When Congress passed a new two-year budget deal last week, a few words tucked into the bill gave OSHA the power to significantly raise its penalties in 2016 on businesses that violate safety regulations. In simple terms, OSHA’s framework of fines had not been increasing with inflation for many years. With this budget bill, Congress will allow OSHA to raise fines by up to 150% to “catch up” with inflation and then to go up each year with the inflation rate.
How big a change will that be? It is a little complex and the budget bill has not been fully reviewed, but an analysis by the Associated General Contractors of America shows “this could mean an initial adjustment of approximately 82% which – as an example – would raise the maximum penalty for a willful violation from $70K to a little more than $124K.”
Remember, that penalty may be one of several violations that OSHA can assign to a violator. To put it in perspective, OSHA recently charged a North Dakota roofing company with three willful violations for failing to provide adequate fall protection. The fine was $105,000. Under the new change that fine could have been nearly $200,000.
The change got very little attention and virtually no debate. Anyone who follows Congress knows that deals are cut and some surprising provisions have a way of making their way into bills in the final hours. Back in the 1950’s, one Senator melodramatically blamed these deals on “the midnight power of bourbon and Benedictine.” However, in this case, OSHA has been very public in pushing for the change. In testimony in Congress just a month ago, OSHA chief David Michaels said “The most serious obstacle to effective OSHA enforcement of the law is the very low level of civil penalties allowed under our law” and asked Congress to let the fines go up with inflation.
Whether companies agree or not, there is little they can do about it. This bill had the blessing of the Republican majority in Congress and it would be politically risky for Congress to reopen it.
Bottom line: The price of violating the law on safety just went up. If you want to make sure your company stays in compliance, contact us at email@example.com.