to operate and unsafe workplace than to correct the underlying health and safety problem.”

Whether you agree or disagree, this change is coming! Employers should be prepared for a potentially costly encounter with OSHA. Employers would be well advised to:

• Know what regulations apply to their business
• Assess their workplace for hazards and address them as quickly as possible
• Talk with employees about their safety concerns and address them as quickly as possible
• Ensure that their safety programs are comprehensive and up to date
• Ensure that employees receive all necessary safety training, can demonstrate that they understood the training and that all training is well documented
• Instill employee safety as a core company value

Taking these steps will demonstrate your commitment to safety and help ensure that higher OSHA fines are someone else’s problem!

About the Author

Shannon DeCamp is Client Services Manager for TechneTrain, Inc. For further information regarding OSHA compliance requirements for the surface fabricating industry, visit www.technetrainonline.com, or contact TechneTrain, Inc. at (800) 852-8314. TechneTrain has a full line of easy-to-understand reference materials and turnkey employee training programs with detailed information on OSHA Compliance requirements specifically designed for the surface fabrication industry. These products are offered through ISFA at discounted prices.