Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act in November, 2015. The stated purpose of this law was “to advance the effectiveness of civil money penalties and to maintain their deterrent effect.” The law directed federal agencies to adjust their penalties for inflation each year and required agencies to publish “catch up” rules by July 1, 2016 to make up for lost time since the last adjustments.
The last time OSHA increased penalties was in 1990 when “other than serious” and “serious” penalties were increased to a maximum penalty amount of $7,000.00 and “repeat” and “willful” violations were increased to a maximum penalty level of $70,000.00. As part of the interim final rule announced via press release by the Department of Labor on June 30, 2016, OSHA’s maximum penalties will increase by 78%. As a result, the maximum penalty for an “other than serious” or “serious” violation will be $12,709.00 and the maximum penalty for a “repeat” or “willful” violation will be $124,709.00. Moreover, going forward, these new penalties will be adjusted annually for inflation.
This new penalty structure will have a “trickle down” effect on all Citations issued by the OSHA. Therefore, it is important for employer’s to redouble their efforts to ensure compliance with the myriad of OSHA regulations applicable to their businesses. Penalties affected are those assessed after August 1, 2015 where the associated violations occurred after November 2, 2015.