You may recall that, in July 2016, AOHP published in E-Bytes a report on the substantial increases to OSHA fines for violations of safety and health regulations. This first increase was a result of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Section 701 of Public Law 114-74). This regulation allowed OSHA a one-time “catch-up” adjustment for civil penalties of 78%, which could be followed by annual increases in penalties based on the Consumer Price Index.
The Inflation Adjustment Act provides that agencies shall adjust civil monetary penalties notwithstanding Section 553 of the Administrative Procedure Act (APA). Additionally, the Inflation Adjustment Act provides a cost-of-living formula for adjustment of the civil penalties. Accordingly, this final rule sets forth the Department of Labor’s 2017 annual adjustments for inflation to its civil monetary penalties, effective January 13, 2017.
Going forward, the DOL is required to adjust maximum OSHA penalties for inflation, to be published in the Federal Register by January 15 of each new year. The DOL has now finalized the 2017 inflation adjustments, which will nudge the penalties even higher, and on January 18, OSHA published the 2017 annual inflation adjustment for OSHA penalties.
Based on the Consumer Price Index for the stipulated time period, the 2017 annual adjustment for OSHA penalties is marginally over 1%. As a result, increased penalties will apply to any penalty assessed after this date.
Up How Much?
Under the 2017 rule, the maximum OSHA civil penalties will be:
Type of Violation 2016 Penalties 2017 Penalties |
Other Than Serious Violations $ 12,471 $ 12,675 |
Serious Violations $ 12,471 $ 12,675 |
Repeat Violations $ 124,709 $ 126,749 |
Willful Violations $ 124,709 $ 126,749 |
Failure To Abate (Per Day) $ 12,471 $ 12,675 |
Assessing the New Penalties
The new OSHA penalty amounts are applicable to OSHA citations issued after January 13, 2017, whose associated violations occurred within the six-month statute of limitations.
OSHA published the following table in the Federal Register, which should help to eliminate any guesswork regarding the level of penalties to be levied based on the date of the violations and when the penalty was assessed.
Violations Occurring | Penalty Assessed | Which Penalty Level Applies |
On or before November 2, 2015 | On or before August 1, 2016 | Pre-August 1, 2016 levels |
On or before November 2, 2015 | After August 1, 2016 | Pre-August 1, 2016 levels |
After November 2, 2015 | After August 1, 2016 but on or before January 13, 2017 | August 1, 2016 levels |
After November 2, 2015 | After January 13, 2017 | January 13, 2017 levels |
What About State Plans
Additionally, in response to criticism by the North Carolina Department of Labor and the Kentucky Labor Department, Federal OSHA clarified that it expects State Plans to increase their maximum penalty amounts to align with Federal OSHA. Specifically, OSHA stated:
“[A]ll State Plans must increase their maximum and minimum penalty levels to be at least as high as OSHA’s initial catch-up maximum and minimum penalty levels… and must thereafter increase these maximums and minimums based on inflation.”
OSHA will assist the State Plans to make these necessary changes occur. OSHA’s position has been and continues to be that State Plans must have maximum and minimum penalties that are at least as effective as OSHA’s.
Where Can I Read the Changes?
The full text of the Department of Labor Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2017, 82 Federal Register 11 (January 18, 2017), pp. 5373-5387 can be read at:
https://www.osha.gov/FedReg_osha_pdf/FED20170118.pdf
Stephen Burt, BS, MFA
Chair, Government Affairs Committee