As previously reported on this blog, starting this month OSHA has raised the maximum and minimum penalty ceilings for all violations by nearly 80 percent, affecting citations issued as far back as November 2, 2015. This change is compelled by the Federal Civil Penalties Inflation Adjustment Act of 2015 which raises the dollar amounts for penalties across federal agencies, not just OSHA. This increase also impacts OSHA State Plans, which are required to adopt penalty levels that are at least as effective as the Federal OSHA penalties. Twenty-six states plus Puerto Rico and the U.S. Virgin Islands have OSHA-approved State Plans. State Plans have six months following the adoption of increased penalties by Federal OSHA to adjust their own penalties to keep pace.
Going forward, OSHA will increase its penalty amounts annually to keep pace with inflation. OSHA has updated its Field Operations Manual to reflect these changes.
The government projects that in the first year of this increase, Federal OSHA will realize an additional $110 million in penalties. The same projection shows an estimated increase in penalties by $57 million for combined OSHA State Plans.
OSHA Criteria for Assessing Penalties
Despite these higher penalty ceilings, the basic formula of how OSHA determines what degree of penalty to assess will not change. OSHA will continue to assess penalties based on factors like size of a business, number of employees, severity of violation, and whether or not the violation is a first offense. For example, OSHA continues to issue policies that call for the reduction of penalties for smaller businesses. In April of 2012, OSHA modified its policy to reduce penalties for businesses with 25 or fewer employees down from 40 percent to 60 percent. So, under this latest penalty increase, while the amount of the penalty has the capacity to nearly double, it will still be reduced by 60 percent for very small businesses.
Likewise, the gravity of a violation will still be OSHA’s primary consideration when assessing and formulating the amount of a penalty. OSHA will assess the potential that an employee death, injury, permanent disability, or chronic condition might have resulted from the conditions resulting in the violation. OSHA will also look at the probability of these results occurring. Additional factors determining the size of a penalty will include the employer’s history of violations, and whether or not an employer has worked to correct those previous violations (if any existed).
Help Staying in Compliance
OSHA seems to acknowledge that these increased penalties may create added anxiety about the possibility of being cited. In this connection, it recommends businesses with these concerns take advantage of its On-site Consultation Program which provides individualized assistance to small businesses at no costs. Whatever your approach, it’s critical to make sure you’re taking steps to protect employees and avoid costly noncompliance fines. VelocityEHS can help with a full platform of solutions to simplify EHS management and compliance, including Chemical Management, Incident Management, On-Demand Training, Audit & Inspection, Risk Analysis, and more. You can contact us directly at 1.888.362.2007 to learn more.