Congress enacted the Federal Civil Penalties Inflation Adjustment Act in November as a “credible deterrent that influences behavior far and wide,” according to Thomas E. Perez, U.S. Secretary of Labor, in a June 2016 U.S. Department of Labor press release. “Adjusting our penalties to keep pace with the cost of living can lead to significant benefits for workers and can level the playing field responsible employers who should not have to compete with those who don’t follow the law.”
Two New Rules Accompany the Act:
Most of the citations and penalties affected by the Act fall under the first of two new rules. These are citations issued by the Employee Benefits Security Administration, Mine Safety, and Health Administration, Occupational Safety and Health Administration, Office of Workers’ Compensation Programs and the Wage & Hour Division. This rule “requires agencies to adjust the levels of civil monetary penalties with an initial catch-up adjustment, followed by annual adjustments for inflation,” according to the Federal Register.
The second rule is issued in conjunction with the Wage & Hour Division and the Department of Homeland Security, says OHSA. This rule, which has the same purpose and scope as the first, affects only workers who fall under the H-2B temporary guest worker program.
Much Steeper Penalties for Willful Safety Violations:
Three types of violations are listed at the OSHA website with new accompanying penalties, effective August 2, 2016. However, adjustments in the form of reductions to the penalties will be handled on a case-by-case basis, as outlined in the new Field Operations Manual. The new manual revisions empower field staff to reduce penalties in accordance with the size of the business “and other factors.”
Safety violations and penalties:
- Serious, other than serious posting requirements: Past maximum penalty – $7,000 per violation; New maximum penalty – $12,471 per violation
- Failure to abate: Past maximum penalty – $7,000 per day beyond the abatement date; New maximum penalty – $12,471 per day beyond the abatement date
- Willful or repeated: Past maximum penalty – $70,000 per violation; New maximum penalty – $124,709 per violation.
OSHA Assists with Compliance:
Legislators hope that these extreme penalty increases will not just account for inflation, but also reduce infractions and improve workplace safety overall. So, it stands to reason that many businesses — particularly small ones — will have a renewed interest in compliance. Fortunately, OSHA offers an on-site consultation program that can help.
This free, voluntary program is not part of an inspection, says OSHA. Geared at small businesses but available to anyone, the consultation is confidential and findings aren’t typically reported. Business owners don’t have to worry about citations or penalties, as the whole purpose is to identify issues that need attention. The only obligation that the business owner takes on is correcting the issues “prior to the actual visit and carry[ing] [them] out in a timely manner.”
While some businesses might view an 80 percent penalty rate hike as excessive, it only makes up for a lack of increases for nearly 30 years. But, while it’s technically fair, it’s also with purpose. Hopefully it will have a serious effect on compliance and worker safety. Future increases will be much more frequent, and much less painful.
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