A surprising provision landed in the budget, catching both industry and labor groups off guard. Signed into law earlier this month, the new Federal budget includes a roughly 80% increase in fines for OSHA.
Assuming an 80% increase, the amount on par with inflation, the new fines will likely increase maximum fines for repeat and willful violations from $70,000 to $126,000 and severe violations from $7,000 to $12,600.
The increases are set to take place no later than August 1, 2016.
Matching Increases in Inflation
Highlighted in a recent article by SmithAmundsen Partner Matthew Horn, the major increase is based on fluctuations in the Consumer Price Index—of which OSHA was not subject to annual changes:
“The new federal budget recently passed included a surprising provision requiring OSHA and other federal agencies to increase their fines on an annual basis based on fluctuations in the Consumer Price Index (roughly, inflation).
The budget also requires OSHA to “catch up” its current fine levels to account for increases in the CPI over the last twenty-five years — the last time OSHA updated its fine schedule. Section 701 of the budget is the relevant Section, which can be viewed here.
It is worth noting that the budget was passed by the Republican-led Congress, signaling that even Republican lawmakers are amenable to the idea of using a larger, more aggressive OSHA to help generate additional revenue. This about-face makes it clear that regardless of the outcome of the 2016 elections, the “new,” more aggressive OSHA is here to stay.
Going forward, employers should start preparing for OSHA inspections now. The failure to do this will likely result in significant fines the next time OSHA comes knocking.”
According to Howard Mavity, a partner with the labor and employment law firm Fisher & Phillips, LLP,
“Once the catch-up is implemented, OSHA will then annually increase maximum penalties according to the rate of inflation for the prior fiscal year.”
“Rather than just treating safety as a cost center, you should work with your company safety professionals to develop a business plan to achieve your company’s goals in this area,” he advises.
Maximizing Your Return on Safety Matters Now More than Ever
With fines set to increase pending a formal ruling, a failed OSHA inspection could result in a much costlier year for employers.
This is why it’s absolutely critical for an employer to implement a safety management system that brings employees the protections they deserve and the productivity, engagement, and profitability you deserve.
Optimum Safety Management can help your organization to recognize the gaps in your current safety program, garner buy-in from both management and workforce, and implement a complete safety management program.
Contact Optimum Safety Management today for a consultation, and if you’re in immediate need, call our Safety Helpline at 1-866-70-SAFE-T (707-2338).