OIG questions OSHA's penalty reductions

October 7, 2010

More than $350 million in OSHA penalty reductions in a two-year period has not been effectively evaluated, and 36 percent of those reductions may have been inappropriately granted, according to a Department of Labor Office of Inspector General audit (.pdf file) released Sept. 30.

The audit covers nearly 50,000 federal OSHA inspections between July 2007 and June 2009 that resulted in $523.5 million in penalties, later reduced to $351.2 million.

OSHA must consider an employer's size, good faith and history when proposing penalty amounts. The agency often reduces penalties as an incentive for employers to correct violations and improve workplace safety, as well as avoid a contest that would delay abatement, according to the report. OIG suggested OSHA has not committed resources to evaluate using such penalty reductions and their impact on workplace safety and health.

In response, OSHA administrator David Michaels took issue with some of the findings, noting certain reductions are statutorily required, and penalties cannot be assessed independently of contest rates. He added that his agency is working on new criteria for penalty calculations.