Washington Update

Washington Update: Higher fines, safer workers? OSHA-watchers weigh in

Later this year, OSHA is expected to increase its maximum penalty amounts by as much as 80 percent. For advocates who have long lamented that the agency’s penalties are too small, this is welcome news.

In 1990, Congress passed the Federal Civil Penalties Inflation Adjustment Act, which allowed government agencies to adjust their penalties based on inflation. But the law excluded OSHA – in part because Congress had just recently increased the agency’s fines in separate legislation. So while many other government agencies have been able to adjust their penalties to take into account rising inflation, OSHA has stayed at 1990 levels.

How much?

A quick look at how large new OSHA penalty maximums might become:

Violation type Current maximum Potential future maximum
Willful $70,000 $127,438
Repeat $70,000 $127,438
Serious $7,000 $12,744

Source: Bureau of Labor Statistics, Consumer Price Index inflation calculator

This is changing. A provision in the bipartisan budget agreement signed into law in November removes the exemption barring OSHA from increasing penalties and directs the agency to issue, by August, an interim final rule that outlines penalty increases.

“In our view, it’s long overdue to treat the Occupational Safety and Health Act and its penalties as any other enforcement agency of the government,” said Peg Seminario, safety and health director for the AFL-CIO. “I think it’s hard to argue that worker safety violations should be discounted when violations throughout the rest of the government aren’t.”

Although the forthcoming penalty increases won’t address other deficiencies in the law, such as the challenges of criminally prosecuting certain violators, the move is a “real step forward,” Seminario said.

But to Washington-based attorney Eric Conn, the provision “seems like it fixes a problem that doesn’t exist.”

Conn, who is founding partner at Conn Maciel Carey and chair of the firm’s national OSHA Workplace Safety Practice Group, questions the need to increase fines when the average penalty OSHA issues is less than half the current maximum allowed. “They have not been using their full penalty authority in most cases,” he said.

However, Seminario points out that average OSHA penalty amounts will never be at the maximum. An employer’s history, size and good-faith efforts must all be taken into account by the agency, which will adjust penalties downward based on those factors. Besides, she added, it has been widely acknowledged that OSHA penalties are small and ineffective.

Conn agrees that current OSHA penalties are “substantially smaller” than other enforcement agencies, and that the budget provision will help address the discrepancy. In terms of effectiveness, however, his stance is that OSHA fines are not a motivating factor for employers.

“Employers have all the incentive in the world to operate a safe workplace regardless of OSHA penalties,” he said, noting that incidents can lead to injury costs and productivity loss.

In contrast, other government enforcement agency penalties are heftier than OSHA’s because the incentives that prompt employers to create safe workplaces may not exist in other areas. Take the Environmental Protection Agency as an example. According to Conn, being environmentally unsound doesn’t cost employers money like being unsafe does (through workers’ compensation costs, lost productivity, etc.), so EPA has a greater need for large penalties to motivate employers to do the right thing.

Several OSHA violations also carry mandatory minimum penalty amounts. OSHA can set those minimums, and may choose to increase them by 80 percent along with the maximums, or keep them the same. Both Conn and Seminario believe the agency may increase some of the minimums at least to a degree, but to what extent remains unclear.

Regardless of what the maximum or minimum penalty amounts might become, Conn’s advice to employers remains the same: Focus efforts on implementing an effective safety program and preparing for an OSHA inspection.

The opinions expressed in “Washington Update” do not necessarily reflect those of the National Safety Council or affiliated local Chapters.

Kyle W. Morrison

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