The Occupational Safety and Health Administration (OSHA) is the organization responsible for protecting the health and safety of workers in the United States. After the Occupational Safety and Health Act of 1970 was passed, Congress established OSHA in 1971 to ensure safe working conditions for U.S. workers. One method by which OSHA ensures businesses adhere to health and safety standards is by fining companies who violate these standards. OSHA has just announced that it will be increasing its monetary penalties for companies that violate health and safety standards for the first time in 25 years. Because these penalties have not been adjusted for a quarter of a century, they are expected to increase significantly. Many experts believe the increase could be as much as 80 percent. The new increases will be effective August 1, 2016.
Currently, the maximum penalty for any initial violation, whether considered serious or non-serious, is $7,000. Once the penalties are increased in August, the maximum penalty will rise to $12,471. If a company violates OSHA laws willfully or repeatedly, it can be responsible for maximum penalties of $124,709, up from $70,000. These increases are meant to adjust for the 25 years of inflation that has occurred since the last increase in 1990. In addition to the initial adjustment this year, OSHA now has the ability to regularly increase penalties every year to keep up with the rates of inflation. Unlike most statue violation penalties, which are adjusted for inflation every four years, OSHA and a handful of other federal agencies were not allowed to adjust fines as a result of the Federal Civil Penalties Inflation Adjustment Act. Businesses should now expect annual increases that take effect by January 15 of every year. The goal of these modifications to the act is to keep penalties as financially relevant as possible.
OSHA penalty increases will not go unnoticed by businesses. In the past, the relatively small OSHA fines were discounted as any other cost of normal business. Relative to other, more substantial costs and risks, these penalties have not successfully deterred companies from violating health and safety laws. The heftier fines are expected to be more successful, especially for smaller companies. Experts are hoping that the price hikes will force businesses to make employee safety and OSHA policies a priority. However, some argue that the fines are already high enough so the increase will not offer any more discouragement from violations. Regardless of the consequences of these penalties, businesses should use this time wisely to review and improve their safety procedures. A few tips that can make the revision process efficient and effective are as follows. Note common OSHA citations and determine if your company is at a greater risk for any listed hazards. Completing OSHA-Authorized Outreach training can also ensure your workers have understanding of basic safety. Lastly, complete compliance training for specific hazards and risks your employees in particular may be susceptible to. Continue reading