OSHA Penalties Increasing Summer 2016

Earlier this month President Obama signed into law the Bipartisan Budget Act of 2015 (Budget Act). Among other things, the act provides for mandatory increases in the penalties for violations of standards established under the Occupational Health and Safety Act. The act calls for an initial penalty adjustment that will reflect the increase in the cost of living since the last time OSHA penalties were adjusted in 1990. The amount of the “catch-up” adjustment will be measured by the percentage difference between the CPI in October 2015 and the CPI in October 1990. Beginning in 2017, OSHA penalties will be indexed to annual changes in the Consumer Price Index (CPI).

The initial adjustment is expected to reflect a CPI increase of about 78%. Rounded, estimates of the penalty increases are:

  • Other-than-Serious Violations – Maximum penalty $12,500. The current maximum is $7,000.
  • Serious Violations – Maximum penalty $12,500. The current maximum is $7,000.
  • Repeat Violations – Maximum penalty $125,000. The current maximum is $70,000.
  • Willful Violations – Minimum penalty $9,000; maximum penalty $125,000. The current minimum is $5,000; the current maximum is $70,000.
  • Failure-to-Abate – Maximum penalty $12,500 per day. The current maximum is $7,000.

These numbers are only predictions. The act does provide an initial adjustment alternative. OSHA can increase the initial penalties by less than the formula through formal rulemaking if it finds that increasing the penalties by the required amounts will have a negative economic impact or that the social costs outweigh the benefits. OSHA is required to announce the initial penalty amounts by July 1, 2016 and they are to take effect by August, 1, 2016. After that, OSHA is required to adjust the penalties by January 15 of each year using the CPI.

Employers should be aware that states operating their own OSHA-approved occupational health and safety plans will also be required to adjust their state-plan penalties so they at least equal those imposed under federal OSHA standards.  CPC will be monitoring state occupational health and safety postings for updates in the coming months. Stay tuned.

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