August 1, 2016, is the effective date for imposition of higher fines by the Occupational Safety and Health Administration, but violations alleged in inspections occurring as recently as this February may be subject to the increased fees, according to OSHA. That is because OSHA can take as long as six months after the start of an inspection to issue citations and propose penalties.
The fiscal year 2016 budget agreement approved by Congress last fall (H.R. 1314) permits OSHA to increase its maximum fines by up to 78 percent to adjust for inflation occurring since the current limits were set in 1990. The change means the existing maximum of $70,000 for repeat and willful violations could climb to $124,709, while the top assessment of $7,000 for serious and other-than-serious violations could rise to $12,471. The congressional action applies only to these maximum penalty limits. OSHA said it also will adjust its penalty amounts annually based on the Consumer Price Index. OSHA provided information on the changes in a document released in April. The OSHA release, in turn, was based on a February 24 memorandum from the Office of Management and Budget.
The OMB directive sets forth a timeline for implementing the increases. May 2, 2016, is listed as the last date for OSHA to submit to OMB’s Office of Information and Regulatory Affairs for review an interim final rule increasing maximum fines. The Labor Department then has until July 1 to publish the interim final rule in the Federal Register, with the new penalties taking effect on August 1. The OMB memorandum also specifies that because an interim final rule will be used, OSHA does not need to go through notice-and-comment rulemaking prior to publishing the rule.
According to the OMB memorandum, OSHA could set a lower figure if it concludes that the new maximums would have a negative economic impact or that the social costs would outweigh the benefits. However, before a lower figure could take effect, it would have to be approved by the budget agency. Up to now, OSHA officials have shown no inclination to seek any amount lower than the largest figures allowed by the law. The safety agency has not tipped its hand as to how much of an increase it will seek, or in what way the new limit will affect how OSHA calculates discounts, such as those available to small employers.