By Eric J. Conn, Chair of Conn Maciel Carey’s national OSHA Practice Group

For as long as I have been practicing OSHA law (more than 15 years now), four things have remained constant:

1. The maximum per violation penalty that OSHA has been permitted by the OSH Act to assign to Serious violations has been $7,000, and for Repeat or Willful violations it has remained $70,000;
2. The Assistant Secretary of Labor for OSHA makes an annual pilgrimage to the Hill where he or she pounds on the table and demands that Congress enact OSHA reform legislation to increase the maximum penalties OSHA can assign (with common refrains like: “employers can be fined more for mistreating cattle on federal lands than for allowing an employee fatality!”);
3. There has been one iteration or another of such reform legislation (usually dubbed the “Protecting America’s Workers Act”) floating around Congress and stalling before it even gets out of Committee; and
4. OSHA proposes penalties on average at a level 50% below the maximum penalty level currently authorized.

Yet, here we are in 2015 with a Republican-controlled House and Senate, and through the backdoor comes a Congressionally-mandated increase to maximum OSHA civil penalties of nearly 80%. A bizarre parting gift by now former Speaker of the House John Boehner, no doubt part of his effort to “clear the barn” for his successor. Color me shocked.

Here are the details. The much publicized two-year bipartisan budget agreement allowed the federal government to remain open and not default on the U.S. debt, but it also contained lesser known (or completely unknown) provisions, including one that allows for a nearly 80% increase in OSHA penalties in the next year, as well as indefinite periodic increases to match the rise of the cost of living in the future.

Specifically, the “Bipartisan Budget Act of 2015” was passed by both houses of Congress and signed into law by President Obama last week (November 2^nd). Section 701 of the Budget Act, entitled “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,” gives OSHA the green light to increase penalty amounts to catch up with cost of living adjustments since the last time OSHA’s civil penalties were raised (1990).

The Civil Penalties Adjustment section of the 2015 budget bill was hammered out between Speaker Boehner and the White House with apparently no input from House or Senate members. It provides for a one-time “Catch-up Adjustment” that must be implemented by no later than August 1, 2016. The catch-up adjustment is tied to the percentage rise in the Consumer Price Index (CPI) from the time OSHA last increased its civil penalties in 1990 through November 17, 2015. The actual percentage increase will not be known until next week, but based on recent CPI trends, the increase is expected to be approximately 80%.

Assuming a penalty inflation adjustment of approximately 80%, OSHA will be imminently increasing the maximum civil penalty for alleged Serious violations from $7,000 per violation to approximately $12,000, and for alleged willful or repeat violations from $70,000 per violation to approximately $120,000. After the initial catch-up increase, OSHA is also authorized by the law to Continue reading →