OSHA Fines Get Boost Due to Budget Bill Provision

For the first time in 25 years, OSHA fines for safety violations will increase thanks to a scarcely-noticed provision in a recent budget bill signed by President Obama. The move comes in a consideration the rate of inflation since 1990, the last time OSHA fines were changed. The provision also guarantees that going forward the rate will adjust with inflation each year.

OSHA Fines Still Lower Than Most Agency Penalties

According to industry experts in both the safety field and labor experts, OSHA fines have been significantly lower over the years than other regulatory agencies, such as the Environmental Protection Agency.  This will continue to be true even though the increases will be up to 80% more than previous penalties. A specific effective date has not been set as to when the new rates go into effect, but it will be sometime in 2016.

In 1990, most Federal agencies were required to raise their penalty rates, but at that time OSHA was exempted. Some industry analysts were surprised by the increase that will see the maximum OSHA fines for severe violations jump from $75,000 to $100,000. Other, serious violations will move from an average of $7,500 to $12,000. However, due to some exemptions, maximum fines for repeat and serious offenders will likely drop, overall.’

Baruch Fellner, a well-known attorney that has represented industry interests in safety violations, admitted that it was hard to get upset over the new rates, “It’s very difficult to defend the present penalty structure. If you look at OSHA penalties in the context of other programs, they are in fact for individual items minuscule comparatively speaking. For larger corporations it can be a cost of doing business.”

Peg Seminario, a policy director for the AFL-CIO, seemed pleased, but more improvement is needed, “It’s progress. It’s bringing the penalties for worker-safety violations up to date.”

OSHA fines, in several cases last year, came under scrutiny. In one case, where a worker died, the company was only fined $7,000 and even that was reduced to just a little over $5,000 after settlement, which is typical. Mr. Fellner, was vocal regarding his vision, saying that  he was looking to increase OSHA fines to even  higher levels. The end result, he reasoned, would make OSHA enforcement easier for businesses overall.  The moved would make OSHA less likely to try to combine more minor citations in order to reach higher penalty amounts. Other industry analysts and consultants, however, disagreed, saying that higher OSHA fines would cripple small business.

The issue of higher fines isn’t a new one. Very similar provisions have been inserted into bills introduced by Democrats in Congress every session for more than a decade. However, the bills had attracted strong opposition from business groups, who claim workplace-safety violations would inhibit expansion and decrease jobs.