The Occupational Safety and Health Administration (OSHA) is increasing its maximum penalties for workplace safety violations by over 78%.
|Type of Violation
||Current Maximum Penalty
||New Maximum Penalty
| Serious Other-Than-Serious Posting Requirements
|| $7,000 per violation
|| $12,471 per violation
| Failure to Abate
|| $7,000 per day beyond the abatement date
|| $12,471 per day beyond the abatement date
|Willful or Repeated
|| $70,000 per violation
|| $124,709 per violation
Effective Aug. 1, the maximum penalty for serious violations will increase from $7,000 per violation to $12,471. More notably, however, businesses should be aware that the ceiling for each willful or repeat violation will rise from $70,000 to $124,709.
While many businesses shudder at the thought of the higher penalties, many groups argue that OSHA’s penalties haven’t been high enough to effectively deter violations. The penalty increase was put into the Bipartisan Budget Act of 2015 and was passed and signed into law without much discussion or debate about the levels.
The maximum penalties were last adjusted in 1990, so this is the initial catch-up increase to reflect inflation over the past 25 years. In the future, OSHA will make annual adjustments to the penalties based on the consumer price index.
Employers should focus on avoiding these high penalties by being compliant with OSHA standards and committed to having an effective safety program, and instill a culture of safety from the very beginning of employment with a strong safety training program.
Penalties Adjusted for Inflation
President Obama signed the bipartisan budget act on Nov. 2, 2015. The budget included a section that required federal agencies to adjust civil monetary penalties based on inflation by Aug. 1.
As a result, it isn’t just OSHA penalties that are increasing. The U.S. Department of Labor also announced penalty adjustments under the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Family and Medical Leave Act. There are also new overtime rules that businesses need to be aware of as they track employee hours.
Although the penalty increases under these acts take effect on Aug. 1, the higher penalties may be imposed in ongoing investigations if the violation occurred after Nov. 2, 2015.
OSHA must issue citations within six months of the violation, so violations that occurred as far back as February could be subject to the new penalties.
More OSHA Activity
In addition to increasing penalties, OSHA issued a new injury and illness tracking (recordkeeping) rule that will take effect on Jan. 1, 2017. The rule will require employers that are covered by the agency’s record-keeping regulations to electronically submit workplace incident reports. Some of that information will be available to the public on the agency’s website.
The rule includes anti-retaliation provisions, which the agency will begin enforcing in November.
The penalty that immediately catches the attention of most stakeholders is the increase for repeat and willful violation. Employers certainly want to avoid these violations, but they should be aware that a single willful or repeat violation could now cost them six figures.
It’s really going to be a big change on the low end, too, because it may only take one or two citations for the penalties to be over $10,000, a number that is significant for many businesses.
OSHA often evaluates a variety of discount factors and will continue to provide penalty reductions based on the size of the employer and other factors.
Tips for Compliance
Employers should take steps to ensure they have strong safety and health programs, and they should follow up on any potential safety hazards. There are many things employers can do that are not too expensive or time-consuming but that can greatly enhance safety programs and reduce injuries.
Employers should look at what OSHA standards are applicable to their worksite and address them. There are many programs out there such as having a safety consultant come in to evaluate and provide recommendations for improvement within a business.
The Automotive Industries Compensation Corporation (AICC) continues to lead the charge for businesses looking to bring in the best in class safety policies and procedures. Not only that, but the AICC offers huge up-front premium discounts and pays members back dividends each year, as a testament to the strength and success of the group. With NARFA and the AICC, you’ll always win, reduce your costs, and be able to focus on growing your business.
NARFA is a trade association serving the automotive, roads, fuel, and related industries. Since 1929 our power in numbers continues to help hundreds of businesses get the best employee benefit programs and much more.
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