Considerations for Employers as OSHA Penalties Soar to New Heights
The U.S. Department of Labor recently announced inflation-adjustment increases in penalties for violating regulations promulgated by DOL agencies, including the Occupational Safety and Health Administration (OSHA).[1] Now more than ever, employers should consider when and why it makes sense to challenge any OSHA citation, regardless of how serious the classification. The economic realities demand employer attention to this issue.
New OSHA Penalty Amounts
For 2022, common OSHA violations classified as Serious, Other-Than-Serious or for Failure to Post now have maximum penalties of $14,502 per violation, up from $13,653 – a 6.2% increase. A violation for Failure to Abate is also $14,502 – but is assessed on a per day basis. And the maximum penalty in 2022 for Willful and Repeat violations is $145,027.00 per violation, up from $136,532.00.[2]
Historical Perspective
While it seems inflation is just a part of doing business, OSHA maximum penalty amounts actually remained constant for the first 45 years — from the enactment of the Occupational Health and Safety Act in 1971 until 2016. With bipartisan support, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015[3] required agencies to adjust civil monetary fines to improve effectiveness of the penalties and deter violations. The Act required an immediate catch-up in 2016, with annual, indexed inflation adjustments thereafter.
Although penalty increases are indexed, the 2022 increase in maximum penalty amount is the largest increase since the initial 2016 catch-up.
For a bit more historical context, since 2015, OSHA maximum penalty amounts have more than doubled. In the past seven years, Serious, Other-Than-Serious and Posting Requirement violations are up from $7,000 to $14,502 per violation. Violations for Failure to Abate (which are assessed per day) have seen the same increase. Willful or Repeated violation maximum penalty amounts have similarly jumped from $70,000 to $145,027 per violation.
Even if these increases are related to the 2016 catch-up adjustment and inflation, maximum penalty amounts arguably are now approaching punitive status.
Silver Lining?
But – it could always be worse. The “Build Back Better” bill,[4] approved by the House of Representatives but later rejected by the Senate in late 2021, included in its nearly 2,500 pages some staggering increases in OSHA penalties. For serious violations, the maximum penalty would have gone from $14,502 to $70,000.[5] For willful and repeat violations, the penalty would have increased from $145,027 to a $700,000. The stated basis for these proposed increases was, once again, to deter violations.
Recommendations for Employers
Although Build Back Better in its current form is legislatively “dead,” congressional attempts to “resurrect” certain provisions through other bills are likely.[6] Employers should keep a watchful eye on additional legislation to increase OSHA penalties.
But even if OSHA penalties remain at the recently-announced 2022 levels outlined above, employers should strongly consider whether to challenge an OSHA citation – no matter the seriousness. With repeat violation penalties now climbing to almost $150,000, it would be difficult for almost any company to financially sustain repeat offenses.
An OSHA citation does not have to be the final word. Butler Snow offers strategic advice to navigate OSHA incidents, investigations, citation negotiations, settlements, and appeals to potentially decrease or eliminate OSHA liability and penalties.
If you are an employer concerned about OSHA compliance, contact [professional id=”2343″] at 601-985-4595 or Jay.Bolin@ButlerSnow.com and [professional id=”8158″] at 601-985-4487 or Anna.Morris@ButlerSnow.com.
[1] Federal Register:: Department of Labor Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2022
[2] OSHA Penalties | Occupational Safety and Health Administration
[3] https://www.dol.gov/agencies/whd/resources/penalties
[4] https://www.congress.gov/bill/117th-congress/house-bill/5376
[5] See H.B. 5376 at” Section 21004. Adjustment of Civil Penalties.”
[6] Indeed, House Speaker Nancy Pelosi says she’s “never giving up” on BBB: https://www.businessinsider.com/nancy-pelosi-never-giving-up-build-back-better-manchin-opposition-2022-2. Democrat leaders have claimed certain “chunks” of the bill could pass: https://www.reuters.com/world/us/biden-says-he-will-look-pass-build-back-better-elements-piecemeal-2022-01-19. And West Virginia Democratic Senator Joe Manchin, who was a key rejecting vote of BBB, has stated he might “resurrect” certain policy issues that the bill attempted to address: https://www.nbcnews.com/politics/congress/manchin-says-build-back-better-dead-here-s-what-he-n1288492.
