Larger OSHA Fines, Here We Come

OSHA Violation Fees to Increase 78% starting August 1, 2016

If you think OSHA fines are high now, wait till August 1, 2016. OSHA fees will be increasing for the first time in 25 years, with the Feds requiring OSHA to publish its first projected inflation adjustment by July 1, 2016, and fees to become effective by August 1, 2016. Because OSHA hasn’t raised its rates to reflect inflation since 1990, the new ruling can account for this period of non-adjustment, which will be an increase of 78%. The Department will also adjust its penalty levels annually based on the Consumer Price Index.

This all stemmed from Congress passing the Bipartisan Budget Act of 2015 on November 2 of last year, requiring federal agencies like OSHA to adjust their civil money penalties based on inflation. Congress directed that the adjusted amounts apply to all penalties proposed or assessed after August 1, 2016. The act was intended to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect, according to the OSHA penalties page of the organization’s website.

If companies are participating in an inspection that may extend beyond August 1, 2016, any proposed penalties will reflect the Congressionally directed adjustment. OSHA has developed a fact sheet on the new ruling.

Increases May Continue to Rise Along with Inflation

According to the OSHA Training Institute, “in addition to the catch-up adjustment this year, the bill allows OSHA to continue raising fines annually to keep pace with inflation. While most statute violation penalties have been inflated every four years, OSHA and a few other federal agencies were previously exempted from raising their fines under the Federal Civil Penalties Inflation Adjustment Act. Moving forward, businesses can expect to see these annual increases by no later than January 15 of each year. The goal of this new change is to keep the fines up-to-date as a relevant penalty.”

What Should Businesses Do?

OSHA fines are only assessed when businesses fail to comply, and rather being viewed as a financial inconvenience, or the cost of doing business, the increased fees are designed to prioritize worker safety and OSHA enforcement. The best way to avoid the OSHA increases is a hefty dose of prevention.

As the Institute points out, “now is a great time for businesses to review their safety programs, update worker training and implement procedure updates to ensure standard enforcement.” Some companies may consider a Compliance Assessment Service, in which a specialist walks through a facility before an OSHA Inspection is conducted to see what violations may be lurking. Jeff Woods, Graphic Products’ Safety Compliance Analyst, offers up the following perspective:

“Many times a fresh pair of eyeballs can pick out an issue that may be overlooked, or just by asking a question an issue can be uncovered,” he said. “It seems that anything we pay close attention to and study with theory and measurement can be improved, or at the least remain static in regard to safety.”

The OSHA Training Institute also suggests companies prepare by looking at Top OSHA Citations, to assess whether workers experience any of the hazards associated with these top violations and by addressing them as a first step in re-evaluating safety programs. For more on top 10 OSHA violations last year, check out our free guide.

While small businesses face the same obligations to protect workers as larger companies, OSHA recognizes that the increased penalties may impact smaller businesses disproportionately. In order to offset that, OSHA’s penalty structure will continue to provide a reduction factor based on the size of the employer.

How Much are We Talking? Potential 2016 Maximum Penalties

According to the US Department of Labor, the rules published under the 2015 law will modernize some penalties that have long lost ground to inflation:

• OSHA’s maximum penalties, which have not been raised since 1990, will increase by 78 percent. The top penalty for serious violations will rise from $7,000 to $12,471. The maximum penalty for willful or repeated violations will increase from $70,000 to $124,709.
• OWCP’s penalty for failure to report termination of payments made under the Longshore and Harbor Workers’ Compensation Act, has only increased $10 since 1927, and will rise from $110 to $275.
• WHD’s penalty for willful violations of the minimum wage and overtime provisions of the Fair Labor Standards Act will increase from $1,100 to $1,894.

Protect Your Company with Enhanced Visual Communication

Constantly paying OSHA fines is no way to run a business, and it’s not a safe way to operate either. Concise visual communication can keep businesses running efficiently and safe, and  Graphic Products offers practical solutions including DuraLabel industrial label printers, custom labels and signs, and even specialized label supplies for extreme environments.