OSHA to Increase Fines in 2016
The Occupational Safety and Health Administration (OSHA) is set to increase fines for the first time in 25 years. The Federal Civil Penalties Inflation Adjustment Act of 1990 exempted OSHA from increasing its fines to account for inflation. The Bipartisan Budget Bill signed into effect on November 2, 2015, by President Obama, includes a provision for OSHA to increase its fines. Under the provision, OSHA must increase its penalties by August 1, 2016, to account for current inflation rates, which would raise the current fines by about 80 percent.
Refer to the table below to see approximately how much the fines will increase.
|Other Than Serious||From $7,000 to up to $12,600 Per Violation|
|Serious||From $7,000 to up to $12,600 Per Violation|
|Willful||From $70,000 to up to $126,000 Per Day Per Violation|
|Failure to Abate||From $7,000 to up to $12,600 Per Violation|
|Repeated||From $70,000 to up to $126,000 Per Violation|
The bill allows for OSHA to increase its fines by issuing an interim final rule, meaning OSHA doesn’t have to issue a proposed rule, which is subject to a public notice and comment period before it can be finalized. An interim final rule also means that the fine increases will become effective immediately.
OSHA does have the option to implement a lower percentage increase, but implementing fine increases below the maximum estimated 80 percent requires a full process, meaning a public notice and comment period. OSHA most likely will implement the maximum increase to avoid the full rulemaking process.
OSHA is required to announce the fine increases by July 1, 2016, with the changes effective by August 1, 2016. Starting in 2017, OSHA is allowed to further increase the fines annually based on the inflation rates set by the Consumer Price Index. OSHA must announce the annual increases by January 15th of each year.
The 28 state-run OSHA programs are not addressed in the bill, but they are expected to be required to adjust their fines to match the new federal OSHA fine increases. Guidance is expected to be released in the near future.
Even with the 80 percent increase, OSHA fines still are much smaller than other government agencies. For example, the Environmental Protection Agency (EPA) imposes maximum penalties of $270,000 for violating the Clean Air Act and $1 million for tampering with a public water system. OSHA hopes that the increased fines will motivate employers to enforce all applicable standards and requirements.
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