Buried deep in the recently passed Congressional budget signed by President Obama, OSHA has been instructed to raise their fines for violations. OSHA penalties have been stagnant for 25 years. In 1990, The Federal Civil Penalties Inflation Adjustment Act of 1990 exempted OSHA from raising fines to account for inflation. In the new law there is an amendment that strikes the exemption.
.OSHA has been very vocal that penalties are not high enough. They claim that the current fine structure has been diminished by inflation and is an insufficient deterrent for employers.
Preceding the amendment, Congress published the following findings regarding low penalties;
"Sec. 2. (a) Findings.-The Congress finds that-
"(1) the power of Federal agencies to impose civil monetary penalties for violations of Federal law and regulations plays an important role in deterring violations and furthering the policy goals embodied in such laws and regulations;
"(2) the impact of many civil monetary penalties has been and is diminished due to the effect of inflation;
"(3) by reducing the impact of civil monetary penalties, inflation has weakened the deterrent effect of such penalties; and
"(4) the Federal Government does not maintain comprehensive, detailed accounting of the efforts of Federal agencies to assess and collect civil monetary penalties.
"(b) Purpose.-The purpose of this Act is to establish a mechanism that shall-
"(1) allow for regular adjustment for inflation of civil monetary penalties;
"(2) maintain the deterrent effect of civil monetary penalties and promote compliance with the law; and
"(3) improve the collection by the Federal Government of civil monetary penalties.
The new law specifically instructs OSHA to figure a one time "catch up" increase including the cost of inflation (Consumer Price Index) for the past 25 years!
Then after that one time increase the OSHA fine structure will be increased based upon the (CPI) inflation index.
New Penalty Amounts Will Break the Bank; 80% increase in fine amounts
The one time increase for 25 years means that a Serious fine of $7,000.00 can increase to a high of $12,600.00 and a Willful fine of $70,000 can increase to a whopping $126,000.00.
The drop dead date for OSHA to implement the one time 25 year inflation catch up penalty structure is August 1, 2016.
Residential Construction Industry is in OSHA's cross hairs
The number one most cited violation is "Failure to provide fall protection in residential construction while working 6 feet or more above a lower level. OSHA has ramped up site audits targeting residential builders, remodelers, roofer, painters, framers, masons and other sub-trades. To make matters more tenuous, residential contractors are not required to have OSHA 10 or 30 certification training and often lack resources that larger commercial and union contractors have. Lack of proper safety education means residential contractors are sitting ducks for OSHA site audits and fines.
Moving forward residential contractors need to start developing and implementing their safety programs and train their personnel. As an industry we need to quickly educate contractors and prepare for OSHA inspections. Failing to do this will lead to significant fines after OSHA stops by your job site.
As you begin to plan for next year be sure to include some funding in your budget for OSHA safety plan development and training for your field personnel.