OSHA fines are set to increase for the first time in 25 years — and many experts are saying that could mean an increase as much as 80%. The bipartisan budget deal signed by President Obama in November requires the federal Occupational Safety and Health Administration to begin imposing higher penalties in 2016. “Simply put, OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business,” Dr. David Michaels, the director of OSHA, said in October before the House Committee on Education and the Workforce’s Subcommittee on Workforce Protections.
The law permits a one-time “catch-up adjustment” increase up to 80 %, since fines have not been raised since 1990. This “catch-up” amount is tied to the inflation rate from 1990 to 2015. After that, the maximum penalties would increase with the inflation rate every year.
OSHA is not required by the new provision to raise its penalties to the maximum, however, and the agency may use its discretion on amounts for individual citations. However, if OSHA does implement the maximum increase allowed, the new penalty structure would increase from current:
- $7,000 to $12,600 for other-than-serious violations.
- $7,000 to $12,600 for a serious violation.
- $70,000 to $126,000 for a willful violation.
- $70,000 to $126,000 for a repeat violation.
OSHA is required to pass an interim final rulemaking to finalize the catch-up adjustment. However, the budget bill provides for the increase be issued as an interim final rule. This means that OSHA does not have to issue a proposed rule, which would be subject to a public notice and comment period before being finalized. Instead, the rule becomes effective immediately.
The budget changes go into effect July 1, 2016 and the increased penalties will take effect by August 1, 2016 in all states regulated by Federal OSHA. The law does not automatically apply to states regulated by State Plans, but since State Plan programs must be at least as effective as Federal OSHA, State Plans are likely to increase civil penalties as well.
This potentially substantial increase in OSHA fines is a good time to evaluate the effectiveness of your safety program. A safety program is not just a binder on a shelf and safety gear — it’s a living system and culture that reduces accidents and saves lives.