In 2016 OSHA fines may be going up, way up

Jonathan BelekBusiness Insurance, Manufacturing Industry, Risk Management

Buried in the Bipartisan Budget Act of 2015 is a provision that would bring a startling increase to Occupational Safety & Health Administration (OSHA) fines. Unchanged since 1990 and not indexed to inflation, OSHA fines are set to jump nearly 80% next year, with increases indexed to inflation after 2016.

The Federal Civil Penalties Inflation Adjustment Act of 1990 tied the increase of many fines to the rate of inflation but specifically exempted OSHA fines.

Now those fines will rise with inflation going forward, but the real kicker is the “catch up adjustment” provided for in the Bipartisan Budget Act. That “catch up” requires OSHA to adjust its fines by the rate of inflation since the last increase in 1990. What cost $1 in 1990 would cost roughly $1.78 today, a 78% increase. OSHA fines for willful violations, for example, which currently max out at $70,000, would rise to $124,600, below a 150% cap the Act provides for, but still a huge leap.

The Act requires the adjustment to occur before Aug. 1. There’s one potential saving grace caveat: The head of OSHA may propose a lower fee if he determines it will have a “negative economic impact” and the Director of the Office of Management and Budget concurs.

Don’t hold your breath.  In 2016 OSHA fines may be going up, way up

At the end of next year, and subsequent years, the Federal Office of Management and Budget will give guidance on further fee adjustments tied to inflation.

With the authority to enforce safe workplace standards in all industries, OSHA, an arm of the federal Department of Labor, can cause particularly acute headaches for manufacturing and construction businesses.

When it comes to avoiding OSHA fines — indexed to inflation or not — the best offense is a good defense. Are you following best safety practices in your workplace? Are you prepared for an OSHA “pop-in”? Check out our blog on that topic and call us for further assistance.

Jonathan Belek
Risk Management Consultant
jbelek@srfm.com