OSHA Development

You likely heard of the new budget deal agreed to by Congress a week ago. This Federal Budget Agreement, which was worked out behind closed doors, includes surprise provisions authorizing the Occupational Safety and Health Administration (OSHA) to increase penalties for the first time since 1990. The Agreement requires OSHA to make a one-time “catch-up” increase to compensate for more than two decades of no increases. The catch-up increase can’t exceed the inflation rate from 1990 through 2015 as measured by the Consumer Price Index (CPI), but that is expected to be around 82%.

So – assuming OSHA applies the maximum catch-up increase allowed, the current maximum $70,000 fine for Repeat and Willful violations would grow to a maximum of $125,438, and the $7,000 maximum fine for Serious and Failure-to-Abate violations would increase to $12,744. After the one-time “catch-up” increase is implemented, OSHA will then annually increase maximum penalties the amount of the inflation rate for the prior fiscal year.

While nothing is ‘set in stone’ yet, it seems highly likely that OSHA will implement most, if not all, of the authorized increase. The initial penalty increases must become effective by August 1, 2016. The Federal Office of Management and Budget will issue guidance on implementing the bill’s provisions by January 31, 2016.

Obviously, this is a somewhat significant development and is incentive to carefully review and implement safety measures to avoid the increased penalty if possible. Employers will have slightly over nine months to take steps to minimize the impact of this development.