OSHA Max Penalties Set to Nearly Double

By Eric Conn - The OSHA Defense Report - Conn Maciel Carey

The much publicized two-year bipartisan budget agreement allowed the federal government to remain open and not default on the U.S. debt, but it also contained lesser known provisions, including one that requires an approximately 80 percent increase in Occupational Safety and Health Administration penalties in the next year, as well as indefinite periodic increases to match the rise of the cost of living in the future.

The “Bipartisan Budget Act of 2015” was passed by both houses of Congress and signed into law by President Obama last week (November 2nd). Section 701 of the Budget Act, entitled “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,” gives OSHA the green light to increase penalty amounts to catch up with cost of living adjustments since the last time OSHA’s civil penalties were raised (1990).

The Civil Penalties Adjustment section of the 2015 budget bill was hammered out between Speaker Boehner and the White House with apparently no input from House or Senate members. It provides for a one-time “Catch-up Adjustment” that must be implemented by no later than August 1, 2016. The catch-up adjustment is tied to the percentage rise in the Consumer Price Index (CPI) from the time OSHA last increased its civil penalties in 1990 through November 17, 2015. The actual percentage increase will not be known until next week, but based on recent CPI trends, the increase is expected to be approximately 80%.

Assuming a penalty inflation adjustment of approximately 80%, OSHA will be imminently increasing the maximum civil penalty for alleged Serious violations from $7,000 per violation to approximately $12,000, and for alleged willful or repeat violations from $70,000 per violation to approximately $120,000. After the initial catch-up increase, OSHA is also authorized by the law to continue to adjust penalties upward as the CPI continues to rise year after year. The law does, however, cap the penalty increase at 150%.

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