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CONSTRUCTION FIRMS
Will Face Higher OSHA Fines in August
CONSTRUCTION
COMPANIES WHO ARE
ISSUED CITATIONS
FOR VIOLATING
OSHA’S REGULATIONS
AND STANDARDS
ARE GOING TO FEEL A
BIGGER PAIN IN THEIR
WALLETS BEGINNING
AUGUST 1ST. FOR
THE FIRST TIME IN
OVER 25 YEARS,
THE MAXIMUM CIVIL
PENALTIES FOR OSHA
VIOLATIONS ARE SET
TO INCREASE BY 78%.
AN EXEMPTION IN
THE FEDERAL CIVIL
PENALTIES INFLATION
ADJUSTMENT ACT
OF 1990 PROHIBITED
OSHA AND OTHER
AGENCIES FROM
INCREASING CIVIL
PENALTIES DUE TO
INFLATION.
That all changed when the Bipartisan Budget
Act of 2015 was passed by Congress and signed
into law last November. The bill included the
Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015, a provision that would allow
a one-time catch-up adjustment for federal agencies
to adjust their civil penalties based on inflation since
their last increase. Subsequent increases will be tied
to year-over-year inflation increases.
For OSHA, the catch-up adjustment will be based on
the percentage increase in the Consumer Price Index
(CPI) from October 1990 to October 2015 which was
roughly 78.16%. As required by the Inflation Adjustment
Act, the Department of Labor issued an interim
final rule on June 30, 2016, regarding the new penalties
for a number of its agencies, including OSHA, that
took into effect on August 1, 2016.
The current maximum penalty for a willful violation
or a repeat violation will increase from $70,000 to
$124,709. The minimum penalty for willful and repeat
violations is set to increase from $5,000 to $8,908. Maximum
penalties for serious violations and other than
serious violations will increase from $7,000 to $12,471.
Type of OSHA Violation
Min. Penalty Max. Penalty Min. Penalty Max. Penalty
Prior to 8/1/16 Prior to 8/1/16 After 8/1/16 After 8/1/16
Serious Violation N/A $7,000 N/A $12,471
Other Than Serious N/A $7,000 N/A $12,471
Willful or Repeated $5,000 $70,000 $8,908 $124,709
Posting Requirement N/A $7,000 N/A $12,471
Failure to Abate N/A $7,000 N/A $12,471
Here’s a brief rundown of each type of violation according
to OSHA:
• Other-Than-Serious Violation – A violation that
has a direct relationship to job safety and health,
but probably would not cause death or serious
physical harm.
• Serious Violation – A violation where there is
a substantial probability that death or serious
physical harm could result.
• Willful Violation – A violation that the employer
intentionally and knowingly commits. The employer
is aware that a hazardous condition exists,
knows that the condition violates a standard or
other obligation of the Act, and makes no reasonable
effort to eliminate it.
• Repeated Violation – A violation of any standard,
regulation, rule, or order where, upon reinspection,
a substantially similar violation is found and
the original citation has become a final order. Violations
can bring the maximum penalty for each
such violation within the previous three years.
• Failure to Abate – Failure to correct a prior violation
may bring a civil penalty of up to the maximum
for each day that the violation continues
beyond the prescribed abatement date.
The increased fines apply to all penalties assessed after
August 1, 2016, and will cover all violations that occurred
after November 1, 2015. Companies that have
been issued citations after November 2, 2015, but
have yet to be assessed a penalty are probably keeping
their fingers crossed that whatever fines they are
facing get handed down prior to the end of the month
to avoid the new higher rates.
OSHA is also requiring that the 22 states and territories
with their OSHA-approved State Plans covering
state and local government employees and the
private sector increase their penalties to match the
increases being made by OSHA. According to OSHA,
“State Plans must provide sanctions as effective as
those set forth in the OSH Act.”
It should be noted that OSHA often is willing to reduce
penalties based on an employer’s good faith, history
of prior violations and size of business. Employers
who willingly work with OSHA are often able to negotiate
settlements for reduced penalties. OSHA’s main
goal is to abate the hazard as quickly as possible rather
than getting embroiled in lengthy legal disputes.
For subsequent years, adjustments must be made by
mid-January. OSHA had the option of adjusting penalties
to an amount less than the maximum allowed
amount if they felt it would have had a negative economic
impact and if the Office of Management and
Budget was in agreement. That scenario seemed unlikely
given the fact that penalties had remained unchanged
for over a quarter of a century and the agency
has been pushing to increase penalties for years.
The increase in maximum penalties may seem excessive,
but had OSHA been allowed to increase fines
each year based on inflation, the agency would have
been making those incremental increases annually.
Instead of focusing on the increases, construction
firms should be focusing on implementing and enforcing
safety programs that will prevent them from
facing fines when inspection time comes around.
Originally appeared on Construct Connect http://www.constructconnect.com/blog,
Article written by Kendall Jones
30 | Building Entrepreneur