OSHA Fines to Increase Significantly for First Time in 25 Years

A new provision signed into law by President Obama as part of last November’s bipartisan budget deal will allow the Occupational Safety and Health Administration (OSHA) to increase the maximum penalty for employers who are found to have violations with their current safety and health programs. The provision was part of Section 701 of the Bipartisan Budget Act of 2015, titled the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The increase is expected to take effect on August 1, 2016.

The Impact

OSHA has not adjusted their penalty structure since 1990. The new act allows for a “catch-up adjustment” period to align with the federal consumer price index (CPI). The catch-up increase is capped at 150% of current OSHA penalty levels.

The maximum initial “catch up adjustment” will be based on the difference between the October 2015 CPI and the October 1990 CPI. The October CPI was released in November and came in at 237.838. Based on the October 1990 CPI of 133.500, the maximum catch up adjustment will be approximately 78.16%. The new maximum penalties are shown in the chart below.

Violation Type Current Violation Maximum 78.16% Increase
Non-Serious $7,000 $12,741
Serious $7,000 $12,741
Willful or Repeat $70,000 $124,709

While OSHA has the option to select a lower catch-up adjustment than the maximum permitted, most experts in the industry view this as unlikely. However, the act does give OSHA the discretion to increase the current maximum penalty amounts by less than the recommended adjustment if it determines that a full violation increase will have the following:

  • Have a negative effect on the economy.
  • Result in social costs that outweigh the benefits of a full increase.

After this initial increase in August, penalty amounts will be adjusted annually for cost of living.

Take Steps to Prepare Now

If your business or organization has had OSHA violations in the past, now would be a good time to review these incidents and make sure that you have processes in place to avoid similar or repeat offenses. The significant increase for violations could have a detrimental impact to your company’s bottom line — even from one incident.

At United Heartland, we can help you evaluate and prepare for OSHA inspections. We encourage you to view this webinar, led by UH Senior Loss Control Consultant Jackie Torgerson, who shares tips on preparing for OSHA visits and how employers can conduct their own mock inspections. Or contact your loss control consultant to obtain resources and tools to evaluate your current safety program.

OSHA’s Top 10 Citations

Curious what the most frequent OSHA citations are? Here are top 10 citations from 2014 and links to more details on each applicable regulation:

  1. Fall protection, construction (29 CFR 1926.501)
  2. Hazard communication standard, general industry (29 CFR 1910.1200)
  3. Scaffolding, general requirements, construction (29 CFR 1926.451)
  4. Respiratory protection, general industry (29 CFR 1910.134)
  5. Powered industrial trucks, general industry (29 CFR 1910.178)
  6. Control of hazardous energy (lockout/tagout), general industry (29 CFR 1910.147)
  7. Ladders, construction (29 CFR 1926.1053)
  8. Electrical, wiring methods, components and equipment, general industry (29 CFR 1910.305)
  9. Machinery and Machine Guarding, general requirements (29 CFR 1910.212)
  10. Electrical systems design, general requirements, general industry (29 CFR 1910.303)