OSHA Is Granted the Ability to Increase Maximum Regulatory Penalties Up to 82%

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EFFECTIVE

August 1, 2016

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On November 2, 2015, President Obama signed H.R. 1314, also known as the Bipartisan Budget Act of 2015, which contains a provision that would allow the Occupational Safety and Health Administration (“OSHA”) the ability to increase penalty fines as much as 82%. This provision allows OSHA a “catch-up adjustment” to compensate for over two decades of static fines.  It has not yet been confirmed that OSHA will choose to increase penalties to the full 82% allowed; the provision simply grants OSHA the ability to do so, and does not actually require such action. However, increases are highly likely based upon previous commentary from OSHA leadership about the benefits of stiffer regulatory punishments.  Initial penalty increases are mandated to become effective as of August 1, 2016; however, the new penalties can be assessed to violations occurring before the penalty increase.

This information applies to all employers nationwide, even those who do not have a typically hazardous work environment.  Citations for violating seemingly minor safety regulations, especially repeat violations, could now cost almost double the previous maximum fine.

Details

OSHA has not increased its maximum penalty amount since 1990.  The Bipartisan Budget Act of 2015 amends The Federal Civil Penalties Inflation Adjustment Act of 1990 to allow OSHA to raise the maximum penalty amounts for serious, repeat, willful, and “other than serious” violations.  The amount OSHA can raise the maximum penalties is limited to the inflation rate measured by the Consumer Price Index (“CPI”) from 1990 to 2015, which is approximately 82%.  For example, this means that a $7,000 maximum fine for serious or “other than serious” fines could increase to as much as $12,744; a current maximum fine of $70,000 for repeat and willful violations could increase to as much as $125,438.

Additionally, after this one-time “catch-up” adjustment goes into effect, OSHA will be able to annually increase maximum penalties, tied to increases in the CPI, by January 15th of each subsequent year, beginning in 2017.

How Am I At Risk with this New Law?

Although the OSHA Administration has not yet commented on this development, it is prudent for all employers to pay attention to prescribed safety regulations and to ensure that safety is a genuine focus within the workplace.  Employers should not assume they are not at risk for safety violations just because they may not be in a high-safety-risk industry.  While hazardous occupations—such as construction or manufacturing—may certainly have more risk for potential injury or may be subject to industry-specific regulations, general safety concerns can still represent a potential danger zone to all employers.

For example, retailers or corporate offices could still face hundreds of thousands of dollars in citations for seemingly minor items, such as obstructions blocking exits, failing to maintain or lacking altogether fire extinguishers, or failure to report injury or illness within the appropriate time frame.  Even if an employer has never had an accident or injury occur, compliance with OSHA standards should not be overlooked.  Employers need to thoroughly review their current safety practices.

Action Items:

  1. ManagEase can help! Contact Anabel Tarizan, Director of Client Services, at (888) 230-3231 or atarzian@managease.com, to engage ManagEase’s services for safety inspections/assessments, safety plan development, and specialized training across a wide variety of industries.
  2. Review current safety/IIPP plans and training schedules currently in place for compliance with OSHA regulations.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2015 ManagEase, Incorporated.

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