Beginning this summer, it is going to be substantially more expensive to violate the Occupational Safety and Health Administration’s (OSHA) standards. Penalties for violating U.S. Environmental Protection Agency (EPA) rules will also go up, but not as much as OSHA’s. Here’s why and what to expect for violations of safety standards.
The Bipartisan Budget Act of 2015 (the Act), which was signed by President Obama last November, eliminated the exemption for some agencies, including OSHA, to adjust the amount of civil penalties every 4 years to account for inflation. The Act also changed the requirement to adjust for inflation to every year. Since the EPA had not been exempt from the previous quadrennial requirement, which was established in 1996, penalties for violations of EPA rules will not see a significant jump. Penalties for violations of OSHA standards, which have not changed since 1990, are another matter.
Note. The adjustment is for civil penalties only. It does not include a penalty levied for violation of a criminal statute or fees for services, licenses, permits, or other regulatory reviews.
OSHA will publish an interim final rule on or before July 1, 2016, adopting the new penalties. It will go into effect no later than August 1, 2016. The Office of Management and Budget issued a convoluted memorandum with calculations on how much civil penalties should go up in order for OSHA penalties to “catch up” for 2016. Catch-up calculations are based on the year the penalty was established. Starting in 2017, OSHA will be adjusting penalty amounts annually based on inflation.
This table shows OSHA’s current and catch-up civil penalties:
|Violation||Current Maximum Civil Penalty||Catch-up Maximum Civil Penalty|
|Willful or repeated violation||$70,000||$124,709|
|Other than serious violation||$7,000||$12,471|
|Failure to correct a violation||$7,000 per day||$12,471 per day|
|Violations of posting requirements||$7,000||$12,471|
A few important points
- If you are inspected before the August 1 effective date of the adjusted penalties, but you receive an OSHA citation after the effective date, the newer penalty will apply.
- OSHA will continue to offset penalties for small businesses using a reduction factor based on the size of the employer.
- States with OSHA-approved programs will be required to increase penalties if their penalties are lower than the new OSHA penalties. State Plan states must have penalty levels that are at least as high as OSHA’s.
It is more important than ever not to view OSHA penalties as a “cost of doing business.” Safety.BLR.com® has hundreds of tips and training documents to help you be in compliance and avoid the increasing cost of violating OSHA standards.