The Benefits of Penalties and More on OSHA Penalty Increase

DOL, 30 June 2016

Last year, Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 to advance the effectiveness of civil monetary penalties and to strengthen their deterrent effect.  Many of the penalties that Congress has entrusted the Department of Labor to assess had not been adjusted for years.

For example, penalties under the Occupational Safety and Health Act had not been raised since 1990, when a gallon of gas cost $1.20, a first class stamp was $0.25, and a dozen eggs went for $1.00.  Outdated penalties are a problem because civil penalties are less effective when they do not keep pace with the cost of living.

Penalties deter violations of the important laws that we enforce, which not only result in safer, more productive workplaces, but also in a more level playing field for responsible employers who have to compete with the minority who try to save money by evading the law.  That is why this law modernizing many penalties that have long lost ground to inflation is critical.

EHS Today, 30 June 2016

As of August 1, OSHA can increase the maximum penalty level for employers that violate occupational safety and health laws by as much as 78 percent.  But how effective is the threat of those increased fines if OSHA continues to negotiate settlements that decrease or even eliminate fines?  In November 2015, Congress enacted legislation requiring federal agencies to adjust their civil penalties to account for inflation.

The Department of Labor adjusted penalties for its agencies, including OSHA.  OSHA’s maximum penalties, which were last adjusted in 1990, will increase from $70,000 for a willful or repeated violation to $124,709 per violation.  Going forward, the agency will continue to adjust its penalties for inflation each year based on the Consumer Price Index. The maximum penalty for ‘Serious Other-Than-Serious Posting Requirements’ will jump to $12,471 per violation from $7,000, and the same fine will be issued per day for failure to abate violations.  The new penalties will take effect on August 1.  Any citations issued by OSHA on or after that date will be subject to the new penalties if the related violations occurred after Nov. 2, 2015.

 

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