The Federal Occupational Safety and Health Administration (“OSHA”) is set to increase its maximum penalties effective August 1, 2016. A provision to raise OSHA fines was included in the budget agreement (H.R. 1314) by Republican and Democratic lawmakers and passed by Congress last week.
Increases on the Horizon?
The law gives OSHA discretion to adjust penalty amounts to something less than the maximum authorized by Congress, and officials at the agency have not determined just how significantly maximum penalty amounts will increase from the current caps of $7,000 for a “serious” violation and $70,000 for a “willful” or “repeat” violation. Congress has authorized increases tied to the increase in the Consumer Price Index since penalties were last raised (i.e., up to 82% times current penalty amounts based on current CPI). Thus, based on the present calculus, the penalty amount for a “serious” violation could increase to approximately $12,740, and the penalty for “willful” and “repeat” violations could increase to approximately $125,740. Based on the amount of penalties assessed in fiscal year 2014, increasing penalties to the maximum would have generated nearly $120 million of additional revenue to finance government operations, including OSHA’s operations.
Before raising penalty amounts, the law requires the White House Office of Management and Budget (“OMB”) to issue guidance by January 31, 2016 detailing the procedures for implementing the law’s provisions, and OSHA must publish an interim final rule by July 1, 2016.
Bottom Line
The cost of an unsafe workplace may keep going up. We will continue tracking developments in this area.