OSHA Fines Set to Rise in 2016
It has long been lamented by those trying to rein in employers with poor safety performance, that OSHA has not had the teeth to enforce regulations the way they need to be enforced. From understaffing to penalties that are miniscule compared to penalties imposed by other government agencies, fear of OSHA enforcement has taken a backseat to fear of insurance premium hikes, loss of insurance coverage, and lawsuits. For some time now, it seems to be those repercussions that have driven companies to compliance (obviously, there are companies that do it simply because they care about the well-being of their employees and do not need the threat of financial repercussions, but those companies also probably have little concern for penalty increases). Whether the driver behind compliance will change or not remains to be seen, but in 2016, OSHA will take steps toward making their penalties more of a force to be reckoned with.
Part of the reason OSHA’s penalties seem so small, aside from companies negotiating them down, is that they have not been adjusted for inflation in decades. While a $7,000 maximum penalty per exposed employee is nothing to be scoffed at, it doesn’t bear the same weight it did in the early 90s. So, on November 2nd of this year, President Obama signed the “Bipartisan Budget Act of 2015” which included provisions for the increase of OSHA penalties which basically allow them to “catch up” with the times. According to the act, the penalties could increase up to as much as 150% of their current levels. More than likely, though, since the increase can’t exceed the rate of inflation from the time the penalties were last adjusted in 1990, what we’re looking at is approximately an 80% increase. What this means is that the most serious penalties, like willful violations, could see an increase from a maximum of $70,000 per person exposed to $125,000. Your less serious violations would see an increase from a maximum of $7000 per person exposed to $12,500.
This, as always, depends on final rulemaking slated to take place in 2016. While that rulemaking could set a different cap for those penalties (and there are already organizations fighting this on such grounds as the burden it will place on small businesses), the 80% increase seems the most likely situation. The timetable has the final rule being issued July 1, 2016 with the fines going into effect no later than August 31 (though August 16 appears to be the target date). If you’re concerned, keep an eye on industry news and understand that if you are going to violate the law, it is soon to come with a heftier price tag.