Pain From OSHA Fine Increase Already Being Felt

What a difference a day makes when if comes to OSHA penalties.  America’s safety watchdog had not raised its penalties since 1990, but last November Congress tied the agency’s fines to inflation and OSHA set August 1st as the day the penalties would go up.  So, if your company was cited by OSHA on Friday, July 29th, you would have been fined under the old penalty schedule.   However, starting on August 1, those fines went up almost 80% to reflect the inflation rate during the 26 years that the penalties were frozen.

So what happened at the beginning of August?  Clearly the price tag for violating safety rules jumped.  To get a feel for how much, I looked at the cases reported by OSHA online for the end of July and beginning of August. (Note: this is by no means scientific. Each case is different, citations change and the agency has a lot of discretion about its recommendations on total fines).

On Monday, August 1st, OSHA issued nearly $900,000 in fines.  All told there were six companies cited with an average fine of $148,617.

However, on Friday July 29th, OSHA cited 21 companies for a total of $3.9 million.   The average fine was $186,288.  That number needs some analysis to get true picture.  Three of those fines were  so high that they need to be considered individually:

  • Fraser Shipyards Inc
$1,400,000
  • Tyson Fresh Meats Inc.
$855,000
  • Material Handling Systems/MHS Technical Services
$320,000

If those three very large cases are taken out of the total, the fines against the remaining 18 companies averaged $74,281.   So one way to look at the difference for a “run-of-the-mill” case was $74,281 on July 29th vs. $148,617 on August 1st.    That is the type of difference that gets people’s attention!

The hidden headline may be that so many companies were cited right before the deadline went into place.  On most days OSHA cites a handful of companies maybe four-to-six, but on the last day for the lower fines, OSHA cited 21 companies.  Why so many?  The simple answer is that each case is different and it may be impossible to draw conclusions.   There is a lot of communication between OSHA and companies that are under investigation.  It may be that the companies worked hard to clear up problems in order to get the citations handled under the deadline.

Does the abnormal number that “lucked out” matter in terms of a deterrent?  Maybe not. The objective of fines is to cause companies to address safety concerns.  If you were cited under the old schedule and you know that the next violation would skyrocket, you are probably going to do everything possible to fix the problems.

The bottom line is that Congress and OSHA wanted to make sure that penalties have some bite to them.   Looking at the difference in fines from one day to the next shows OSHA is wasting no time in driving home that message.


Worried about the potential impact that higher fines may have on your business?  Contact us at info@lifelinestrategies.com for a company safety audit or help in developing an effective safety management program to ensure compliance.

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