OSHA penalties going up, up, up

OSHA penalties are increasing for the first time since 1990 and employers need to be aware and more cautious than in the past, writes Brent Soderstrum. This column appears in the February issue of EPM.
By Brent D. Soderstrum | January 14, 2016

On Nov. 2, President Obama signed a bipartisan budget bill that permits OSHA to institute a catch-up adjustment. The increase is effective Aug. 1 and subsequent annual adjustments for which the bill provides are to be based upon the Consumer Price Index.

The big question is, what will be the exact amount of the catch-up adjustments? Apparently, the CPI is approximately 80 percent higher than it was back in 1990, which is when OSHA penalties were last increased. However, this first increase in OSHA penalties could be much higher than 80 percent because the act sets the maximum adjustment at 150 percent of the current penalty structure. Thus, the potential penalty structure for maximum fines could be as follows: 

• Other than serious:  $12,600 to $17,500. The maximum is currently set at $7,000.
• Serious:  $12,600 to $17,500. The maximum is currently set at $7,000.
• Repeat:  $126,000 to $175,000. The maximum is currently set at $70,000.

Willful:  $126,000 to $175,000. The maximum is currently set at $70,000.
This first increase is not the end of it. The budget bill also requires OSHA to annually increase the monetary penalties based upon the percentage increase in the CPI from the previous year. As a result, every Jan. 15, OSHA will set new penalty amounts. Thus, employers need to pay attention.

OSHA’s increased penalties are intended to increase employers’ attention to the safety regulations by putting some teeth back into the monetary penalties. Regardless of the penalty increases, employers need to be prepared for OSHA to show up at their door for an inspection. It has been easy for employers to accept OSHA citations when the dollar amounts are reduced. However, with the increase in the penalty structure, a repeat violation can be quite devastating to a company. An employer may be cited for a repeat violation if that employer has been cited previously for a substantially similar condition and the citation has become a final order. The new citation has to be issued within 3 years of the final order of the previous citation or 3 years from the final abatement date of the citation, whichever is later.

Look over your safety manuals, make sure your employees are trained and be prepared for a work accident, an employee complaint to OSHA or even a programmed OSHA inspection. Know beforehand how you will handle an OSHA inspection. Also, don’t be too quick to settle an OSHA case even now, before the new penalty structure goes into place, since a possible repeat violation will have much more punch to it after Aug. 1. If you aren’t careful, an OSHA violation that you thought was a “good deal” can rear its ugly head again in the next three years and result in a single OSHA citation of up to $175,000.

Author: Brenton D. Soderstrum
Attorney, BrownWinick Law Firm