Yes, OSHA Penalties Are Going Up!

11.22.2015
HR & Safety

Jackson Lewis Attorney Tressi L. Cordaro’s blog post reports on The Bipartisan Budget Act of 2015, signed into law by President Obama on Nov. 2, 2015.
Section 701 of that law, “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015” requires OSHA to increase its civil penalties for the first time since 1990.
A one-time “Catch Up Adjustment” will occur in 2016 with penalties increasing up to a cap of 150%.
Increases will be calculated based on the Consumer Price Index between 1990-2015, and indications are that increases will be significant but less than the 150% cap.
The next step is that Dr. David Michaels, assistant secretary of labor for OSHA, will adjust civil monetary penalties through an interim final rulemaking, and the adjustment will come into effect by Aug. 1, 2016 at the latest.

Dr. David Michaels, OSHA assistant secretary of labor

OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business.

The Act contains an exception that allows an agency to adjust civil monetary penalties by less than the required amount if certain provisions are met and ultimately approved by the director of the Office of Management and Budget.
However, this seems an unlikely direction given Dr. Michaels statement last month before the Committee on Education and the Workforce, Subcommittee on Workforce Protections:
“Simply put, OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business.”
Other reports on this change in OSHA's penalty structure project that proposed fines will rise by about 80%, or an increase in the maximum penalty for a willful violation from the current $70,000 to about $127,000.
The maximum serious violation fine would increase from $7,000 to about $12,400.
A quote from the President's budget message for 2016 reveals the administration's view of the need for this change:
In addition, while enforcement and compliance resources are vital to improving adherence with our nation's labor and employment laws, many of these laws impose weak penalties or no penalties at all on employers who do not meet their responsibilities.
"The budget proposes to strengthen the Department of Labor's civil penalties, and also improve the Federal Civil Penalties Inflation Adjustment Act, which was established to maintain the deterrent effect of civil monetary penalties government-wide through timely and predictable inflationary adjustments but falls short of this goal as it is currently structured.”

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