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November 16, 2015

New Federal Budget Deal Means Stiffer OSHA Penalties

Employers subject to workplace safety inspections by OSHA, which can be triggered by a complaint, referral, agency emphasis program, or a site-specific targeting program, will soon face much higher penalties for violations. Buried in the 144-page Bipartisan Budget Act of 2015, signed into law on November 2, 2015, is an amendment to the Federal Civil Penalties Inflation Adjustment Act increasing OSHA's civil monetary penalties for the first time since 1990.

The amendment requires OSHA to begin annually adjusting its penalties for inflation based on the Consumer Price Index. In addition, OSHA must implement a one-time "catch up" adjustment to account for inflation occurring since the last time those penalties were adjusted – unless it determines such an increase would have a "a negative economic impact or social costs that outweigh the benefits" and the Office of Management and Budget (OMB) agrees. Such a determination seems unlikely considering recent comments by the Assistant Secretary of Labor for OSHA, Dr. Michaels: "Simply put, OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business."

This means OSHA will most likely increase its penalties by approximately 80% over current levels, which it would implement via interim final rulemaking effective on or before August 1, 2016. OSHA's current maximum penalties for "other-than-serious" and "serious" violations are $7,000, and are $70,000 for repeat and "willful" violations. If these amounts are increased as directed, they will become approximately $12,500 and $125,000, respectively, and then increase annually thereafter.


If you have any questions about the content of this alert please contact the Barclay Damon attorney with whom you normally work or any attorney in our Labor & Employment Practice Area.

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