As of January 15, 2021, civil penalties for workplace safety and health violations issued by federal OSHA will increase by about 1.2%. This increase reflects the annual inflation adjustment to civil monetary penalties initiated back in 2016. As in prior years, though the increase seems minimal, the impact of these annual increases in the aggregate is significant, as OSHA’s civil penalty authority has nearly doubled from what it was just 5 years ago.
How the Annual Penalty Adjustments Started
Over the past several years, we have seen civil monetary penalty increases of about 1%-2% each year, but this all started with a huge spike in permissible penalty amounts through a statute covertly passed during the Obama Administration. Specifically, in an effort to avert a government shutdown, outgoing Speaker of the House John Boehner and President Barack Obama made a backroom deal that ultimately took the form of the Bipartisan Budget Act of 2015. That measure included the “Federal Civil Penalties Inflation Adjustment Improvements Act” – a significant and controversial statute that was essentially unknown (including by the folks within OSHA) and saw exactly zero seconds of debate on the floor.
The Act mandated that essentially all 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. As OSHA’s civil penalty authority had been stagnant for 25 years, the “catch-up” penalty increase was the most significant at OSHA. Per the formula included in the statute, OSHA was required to increase its penalties on August 1, 2016 by nearly 80%.
In addition to the one-time 80% “catch up” increase that went into effect on August 1, 2016, the Federal Civil Penalties Inflation Adjustment Improvements Act required that agencies make automatic annual updates thereafter (by January 15th each year) to civil penalties based on inflation. OSHA made its Continue reading