In case you hadn’t heard, OSHA increased the cost of penalties by 78% back in August of 2016, and another 2% increase came your way just January 15 of this year. Further increases, tied to the Consumer Price Index can be expected every January 15 unless the law changes.
Where did this increase come from and why?
The Origin of the 78% Increase
The legislation that started the ball rolling was the Bipartisan Budget Act of 2015. Part of that act amended another — the Federal Civil Penalties Inflation Adjustment Act of 1990. Yet another piece of legislation going by the even lengthier name, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, finally kicked off a requirement that has sent the penalties of OSHA soaring.
OSHA had not increased the cost of its fines since 1990.
OSHA had not increased the cost of its fines since 1990. When the 78% increase was implemented, it was the first time in 26 years OSHA had raised penalties. Section 701 of the Adjustment Improvement Act of 2015 required the heads of federal agencies to adjust the civil monetary penalties or to “catch penalties up” to the Consumer Price Index. In other words, OSHA implemented a cost of living raise to its penalties.
The increases did not stop there. The Improvements Act went on to mandate annual adjustments to be implemented by January 15 each year so penalties would increase at the pace of inflation. The 21 states that maintain their own occupational health and safety agency are expected to follow suit.
It could have been worse. The limit on the inaugural increase was 150% of the original penalty amount. OSHA’s chief chose to adopt an increase that was a little over half that.
New Maximum Penalties for 2018
OSHA classifies violations as other than serious, serious, failure to abate, willful, and repeat.
$319 – the amount of the increase for serious and other than serious violations.
$12,934 – the new maximum penalty for serious, other than serious, and failure to abate violations
$2,587 – the amount of the increase for willful and repeat violations.
$129,336 – the new maximum penalty for willful and repeat violations.
Failure to abate penalties match those for serious and other than serious violations but are charged per day beyond the expected abatement date.
To provide some perspective, in 1990 the maximum fines for serious and other than serious was $7,000. The maximum fine for willful and repeat violations was $70,000.
OSHA Meets the Challenge of a New Administration
A new President of the United States entered office on January 20, 2016 and in due course began honoring a campaign promise to reduce the size of the federal government. The already sluggish pace of hiring became glacial. When OSHA lost 40 inspectors through attrition and made no new hires to fill the vacancies as of October 2, 2017, the agency needed to make some changes in where it emphasized its enforcement efforts.
The result is that OSHA has prioritized high risk workplaces for most of its attention. That meant construction makes the top of the list due to an elevated rate of fatal accidents, illnesses, and serious injuries. In 2017, despite the decrease in its labor force, OSHA inspections increased for the first time in five years.
What Should You Do?
If you have not done so already, it is past time to implement a safety and health policy for your company complying with federal regulations. Follow best practices to reduce the number and seriousness of workplace accidents on your construction sites. Conduct your own safety audits regularly to ensure each jobsite is as safe as you can make it.
Conduct your own safety audits regularly to ensure each jobsite is as safe as you can make it.
Minimize your chances of a citation. Stay abreast of regulatory changes such as the one that kicked off the current increase in penalties. Update your safety manuals and training programs to match. Be consistent in enforcement and documentation.
Accidents happen. It is up to you to create a safe workplace. If you need motivation, consider whether you will have a business at all if you are hit with one or more of those $12,934 fines.