Cal/OSHA Follows Federal Example and Increases Penalties

It has been two years since Congress enacted enacted legislation requiring federal agencies to adjust their civil penalties to account for inflation. This resulted in the first increase in federal OSHA’s penalty amounts since 1990 – beginning with a whopping one-time increase of 78%. For federal OSHA, the new penalties went into effect for citations issued on or after after August 1, 2016. In accordance with the new law, those penalties were adjusted upward again, for inflation, on January 13, 2017.

States with state plans, like California, are required to implement programs that are “at least as effective” as federal OSHA’s, which generally means that they have six months to follow any lead that federal OSHA sets, and to implement any changes or updates that OSHA implements. In California, there was some initial debate over whether federal OSHA’s penalty structure actually applied to states – or even to OSHA itself, given that the rule requiring the penalty increase was at odds with the unaltered Occupational Safety and Health Act.

Federal OSHA’s position was that it did apply to state-plan states, and this month, California finally followed suit, amending its own penalty statute, 8 CCR 336, to increase statutory penalty amounts. The new penalty structure went into effect on September 14, 2017.

The updated penalties were set at OSHA’s August 11, 2016 levels, rather than the inflation-adjusted January, 2017 levels, meaning that:

• The maximum penalty for general and regulatory violations has increased from $7,000 to $12,471.
• The minimum penalty for willful violations has increased from $5,000 to $8908, and the maximum penalty has increased from $70,000 to $124,709
• The minimum and maximum penalties for serious violations in California were already higher than federal OSHA’s newly-adjusted maximum penalty of $12,675. The minimum penalty for a serious violation in California remains $18,000, and the maximum remains $25,000. However, separate penalty requirements for serious violations of the tower crane and carcinogen use standards, which were set at $2,000, have been removed.
• Likewise, California’s existing maximum penalty for failure-to-abate, $15,000 per day, already exceeded federal OSHA’s newly-adjusted maximum penalty of $12,675, and has not been changed. For serious violations of a crane standard, order, or special order that have lead to death or serious injury, the maximum penalty of $14,000 per calendar day has not changed.

As with federal OSHA, the affected penalty amounts are expected to be adjusted for inflation in January of each year based on the Consumer Price Index.

Although the maximum penalty amounts have, in some cases, risen steeply, employers should note that minimum penalties, for the most part, have not, and penalty adjustment factors also remain unchanged.