On Aug. 1, fines issued by the Occupational Safety and Health Administration(OSHA) for regulation infractions were slated to rise by up to 150 percent depending on the type of violation.
States that operate their own Occupational Safety and Health Plans, like California’s Cal/OSHA are required to adopt maximum penalty levels that are at least as effective as federal OSHA’s. Here’s what a Cal/OSHAspokesperson told ECAMagazine:
“Cal/OSHA does plan to increase the penalties for safety violations, so that they are consistent with federal OSHA. However, Cal/OSHA penalties are determined by the state legislature. Cal/OSHA is working within the Department of Industrial Relations, taking steps to increase the penalty limits.”
Fines Hike Part of 2015 Budget Deal
The Republican-controlled Congress and President Obama signed a budget bill last year that contained a provision that allowed the agency to enact a catch-up adjustment and raise fines annually after that, in line with the Consumer Price Index (CPI). A small provision (Section 701) included in the bill amends the Federal Civil Penalties Inflation Adjustment Act of 1990 to require
all federal agencies that issue fines to private sector organizations to recalculate their penalties annually to account for inflation.
This shouldn’t be a problem going forward as the Federal Reserve and other government agencies say there is virtually no inflation in the economy. Take, for example, the inflationadjusted
Social Security benefits—last year saw a rise in SSI payments increases for cost-of-living (COLA) adjustments of 1.7 percent—and this year the increase is 0.0 percent. That’s right, no inflation expected.
So, given that official government prognosis, the fines shouldn’t be going up, right? Well…it is being reported that this new measure will increase revenue for the feds by $1.3 billion over 10 years.
First Hike in 25 Years
In addition to annual recalculation, Section 701 specifically requires OSHA to use a catch-up formula to reach the current inflation level, which could mean a drastic 150+ percent increase in fines reflecting the amount of inflation in the U.S. since 1990.
The chart below offers a look at what to look forward to on the federal level (and California after legislative action): OSHA intends to provide guidance on the implementation of the new penalties by Aug. 1.
Additionally, to address the impact they may have on small businesses, the agency plans to continue providing penalty reductions based on employer size and other factors.