OSHA Law Alert: Enhanced OSHA/MSHA Enforcement and Penalties On the Way

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Two recent developments suggest that employers can expect increased fines under OSHA and enhanced enforcement of worker endangerment violations under OSHA and MSHA.

OSHA Fine Increases

As a result of a provision of the budget bill signed into law by the President on November 2, 2015, fines from the U.S. Occupational Safety and Health Administration (“OSHA”) are set to increase significantly in the next year. OSHA fines, which have been exempt from inflationary adjustments since 1990, will now be subject to such adjustments.

Increases will occur in two phases. No later than August 1, 2016, OSHA must publish an interim final rule to account for the intervening 25 years of inflation that have occurred since fines were last adjusted. The increase will take effect when OSHA publishes that rule. Although the precise amount of the increase remains uncertain, fines may be increased as much as 82%. If OSHA implements the maximum allowable increase, fines could increase as summarized below:

Type of Citation  Current Maximum  Increased Maximum 

Other than Serious

$7,000

$12,740

Serious

$7,000

$12,740

Repeat

$70,000

$127,400

Willful

$70,000

$127,400

Failure to Abate

$7,000/day

$12,740/day

Starting in 2017 and in every year thereafter, OSHA will be required to increase fines by January 15 to account for the previous year’s inflation as measured by the increase in the Consumer Price Index. OSHA may, however, request increases less than the amount of inflation with White House approval. The new law does not expressly require similar increases in the 28 states that administer their own safety and health programs, but OSHA may develop guidance directing those states to increase their fines to match the new federal mandate or the states may do so on their own initiative as they have to demonstrate that their administration of the law is as effective as federal OSHA.

Although OSHA fines are comparatively low when compared with other regulatory fines, these increases could have significant impacts on employers with multiple locations and large operations. Recent enforcement by federal OSHA includes treating separate corporations under the same management as a single entity for purposes of repeat citations. Relatively minor infractions repeated across numerous locations could result in significantly higher fines under the new regime.

It is important to note that OSHA is not required to increase fines to the maximum amount allowed, and there may be an opportunity for impacted parties to participate in OSHA’s rulemaking process after OSHA publishes its interim final rule.

Enhanced Enforcement under OSHA and MSHA

In December, the Departments of Justice and Labor announced a joint effort to more aggressively prosecute criminal violations of OSHA and MSHA. Although the worker safety statutes generally only provide for misdemeanor penalties, the Department of Justice plans to coordinate its prosecution of worker safety violations with environmental violations, which often carry heftier penalties. Violations of worker safety statutes will now be prosecuted by the Department of Justice’s Environment and Natural Resource Division’s Environmental Crimes Section.

As these changes make clear, there is a trend towards more aggressive enforcement of worker safety standards. We will continue to monitor these developments, but employers should take this opportunity to review their environmental and safety compliance plans to make sure they are in conformance with all applicable laws.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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