OSHA Penalties on the Rise

In the recent Bipartisan Budget Act of 2015, there is a provision for an increase in OSHA penalties and will be based on the Consumer Price Index. Every year, starting January 2017, there will be updates to civil penalties and published by January 15th of each year.

Part of this Act contains a provision to “catch up” which will increase monetary penalties, based on a formula, up to a cap of 150%. This equates to a penalty now set at $10,000 could not increase to more than $25,000. In addition, the ACT also provides steps to “speed implementation”. If approved, the first adjustment to penalties would be published by July 1, 2016 and effective by August 1, 2016.

What does this mean for you, the business owner? OSHA wants higher penalties – they believe this will force companies to provide safer workplaces, thus fewer citations. However, the President and Congress are not counting on the increase in penalty caps to result in better safety for workers. Instead, they are counting on employers to receive the same number of citations but with higher penalties.

And, this is not the first time penalties have been addressed. In fact, in 2009, a bill was introduced that would not only increase penalties, but to expand OSHA’s reach as well. This provision would expand jurisdiction to public employees as well – including federal, state and local government workers.

In April, 2010, OSHA announced a Severe Violator Program which would replace the Enhanced Enforcement Program. This particular program was implemented as a result of the safety and health issues facing American workers. As part of this program, OSHA would increase inspections to employers who repeatedly showed indifference to safety practices along with mandatory follow up. As the number of inspections increase employers should expect additional citation which translates into higher fines and penalties to employers in the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, and the Trust Territory of the Pacific Islands.

On the other side of the coin, however, in 2011 funding has been cut for the Voluntary Protection Program (VPP). In this case, funds were redirected to enforcement and target companies who exhibited a disregard for worker safety. The VPP intent is to promote effective worksite-based safety and health. In the VPP, management, labor, and OSHA establish relationship at workplaces to implement a comprehensive safety and health management system. The end result if successful is being officially recognized by OSHA.

In summary, the last time fines were increased prior to Bipartisan Budget Act of 2015 was in 1990. This 25 year hiatus from increase fines has ended with the passage of the Bipartisan Budget Act of 2015 which annually will automatically calculate fine and penalty increases.