The Occupational Safety and Health Administration is authorized to increase penalties for the first time in 25 years, according to part of the federal budget deal signed into law earlier this week. And it’s not just a small increase – OSHA’s penalties are expected to rise by nearly 80 percent.
Since 1990, OSHA’s penalties have looked the same. Now, under the new Bipartisan Budget Act of 2015, those numbers will rise quite a bit.
- Willful Violation = Minimum of approximately $8,912; Maximum of approximately $124,765 (current min is $5,000, max $70,000 per violation)
- Serious = Maximum of approximately $12,476 (current max is $7,000 per violation)
- Other-Than-Serious = Maximum of approximately $12,476 (current max is $7,000 per violation)
- Failure to Abate = Maximum of approximately $12,476 per day (current max is $7,000)
- Repeat = Maximum of approximately $124,765 (current max is $70,000 per violation)
The act requires OSHA to adjust its penalties annually based on the Consumer Price Index (CPI). The initial catch-up adjustment amount will be the percentage difference between the CPI in 2015 versus the CPI in 1990, which was the last year that OSHA’s fines were revised.
The new maximum penalties will be effective by August 2016. After that, OSHA will be required to make adjustments each year using the CPI. This probably means that penalties will rise even more annually (after 2016) to adjust with inflation.
What does this mean for employers? They now have an added financial incentive to maintain a safe workplace.