A year-and-a-half ago, OSHA instituted new policies aimed at increasing average amounts for certain types of safety and health fines. After reviewing the results, the agency is making one change that actually will cut some businesses a break.
In a memo released last week, OSHA said its new policy on fines “performed as intended.” The average cost of fines has gone up.
However, the higher penalties have negatively impacted small businesses, particularly those with 1 to 25 employees.
To reduce that negative impact, OSHA will reduce fines for companies with 25 or less employees by a larger amount. The old reduction for these small employers was 40%. The new reduction will be 60%.
Example: Let’s say a company with 20 employees receives one serious violation with a potential maximum fine of $7,000. Under the old system, this fine could be reduced to $4,200. Under the new system, the fine can be reduced to $2,800.
The reductions aren’t guaranteed. Several factors are considered when reductions are made.
The rest of OSHA’s fines policy that was enacted in October 2010 stays in place, including:
- An employer that has been inspected by OSHA within the previous five years and has no serious, willful, repeat or failure-to-abate violations will receive a 10% “history” reduction
- Employers that have been cited by OSHA for any high gravity serious, willful, repeat or failure-to-abate violation within the previous five years will receive a 10% increase up to the statutory maximum
- High gravity serious violations related to standards in the Severe Violator Enforcement Program can be cited as separate violations, each with its own penalty, instead of being grouped together as just one violation
- Besides the previously mentioned company size reduction where there are 25 or less employees, companies with 26 to 100 workers can get a 30% reduction, and employers with 101 to 250 workers can get a 10% reduction
- The 15% Quick-Fix reduction in which an employer immediately abates hazards found during an inspection remains in place, and
- The minimum for a serious violation is $500.
The new small-business reduction takes effect with inspections conducted after April 1, 2012. Inspections conducted before that date, but not yet settled, will only be eligible for the old reduction.