For those who follow federal OSHA news, this may be a disappointment even if it isn’t a shock: the Commonwealth of Virginia is raising its State Plan maximum penalties for occupational safety and health violations.
Virginia is one of 26 states operating under an OSHA-approved State Plan. State Plans are required to “remain at least as effective” as federal OSHA in order to maintain their autonomy, but state administrators sometimes disagree as to the “effectiveness” of federal regulations. In particular, several states objected to the large increase in civil penalty amounts that occurred in August of 2016 and declined to adopt them, partially on the basis of believing that state penalties do not have to be as high as federal penalties in order to be “at least as effective.”
Prior to 2016, federal penalties were last adjusted in 1990, leaving them untouched by inflation for over two decades. 2015’s Bipartisan Budget Act mandated penalty increases commensurate with cost-of-living increases over those decades, resulting in a 78.156% rise in federal maximum penalties. The Act also eliminated the previous practice of rounding penalty amounts down to the nearest $1,000, and instead instituted a system of rounding to the nearest $1. The maximum penalties were adjusted for inflation once more in January of 2017.
In their Final Rule establishing the 2017 increases, the Department of Labor (DOL) addressed the objections of State Plan administrators, pointing to Congress’ determination that, having gone unchanged for decades, “the impact of many civil monetary penalties has been and is diminished due to the effect of inflation.” The DOL also pointed out that State Plans had historically matched OSHA’s maximum and minimum penalties, indicating that they previously understood penalty matching to be required under the “at least as effective” standard.The Final Rule conclusively stated that “all State Plans must increase their maximum and minimum penalty levels to be at least as high as OSHA’s initial catch-up maximum and minimum penalty levels,” as published in the Code of Federal Regulations.
Virginia officials said last year that they would most likely increase their penalties in accordance with OSHA maximums. However, rather than adopt the increased penalty by regulation as federal OSHA did, the state sent it to the Legislature. During the 2017 legislative session, both the House and Senate voted overwhelmingly to amend the Code of Virginia to reflect the 2016 federal OSHA penalty amounts:
- Serious or other-than-serious violations: $12,471
- Failure to abate (per day): $12,471
- Willful or repeated violations: $124,709
The penalty increases will be effective July 1, 2017.
In addition, they added a new provision stating that beginning in 2018, civil penalties will be adjusted each year by the Commissioner of Labor and Industry according to the percentage increase in the Consumer Price Index. The penalty adjustments will be effective on each August 1.
As observant Virginia employers already know, the state’s mandatory Job Safety and Health Protection posting contains a section on proposed penalty amounts which displays the maximums for both civil and criminal penalties. We here at CPC will be keeping an eye out for Virginia to release an updated version of this posting to comply with the amended law once it goes into effect.