On August 2, 2016, OSHA’s maximum penalties will increase by 78%. The penalty hike is the result of an interim final rule issued by the U.S. Department of Labor. The increase is intended to bring OSHA penalties, which have not been raised since 1990, in line with inflation.
Under the rule, serious and other than serious violations will now be capped at $12,471 per violation, rather than $7,000. Failure to abate violations, which are calculated on a per day basis, will receive an identical increase—$7,000 to $12,471. The cap on substantial penalties for repeated and willful violations increases from $70,000 per violation to $124,709.
These changes become effective for all citations beginning August 2, 2016. No matter when the violation occurred or when the investigation began, all OSHA penalties after August 1, 2016 will be calculated according to these new maximums.
OSHA’s 2015 Field Operations Manual remains the latest guidance as to how it determines an appropriate fine for violations. The primary consideration in determining penalty amounts is the “gravity of the violation,” which is determined by examining the severity of the injury that could have resulted from a violation, along with the probability that an injury could have occurred. It also allows for reductions in penalties depending on the employer’s size, whether the employer lacks a history of violations, and whether the employer was acting in good faith (i.e., wasn’t purposefully breaking the rules and had an effective safety and health management system in place).
Of course, the cheapest OSHA fine is the one never issued. Having a safety program in place and making sure that employees receive regular training on best safety practices is advisable. Companies should strive to create a culture in which safety always comes first—the increase in OSHA penalties is just one more reason why.
| Violation Type | Old Max Penalty | New Max After August 1 |
| Other than Serious | $7,000 | $12,471 |
| Serious | $7,000 | $12,471 |
| Failure to Abate | $7,000 a day | $12,471 a day |
| Repeat | $70,000 | $124,709 |
| Willful | $70,000 | $124,709 |
What’s Happening Now . . .
- The U.S. Economy grew at 1.2% for the second quarter of 2016.
- Growth hasn’t topped 2% since the second quarter of 2015.
- The second estimate for the second quarter will be released August 26, 2016.
- In 2013 and 2014, quarterly growth exceeded 2% in 6 of 8 quarters.
Source: BEA, U.S. Dept. of Commerce, News Release, Nat. Income and Product Accounts (July 29, 2016).
Newsletter written by Jeffrey C. Bright, Esq., an attorney licensed in Pennsylvania and Maryland. For more information, contact an attorney at Harmon & Davies, P.C.
This Newsletter is not legal advice. Unlike this Newsletter, legal advice is specifically tailored to the facts, law, and objectives unique to each circumstance.
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