OSHA Fines Increasing in 2016

Employers beware!  For the first time in a quarter century, in 2016, OSHA will increase its fines for safety violations.  The fines will increase almost 80% in one jump, and increase annually by the rate of inflation after that.

In a section of the bill titled, “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,” OSHA would be allowed a “catch up adjustment,” apparently dating back to the last time OSHA fines were increased in 1990 (see pages 39-45 of the budget bill).  Assuming an 80% catch up adjustment, starting August 1st, 2016, new maximum penalties would be as follows:
  • “Other Than Serious” citations — where there is a direct relationship to job safety and/or workplace health, but it is unlikely to result in death or serious bodily injury —  have a current maximum fine of $7,000, but are expected to increase to approximately $12,500 each;
  • “Serious” citations — where there was a death or serious bodily harm and the employer knew or should have reasonably known about the hazard — have a current maximum fine of $7,000, but are expected to increase to approximately $12,500 each;
  • “Willful” citations — where an employer knows it is in violation of OSHA standards and is aware of the hazardous condition, and makes no reasonable effort to remedy the condition — have a current maximum fine of $70,000, but are expected to increase to approximately $125,000 each; and
  • “Repeat” citations — where an OSHA standard is violated after the initial charge for the same or similar breach — have a current maximum fine of $70,000, but are expected to increase to approximately $125,000 each.

After the initial catch up adjustment, OSHA will be required to implement annual cost of living increases (CPI).  The adjustment would be tied to the year over year percentage increase in the CPI. Adjustments must be made by mid-January each subsequent year.

The changes in the budget go into effect on July 1, 2016, with the new penalties coming into effect by August 1, 2016.

“Unscrupulous employers often consider it more cost effective to pay the minimal OSHA penalty and continue to operate an unsafe workplace than to correct the underlying health and safety problem,” OSHA chief David Michaels said about previous bills that would increase agency penalties.

The U.S. House and Senate have passed the budget bill with the OSHA provision. The bill waits for President Obama’s signature.