As part of the budget bill signed into law by President Obama this week, Federal penalties for workplace safety violations were increased for the first time since 1990. The purpose of the increase is to bring fines in line with inflation over the past 25 years and to allow OSHA to raise fines accordingly with the Consumer Price Index in the future. The roughly 80% increase, one-time adjustment for 2016, to “catch-up” with current inflation rates, will bring maximum fines for the most severe citations to $125,000 from $70,000 and for other serious violations from $7,000 to $12,500. 
OSHA was one of only a handful of federal agencies that were specifically exempted from a 1990 bill that required federal agencies to raise their fines to keep pace with inflation. Raising potential OSHA fines has been a goal of lawmakers supporting the agency. “Indexing penalties for OSHA violations is a fair, common-sense step toward strengthening worker safety protections,” Sen. Patty Murray (D-Wash.), a senior member of the Budget Committee; Appropriations Committee; and Health, Education, Labor and Pensions Committee, told Bloomberg BNA Oct. 27 in an e-mailed response.
“It’s progress,” said Peg Seminario, who directs workplace-safety policy for unions under the AFL-CIO. “It’s bringing the penalties for worker-safety violations up to date. Increasing OSHA penalties has been considered and discussed, but never implemented, during budget negotiations in past years, Seminario said. Increased penalties will be particularly important where there are widespread serious or willful violations.”
Although OSHA fines continue to be significantly lower in comparison with fines from other regulatory agencies, such as the Environmental Protection Agency and the Department of Transportation, some industry representatives expressed concern over the impact of the rise in fines on small businesses. “This has the potential to have a pretty significant impact,” said Rob Matuga, who directs labor policy for the National Association of Home Builders. “Our housing industry is just making a comeback.”
For large organizations the increase may not carry the same weight. Even one prominent lawyer who has represented industry interests in workplace-safety issues for decades said he couldn’t argue with the increase. “It’s very difficult to defend the present penalty structure,” said Baruch Fellner, who has long represented industry interests on OSHA issues. “If you look at OSHA penalties in the context of other programs, they are in fact for individual items minuscule comparatively speaking. For larger corporations it can be a cost of doing business.”
The appearance of the OSHA provision was unexpected. Similar provisions had been inserted into bills introduced in Congress every session for a number of years. Those bills never moved forward due to opposition from business groups. Unlike the current changes, the previous bills had higher penalty options for violations that resulted in a worker’s death. The new fines will go into effect sometime in 2016; the final date for implementation has not yet been set. The bill can be read in full here.
What do you think about the proposed rise in fines? How will this increase impact your organization’s approach to compliance in 2016 and beyond?
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Sources:
Wall Street Journal, OSHA Fines to Rise for the First Time Since 1990, Berzon, November 3, 2015
Bloomberg BNA Occupational Safety & Health Reporter: News Archive, 10/29/2015, Enforcement: Maximum OSHA Fines Could Increase 82 Percent, Rolfson, Lee