By Dan C. Deacon and Eric J. Conn
As of January 2, 2018, civil penalties for workplace safety and health violations issued by federal OSHA increased again by 2% across the board. Although a 2% increase does not shock the system, this increase is part of a program that has resulted in OSHA’s civil penalty authority nearly doubling since 2016.
History of Civil Penalty Adjustments
As I sit here this afternoon wondering if the government will shut down over disputes about immigration and healthcare, I am reminded of a time just a couple of years ago, in late 2015, when we were again on the verge of a government shutdown over abortion rights and deficit spending. That shutdown was averted thanks to a backroom deal between outgoing Speaker of the House John Boehner and President Obama, which ultimately took the form of the Bipartisan Budget Act of 2015. That “kick the can down the road” measure included a controversial statute that was essentially unknown (including by the folks within OSHA) and saw exactly zero seconds of debate on the floor. It was called the “Federal Civil Penalties Inflation Adjustment Improvements Act,” and it mandated that executive agencies increase their maximum civil penalty authority by the percent increase to the Consumer Price Index since the last time the agencies had raised their penalties.
On June 30, 2016, the Department of Labor issued its Interim Final Rule to implement the Civil Penalty Inflation directive. OSHA’s civil penalty authority had been stagnant for as long as any other agency, not having been increased for 25 years (since 1990), so this “catch-up” penalty increase for OSHA was the most significant. Indeed, following the formula included in the statute, OSHA was required to increase its penalties on August 1, 2016 by the same percentage increase as the growth from the 1990 Consumer Price Index – Urban (CPI-U) to the October 2015 CPI-U, which was nearly 80%:
In addition to the one-time 80% “catch up” increase that went into effect on August 1, 2016, OSHA’s Interim Final Rule, the Federal Civil Penalties Inflation Adjustment Improvements Act also required Continue reading
By Eric J. Conn
On June 30, 2016, the U.S. Department of Labor issued an Interim Final Rule to implement the Federal Civil Penalties Inflation Adjustment Improvements Act passed last Fall as part of the highly publicized “Bipartisan Budget Act of 2015” negotiated between the Republican-controlled Congress and the White House. Employers have a short window – until August 15th – to submit comments on the penalty increase rule.
As described in our November 2015 article here on the OSHA Defense Report, the inclusion in the budget deal of this extraordinary provision requiring immediate penalty increases to “catch up” with inflation was shocking to many, especially in light of the fact that the Republicans who accepted it are the same politicians who, year after year, reject Democrat-led efforts to pass some version of the Protecting America’s Workers Act – OSHA reform legislation that has as its cornerstone a provision to increase OSHA statutory penalties.
Although the Federal Civil Penalties Inflation Adjustment Improvements Act applies to all federal regulatory agencies, its impact will be felt most by employers receiving citations from OSHA. This is because many federal agencies, such as EPA and MSHA, quasi-regularly increase their penalties based on inflation. OSHA, on the other hand, has been statutorily prohibited from raising penalties for the last 25 years under a budget bill passed in the 1990s. As a result, OSHA’s August penalty “catch-up” hike will be the most significant of all federal agencies, raising penalties a whopping 78%, and increasing employers’ burden by an estimated $111M in the first year.
Also extraordinary is the fact that the regulation was not Continue reading
The June/July 2016 issue of Feed & Grain Magazine featured an article by Eric J. Conn and Dan C. Deacon, of Conn Maciel Carey’s national OSHA Practice Group, regarding OSHA’s upcoming increase in maximum civil penalties and renewed focus on criminal investigations and prosecutions. The article discusses the impact of these two new OSHA enforcement issues on the grain industry in particular, but the background and lessons reviewed apply to virtually every employer in the United States.
Here is a link to the full article in Feed & Grain Magazine.