Article Contributor: Betsy Sibila
Unlike the Environmental Protection Agency (EPA), whose penalties are regularly increased due to inflation, the Occupational Safety and Health Administration (OSHA) was never included within the same structure, and was required to obtain Congressional approval in order to increase penalties. The result – OSHA maximum penalties have virtually remained the same for decades and are disproportionate to the severity of penalties enforced by other agencies such as the EPA, and the Department of Transportation (DOT).
The Bipartisan Budget Act of 2015 was signed into law on November 2nd. The law includes a provision allowing OSHA the authority to increase penalties in line with inflation by allowing a “catch-up adjustment” dating back to the year 1990. From 1990 through the end of 2015, the Consumer Price Index (CPI) rise is expected to be close to 80%. Applying this logic, the resulting increase in OSHA penalties is estimated as follows:
- Serious Violation Fine – Increase from $7,000 to approximately $12,600
- Repeat or Willful Fine – Increase from $70,000 to approximately $126,000
Dr. David Michaels is the longest serving Assistant Secretary of Labor for OSHA, and has consistently worked to increase OSHA’s enforcement strength and effectiveness. OSHA has been given the authority to increase penalties effective August 1, 2016, however, the Administration has not confirmed the percentage of increase that will be applied. Following the initial increase, OSHA will be permitted to increase penalties annually based on the CPI. As Dr. Michaels stated, “OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business.”
Workplace injuries and illnesses cause an enormous amount of physical, financial and emotional hardship for individual workers, and their families. At the same time, costs to employers are also substantial, including workers compensation payments, decreased productivity, and the costs of replacing injured workers. These harsh realities underscore the urgent need for employers to provide a safe workplace for their employees. The increase in penalties is scheduled to take effect on August 1, 2016, in all states regulated by federal OSHA. The federal changes will not automatically apply in “State Plan” states. But since regulations in State Plans must be at least as effective as federal OSHA requirements, penalties in State Plans may also be increased to match federal penalties.
Are you ready?
Here are some recommendations to make sure your facility is ready for an OSHA inspection:
- Evaluate your safety program
- Ensure your inspection frequency is adequate
- Verify training is up-to-date
- Confirm all paperwork and documentation is in order including:
- OSHA 300 Logs
- Written programs
- Medical evaluations and respirator fit-testing, if applicable
Do not become a statistic for OSHA’s new increased penalties. If you are uncertain about OSHA compliance, we can help. For more information, contact a KPA Risk Management Consultant or email [email protected].