Nearly a year ago, Congress passed legislation requiring federal agencies—including OSHA—to adjust their civil penalties for standards violations to account for inflation. OSHA hasn’t increased its penalties for more than 25 years, and once the 2015 ruling goes into effect this month, rates will increase by 78 percent. What’s more, OSHA will now annually adjust its rates based on the Consumer Price Index.
Ultimately, these increased fines could significantly impact businesses large and small—particularly those that are behind on their safety policies and procedures. Outdated fines may have been manageable in recent years, but with penalties in lockstep with the CPI, many companies will need to bolster their safety programs to remain profitable. The following are a few of the specific changes you can expect.
2016 Maximum OSHA Civil Penalties
Penalties will rise yet again in 2017, but here are the two key penalties safety-conscious companies should keep in mind:
Small Violations. Violations classified as “serious,” “other-than-serious,” and “posting requirements violations” will rise from $7,000 to $12,471 per incidence. According to OSHA, a serious violation exists when the hazard “could cause an accident or illness that would most likely result in death or serious physical harm,” unless the employer didn’t or couldn’t have known about the violation.
Other-than-serious violations directly affect job safety and health, and while they’re less severe in nature, they still cost just as much. Finally, a posting requirement violation is one in which an employer fails to publicly post an OSHA notice near the site where the violation occurred. Employees must be kept in the loop, and posting failures can lead to even more accidents and illnesses.
Major Violations. Overlooked hazards cost a pretty penny, but willful or repeated violations are far costlier. “Failure to Abate,” “Willful” violations and repeated violations will rise from $70,000 to $124,709 per incident. OSHA describes a willful violation as one in which “the employer either knowingly failed to comply with a legal requirement (purposeful disregard) or acted with plain indifference to worker safety.”
This year’s catch-up adjustments will be the most drastic, but Congress has allowed OSHA to raise its fine annually to keep up with inflation. The adjustments will occur no later than January 15 of each year, and watchful companies can keep an eye on the seasonally released CPI to get an idea of just how much their penalties may increase.
Furthermore, state-run Occupational Safety and Health Plans will be required to adopt maximum penalties “that are at least as effective as Federal OSHA’s,” according to the federal agency.
What the New Penalties Mean for You
How will your business be affected by OSHA’s nearly 80 percent increase in fines? Your experience will depend on your current and future commitment to a safe workplace. Some companies have historically viewed OSHA’s outdated fines as one of the costs of doing business, but that mindset won’t last. To stay profitable, you’ll need to make safety a top priority—if you’re not doing so already.
One of the best ways to cost-effectively provide for a safer workplace is to centralize all of your important documents: OSHA forms, policy changes and more. To keep track of all of your safety documents in one location—and never miss a deadline, update or safety alert again—try out safety software with a free demonstration today!