On January 15, the Occupational Safety and Health Administration (OSHA) raised its civil penalties (85 Fed. Reg. 2,292) by approximately 1.8%. The final rule implements annual inflation adjustments of civil monetary penalties assessed or enforced by OSHA and other agencies within the Department of Labor (DOL) in 2020, as required by the Inflation Adjustment Act (Pub. L. 114-74).
OSHA’s penalty increases for workplace safety and health violations include:
- For a willful violation, in which an employer knowingly failed to comply with an OSHA standard or demonstrated a plain indifference for employee safety, the minimum penalty increases from $9,472 to $9,639 and the maximum penalty increases from $132,598 to $134,937;
- For each repeated violation for an identical or substantially similar violation previously cited by the agency, the penalty ceiling rises from $132,598 to $134,937;
- For each serious violation for workplace hazards that could cause an accident or illness that would most likely result in death or serious physical harm, the maximum penalty increases from $13,260 to $13,494;
- For each other-than-serious violation, the maximum penalty increases from $13,260 to $13,494;
- For each failure to correct violation, the maximum penalty increases from $13,260 to $13,494; and
- For each posting requirement violation, the maximum penalty increases from $13,260 to $13,494.
The new penalty amounts take effect immediately, applying to any penalties assessed after January 15.
On November 2, 2015, Congress enacted the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the Inflation Adjustment Act, to improve the effectiveness of civil monetary penalties and maintain their deterrent effect.
On July 1, 2016, the DOL published an interim final rule establishing an initial “catch-up” adjustment for civil penalties the Department administers. The Labor Department has issued annual inflation adjustments of civil penalties in 2017, 2018, and 2019.
The department is required to calculate the annual adjustment based on the Consumer Price Index for all Urban Consumers (CPI-U). Annual inflation adjustments are based on the percent change between the October CPI-U preceding the date of the adjustment, and the prior year’s October CPI-U.
The current adjustment is based on the percent change between the October 2019 CPI-U and the October 2018 CPI-U. The cost-of-living adjustment multiplier for 2020, based on the Consumer Price Index (CPI-U) for the month of October 2019, not seasonally adjusted, is 1.01764.
Existing penalty amounts are multiplied the multiplier, 1.01764, and then rounded to the nearest dollar.
If an OSHA Compliance Safety and Health Officer (CSHO) finds a hazard or standard violation during an onsite inspection, the inspector may issue citations and penalties. Inspections begin with a presentation of agency credentials and an opening conference and include a worksite walkaround and closing conference.
If the agency issues any citations or penalties, an employer may request an informal conference with the OSHA Area Director to discuss citations, penalties, abatement dates, or any other information pertinent to the inspection. The agency and the employer may work out a settlement agreement to address hazards found during an inspection.
OSHA has stated that its primary goal is correcting workplace safety and health hazards and ensuring compliance rather than imposing citations and collecting penalties.