Keep an Eye on Rising OSHA Penalties

Get Ready For Higher OSHA Penalties

Employers who violate federal safety and health standards will soon face steeper penalties. Starting in August 2016, the U.S. Occupational Health and Safety Administration (OSHA) will hand out increased penalties for violations.

OSHA has published safety standards that apply to most private employers. These standards include things such as:

  • Fall protection and trench cave-in prevention for construction sites
  • Protection against exposure to some infectious diseases and harmful chemicals
  • Guards on dangerous machines
  • Safety for workers in confined spaces
  • Respirators and other safety equipment
  • Understandable training for certain dangerous jobs.

To ensure that employers are meeting these standards, OSHA performs unannounced inspections. These inspections may be in response to a complaint from a current worker. OSHA keeps the sources of these complaints confidential.

When an inspector finds serious dangers or violations of OSHA standards in the workplace, the agency may assess fines against the employer. Congress sets the amounts of those penalties by law. Until the fall of 2015, it had not done so since 1990. That changed with the federal budget Congress enacted for 2016.

One of the revenue raising measures contained within the budget requires the U.S. Department of Labor to adjust the amounts of its financial penalties to reflect inflation. Since OSHA penalties had not been adjusted in 25 years, this forced a significant increase in their levels.

The precise amounts of the penalties will not be known until July 1, 2016. This is when the Labor Department will publish a temporary regulation announcing the new penalties. The higher levels will take effect by August 1, 2016. In the future, the department will adjust the penalties once a year by the amount of increase in the Consumer Price Index, the most commonly used measure of inflation.

It is important to know that OSHA will impose the higher penalties starting on the effective date, even if they performed the inspection before that date. Therefore, if the penalties take effect on August 1, fines assessed on August 3 for an inspection performed on July 12 will be at the higher level.

While the amounts of penalties are increasing, OSHA will continue to reduce penalties for the smallest employers. Since 2012, OSHA has discounted penalties for firms with one to twenty-five employees by 60 percent. The new penalty structure will not change that policy. This will prevent the higher penalties from disproportionately affecting the employers who can least afford them.

Some states have their own safety enforcement plans, subject to OSHA's approval. Federal law requires these plans to have penalty levels at least as effective as OSHA's. Therefore, all OSHA-approved state plans will also have to increase their penalties.

Since OSHA's creation in 1970, the rates of workplace fatalities and serious injuries have fallen by two-thirds. Enforcement of safety and health standards have helped protect American workers. With these new higher penalties, non-compliant employers will face more severe financial consequences for providing unsafe workplaces. It is in their best interest to comply with the standards that apply to their industries and keep their workers safe. This will help with an insurance premium audit as well. For a better grasp on how OSHA works, here is some helpful information from Zeiler Insurance business blog:  What is OSHA? And Why is it Important to Your Business?

If you have questions or would like more information, call any of our 3 locations in the Chicago-land area today. Our customer service representatives are eager to share their knowledge and speak with you about any insurance related topic. Zeiler Insurance Services, Inc. is an independent insurance agency and has been providing quality customer service for 101 years in our Alsip, Chicago, and Gurnee locations. Our goal is to help you understand insurance as well as provide you with the most competitive insurance rates in the industry. Whether you are a customer or just want more information, let us help you with our years of expertise in the insurance business.

Dan Zeiler

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