How Will Bigger OSHA Fines Affect Your State?

As of August 1, 2016, the Department of Labor has adjusted for inflation the civil penalties for regulatory violations. This marked the first time since 1990 that OSHA was allowed by Congress to increase its penalties for employers who violate 29 CFR work safety requirements. Employers should know that OSHA penalties are now nearly twice as large as they were one year ago. 

The maximum penalty for most OSHA violations is now $12,471 per day, per violation, including the following:

• Serious violations [29 CFR 1903.15(d)(3)]
• Other-than-serious violations [29 CFR 1903.15(d)(4)]
• Failure to abate [29 CFR 1903.15(d)5]
• Posting requirement violations [29 CFR 1903.15(d)(6)]

The maximum penalty for “willful” or “repeated” OSHA violations, defined at 29 CFR 1903.15(d)(1) and (d)(2), is now $124,709.

The department of Labor has a fact sheet on the changes here. https://www.dol.gov/sites/default/files/2016-inflation-factsheet.pdf

What Bigger OSHA Penalties Mean for States

The immediate effect of these higher OSHA penalties in your state will depend on what kind of “State plan” is in place. Generally speaking, there are three types of State plans authorized by OSHA.

The First Plan Is No Plan

The first type of OSHA State plan is the simplest—no plan at all. In states without a State plan, Federal OSHA oversees work safety compliance—creating the standards, carrying out inspections, and assessing fines for violations. In these states, there is no need for the state to take action when the Federal requirements change.

There is one major difference between states with no plan and states with some form of plan. OSHA is not authorized to regulate public (government) workplaces at the Federal level. So, in states with no State OSHA plan, the Federal OSHA requirements apply to private industry employers only.  
If a state runs its own authorized OSHA program, however, the plan must cover public employers.

Check this map on OSHA.gov to see what kind of state plan your state has in place.

• White states have no State Plan
• Blue states run their own OSHA State Plan
• Grey states maintain a "partial" State Plan

States with Their Own OSHA Programs

The second type of State plan is a “full” State plan. Under these plans, states are authorized by OSHA to oversee a work safety program—including inspections, outreach, and enforcement. Twenty-two states fall into this category, including California, Michigan, North Carolina, and Puerto Rico.
To maintain authorization (and up to 50% funding) for their OSHA programs, states must increase their civil penalties to match OSHA’s increase. According to the existing regulations for State authorization at 29 CFR 1953, State plans have six months to amend their penalty assessment maximums.

If your state runs its own OSHA program, don’t be alarmed if the penalty amounts the state doles out haven’t risen just yet—they likely will. 

States with Partial State OSHA Programs

In a few states, the authorized State plan covers only public employees. The states with “partial” OSHA State plans are Connecticut, Illinois, Maine, New Jersey, New York, and the Virgin Islands.
In these states, Federal OSHA oversees work safety at private employers. Therefore, no action is needed from the state to raise the civil penalties assessed to private industry. Public employers in these states will likely see notice of higher penalties from their State OSHA organization within six months.

Why Did OSHA Wait 25 Years to Raise Penalties?

Since Congress passed the Inflation Adjustment Act of 1990, most Federal agencies have independently increased their civil penalty assessments on a regular basis every four years to keep pace with inflation. This saves Congress the trouble of manually adjusting each penalty in each law every few years. In the 1990 Act, though, Congress exempted a few agencies from adjustment, including OSHA. This prevented OSHA from raising penalties along with other agencies like the US Department of Transportation and Environmental Protection Agency.

In 2015, Congress passed the Inflation Adjustment Act Improvements Act of 2015 (emphasis ours) to update the formula agencies use to adjust penalties. The new law also directed agencies to adjust civil penalties every year to keep pace with inflation. Lastly, the 2015 Improvements Act removed OSHA’s exemption, allowing OSHA to raise penalties for the first time in 25 years.

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Tags: and, fines, new rules, osha, penalties, safety