OSHA Officially Increases Civil Penalties by 78 Percent

On June 30, 2016, the U.S. Department of Labor (DOL) announced its interim final rule on Federal Civil Penalties Inflation Adjustment Act Catch-Up Adjustments. The rule was formally published in the Federal Register on July 1.

The increase is the result of the Bipartisan Budget Act of 2015, signed into law on November 2, 2015. The Bipartisan Budget Act was the consummation of a deal reached in Congress to avoid a default on the nation’s debt. Surprisingly, the bill also contained the Inflation Adjustment Act, a provision that allowed federal agencies to annually adjust their civil penalties for inflation beginning with a one-time adjustment this year to catch up from the last time the agency’s civil penalties were modified.

For the Occupational Safety and Health Administration (OSHA), the last time Congress increased the agency’s civil penalties was 1990. Under the interim rule, the maximum penalties for workplace safety violations issued by OSHA will spike by 78.16 percent, effective August 1, 2016, as follows:

Other-than-Serious violation: from $7,000 to $12,471;
Serious violation: from $7,000 to $12,471;
Repeat violation: from $70,000 to $124,709;
Willful violation: from $70,000 to $124,709;
Failure-to-Abate violation: from $7,000 to $12,471 per day; and
Violation of a posting requirement: from $7,000 to $12,471.

The 78.16 percent figure represents inflation from October 1990 to October 2015. This increase closely tracks the Consumer Price Index, as we predicted last year.

State Plan States must also adopt these increases, according to the DOL. The federal Occupational Safety and Health Act (OSH Act) requires State Plans to be at least “as effective as” federal OSHA. What constitutes “as effective as,” however, is the subject of ongoing debate between OSHA and its state counterparts.

Limited Retroactivity

According to the DOL, the new civil penalty amounts will apply “only to civil penalties assessed after August 1, 2016, whose associated violations occurred after November 2, 2015, the date of enactment of the Inflation Adjustment Act.” In other words, for pending inspections that occurred before August 1, 2016, OSHA may wait until after August 1 to issue any citations and apply the higher penalty caps to those inspections.

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