Larger Fines Approved for Violations to the Occupational Safety and Health Act

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Preventing injuries, accidents and loss of life should always be the number one priority of companies. Beginning August 1, it will be more costly for companies if it isn’t.

For the first time since 1990, the Occupational Safety and Health Administration (OSHA) will increase the civil penalty amounts provided for violations to the Occupational Safety and Health Act.

Changes in the civil penalty amounts are the result of a Federal Civil Penalties Inflation Adjustment and Improvements Act. Provisions in this 2015 Inflation Adjustment ACT resulted in the following:

  1. Directed OSHA to modify its penalties through a catch-up adjustment to account for inflation.
  2. Established a system to increase penalties based on changes in the Consumer Price Index.

The 2015 Inflation Adjustment ACT gave OSHA the authority to increase the dollar amount of penalties. This was done to adjust for inflation. Last month, the Department of Labor—the parent of OSHA—published it final rule. Under that rule, OSHA increased its civil penalties by 78 percent.

Under this new rule, the top penalty for violations, excluding willful or repeat violations, will increase from $7,000 to $12,471. Willful or repeat violations will increase from the current $70,000 to $120,471.

U.S. Secretary of Labor Thomas E. Perez says that civil penalties should be a credible deterrent that influences behavior.

“Adjusting our penalties to keep pace with the cost of living can lead to significant benefits for workers and can level the playing field for responsible employers who should not have to compete with those who don’t follow the law,” Perez said.

Changes to OSHA’s fine structure are being introduced in two rules. The first covers the majority of penalties assessed by the Employee Benefits Security Administration, Mine Safety and Health Administration, Office of Workers’ Compensation Programs (OWCP), and Wage and Hour Division (WHD) as well as OSHA.

Additional penalties being raised are OWCP’s penalty for failure to report termination of payments made under the Longshore and Harbor Workers’ Compensation Act. That penalty will increase from $110 to $275. WHD’s penalty for willful violations of the minimum wage and overtime provisions of the Fair Labor Standards Act will increase from $1,100 to $1,894.

OSHA’s new penalty structure goes into effect on August 1, 2016. It will apply to penalties assessed after that date.