Safety and OSHA News

Federal budget includes first increase in OSHA fines in 15 years

It’s not a done deal yet, but it appears OSHA fines could increase in 2016 due to language in the federal budget bill that’s been agreed upon between Republicans in Congress and the Obama administration. The fines could increase almost 80% in one jump, and increase annually by the rate of inflation after that.

While bills have been introduced for years now that would increase the amounts of OSHA fines, it’s safe to say that no one saw this coming via the federal budget bill.

In a section of the bill titled, “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,” OSHA would be allowed a “catch up adjustment,” apparently dating back to the last time OSHA fines were increased in 1990 (see pages 39-45 of the budget bill).

From October 1990 to September 2015, the Consumer Price Index, upon which the increase would be based, rose 78.24%.

Applying that increase to the current maximum OSHA penalties would produce these results:

  • The maximum repeat or willful violation fine would increase from $70,000 now to $124,768, and
  • The maximum serious violation fine would increase from $7,000 to $12,477.

The bill calls for the adjustment to “take effect not later than August 1, 2016.”

Along with the one-time catch-up increase, OSHA penalties could increase each year using the CPI. The head of OSHA could choose not to increase fines the first year the new rules are in effect with the agreement of the Director of the Office of Management and Budget.

Allowing OSHA to make the one-time increase and future inflationary increases would put it in line with many other federal agencies that can increase fines by inflation, including the Food and Drug Administration, the EPA, the Equal Employment Opportunity Commission, the FCC, and several agencies under the Department of Transportation, including the Federal Highway Administration and the Federal Aviation Administration.

“Unscrupulous employers often consider it more cost effective to pay the minimal OSHA penalty and continue to operate an unsafe workplace than to correct the underlying health and safety problem,” OSHA chief David Michaels said about previous bills that would increase agency penalties.

The U.S. House and Senate have passed the budget bill with the OSHA provision. The bill waits for President Obama’s signature.

What do you think about a potential increase in serious OSHA fines to about $12,500 and willful and repeat fines to about $125,000? Let us know in the comments.

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Comments

  1. Thanks for the article, Fred.

    I’m trying to figure out what part of the bill led to determine that:

    “The head of OSHA could choose not to increase fines in a given year with
    the agreement of the Director of the Office of Management and Budget.”

    I see that there is an exception added in Section 701(b) where, for the first adjustment, the head of the agency may adjust by less than the required amount if OMB concurs. But I don’t see how it applies to any years after the first adjustment.

    Is this the provision you’re referring to, and does it apply after the first adjustment?

    ‘(c) Exception- For the first adjustment made under subsection (a) after
    the date of enactment of the Federal Civil Penalties Inflation Adjustment Act
    Improvements Act of 2015, the head of an agency may adjust the amount of a civil monetary penalty by less than the otherwise required amount if–

    `(1) the head of the agency, after publishing a notice of proposed
    rulemaking and providing an opportunity for comment, determines in a final rule that–

    `(A) increasing the civil monetary penalty by the otherwise required
    amount will have a negative economic impact; or

    `(B) the social costs of increasing the civil monetary penalty by the
    otherwise required amount outweigh the benefits; and

    `(2) the Director of the Office of Management and Budget concurs with
    the determination of the head of the agency under paragraph (1).’

  2. Do you have a specific law or regulation to cite for the part about “dating back to the last time OSHA fines were increased in 1990”? I’m trying to confirm that 1990 number somehow with an official source. Thank you.

Trackbacks

  1. […] penalties under the Occupational Safety and Health Act of 1970 (which created OSHA) are set to increase in 2016, however, criminal penalties have never been […]

  2. […] maximum penalties for worker injuries and deaths from $70,000 to $125,000 for willful violations. Serious violations increase from $7,000 to $12,500. In addition, OSHA will be required to review fines each year and […]

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