In November 2015, Congress required federal agencies to adjust their civil penalties to account for inflation with legislation.
OSHA was included in this legislation as a part of the Department of Labor’s requirement that all fines be raised beginning Aug. 2, 2016. OSHA fines in effect since 1990 (capped at $7,000 for de-minimus, serious and failure-to-abate violations) are now subject to a current fine of $12,471 per violation, and willful and repeat violations previously capped at $70,000 now may carry a fine up to $124,709. As it currently stands, assuming no action is taken by the newly elected Republican administration, the fines will continue to increase with the cost of living, or effectively an inflation component.
As it stands, it will be difficult for the new administration to overturn the statute and roll back the higher violation penalties, but it could remove the inflation increase that would hold the maximum fines to the current values recently enacted. As President-Elect Donald Trump has made billions of dollars in the construction and development industries, it would seem likely that he would buck the current trend of heavy enforcement and move back to more compliance assistance. This may not be as simple as it was before President Obama’s legislation that provided the groundwork for the newly increased penalty schedule.
Violations of some of the more common standards, specifically related to fall protection, have shown standard offenders receiving fines higher than the previous maximum on inspections occurring after Aug. 2, 2016. A review of construction and general industry businesses reveals fines starting at $8,000 and as high as $12,000 for single fall protection-related violations. These fines are initial proposed penalties, prior to companies being allowed to plead their case in an informal conference negotiation. Companies that are found to have OSHA violations (with otherwise good safety programs, policies, and procedures) are often able to have violations reduced 25 percent to 40 percent, or more through a successful informal conference. Having a prudent and detailed plan of abatement of current OSHA violations and forward-thinking safety-conscious corporate initiatives can further reduce or eliminate violations from a company’s record.
It appears OSHA believes the average penalties for serious violations prior to Aug. 2, 2016, may not have been the deterrent needed to convince employers to stop unsafe acts. OSHA statistics show violations averaged $1,000 to $2,000 per violation in state and federal jurisdictions in 2014. The total number of violations peaked during the 2010 fiscal year, with subsequent years seeing a decrease each year. Penalties in 2010 were in excess of $181 million and $143 million by 2014. The reduction in penalties and violations may reflect increased safety, training and risk management policies by construction and general industries.
Proposed provisions and rules that have been on the docket for some time through the current administration continue to be held up with injunctions and lawsuits. Enforcement of the anti-retaliation provision of the injury and illness tracking rule was delayed from Aug. 10, 2016, to Nov. 1, 2016, while motions were heard in court, then took effect Dec. 1, 2016. This provision was challenged by numerous organizations in a Texas court, as concerns about the legality of limitation of post-incident drug testing as being deemed retaliatory in nature to injured employees. With a newly elected Republican administration, this enforcement provision could be overturned.
During the current transition period, prior to inauguration, the Republican administration will start with a transition team whose job it will be to collect information about all current and historical OSHA initiatives, rules and provisions in the various stages of the rulemaking process. Following the inauguration, the Trump administration will look to place individuals into positions overseeing OSHA at the federal level. The upcoming days leading to the Jan. 20, 2017, inauguration of President Trump should provide an illuminating glimpse as to the fate of current and proposed OSHA policies, provisions and fines going forward for at least the next four years.