OSHA penalties, like death and taxes, are one of the few certainties in life. The last time OSHA raised its maximum penalties, Vanilla Ice and New Kids on the Block dominated the airwaves, Macaulay Culkin was a bona fide movie star, and Seinfeld was struggling to find an audience.
Unfortunately for employers, this is about to change, thanks to a provision in the Bipartisan Budget Act of 2015 signed by President Obama on November 2, 2015. Under that section, called the Federal Civil Penalties Inflation Adjustment Act of 2015, OSHA will be permitted to implement a “catch-up” adjustment and increase its maximum penalties to account for inflation over the past 25 years. The maximum initial adjustment will be based on the difference between the Consumer Price Index (“CPI”) in October 1990 and the CPI in October 2015, an increase of approximately 80%. Such an increase would impact OSHA’s maximum penalties as follows:
While the new law does not require OSHA to increase its penalties by the full amount, the Agency has been advocating for increased penalties for several years and is expected to seek the maximum permissible increase.
The adjusted penalties are expected to go into effect on August 1, 2016. In order to minimize their legal and financial exposure, employers should review and update their safety and health policies and programs to maximize the likelihood that they are in compliance prior to the effective date.