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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
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