On July 1, 2016, an interim final rule adjusted the amounts of civil penalties assessed by OSHA. (Link) The penalties are being modified pursuant to the Federal Civil Penalties Inflation Adjustment Act, which requires federal agencies to adjust their penalties for inflation each year. As a result of this rule, OSHA is increasing its maximum penalties. Until now, OSHA has been exempted from this law, and so OSHA’s maximum penalties have not been raised since 1990. The result of these changes is a significant increase in penalty exposure for OSHA violations.
The increases are substantial: the maximum penalties will increase by 78%. Except for willful violations, minimum penalties are not affected. The changes in the penalties are as follows:
States that operate their own Occupational Safety and Health Plans are required to adopt maximum penalty levels that are at least as effective as OSHA’s.
Although OSHA will be taking public comments on this final rule until August 15, 2016, the increases are effective August 1, 2016. The interim rule does not discuss whether the new penalties will be applied to inspections begun before August 1, 2016. However, OSHA’s website states that any citations issued by OSHA on or after that date will be subject to the new penalties if the related violations occurred after November 2, 2015.
These increases affect ongoing investigations. According to the U.S. Department of Labor website, if the violations occurred after November 2, 2015 and the citation is issued on or after August 1, 2016, the new penalties apply.
OSHA stated that, to provide guidance to field staff on the implementation of the new penalties, OSHA will issue revisions to its Field Operations Manual by August 1. OSHA has also indicated that, to address the impact of these penalty increases on smaller businesses, OSHA will continue to provide penalty reductions based on the size of the employer and other factors.