Regulatory Update: Big Jump in OSHA Fines Not Coming
It’s not often these days that employers have something to cheer about when it comes to the regulatory front, but that seems to be the case now that Democrats in the Senate apparently have decided not to proceed with a proposal that would have quadrupled financial penalties imposed by the Occupational Safety and Health Administration (OSHA).
At present, the maximum fine OSHA can assess against an employer per alleged repeat, willful or failure-to-abate violations is $145,027. Last year, the House of Representatives passed a bill that would have boosted the maximum penalty for willful or repeat violations of OSHA workplace safety rules from that amount to $700,000 per violation, including imposition of a $50,000 minimum.
Under last year’s House proposal, the serious failure-to-abate fine limit also would have increased from $13,653 to $70,000.
However, the most recent update to the reconciliation spending bill still being debated by the U.S. Senate does not mention or incorporate any provisions for raising the cap on civil money penalties regarding citations issued by OSHA, notes Raymond Perez II, an attorney with the law firm of Jackson Lewis.
“Labor and safety groups along with many Democrats have long advocated for higher OSHA fines which they argue will deter safety violations and encourage better employer compliance by reducing or eliminating workplace hazards that could lead to serious injury or death,” Perez observes.
Despite the stated good intentions, he points out that OSHA regulatory compliance can be extremely complicated and expensive even for large employers to comply with, and increasing penalties to such a high amount will not necessarily result in better outcomes.
In fact, massive fines would most certainly lead to employers being more likely to contest citations in drawn out litigation, Perez argues. “This would take away time and resources from actual compliance and would not serve the underlying purposes of the Occupational Safety and Health (OSH) Act.”
Another good reason for employers to dislike the currently high rate of inflation is that since the enactment of legislation in 2015, OSHA fines and civil penalties are adjusted upward each January to match the previous year’s rise in the Consumer Price Index (CPI).
On the funding front for the agency, Democrats serving on the U.S. Senate Appropriations Committee have proposed a $68 million dollar increase to OSHA’s fiscal budget for 2023. In total, Senate Democrats are intending to fund OSHA in 2023 with approximately $679.8 million dollars.
While certainly a significant increase from 2022 funding levels, this is considerably less than the $702 million requested by the White House or the $712 million OSHA budget that was already passed by the House this year, Perez points out.
According to the wording of the Senate Appropriations Committee legislative report, the additional funding is intended to increase OSHA’s critical enforcement activities to inspect the nation’s workplaces to prevent employee injuries and deaths. Under this proposal, all line-items for OSHA’s budget would be increased from 2022 levels. This includes $272 million dedicated to enforcement, while whistleblower protections would be funded at $27.5 million, and standards development at $27.5 million.
Perez believes that it also is likely that any budget increase for enforcement would be directed to hiring more Compliance Safety and Health Officers (CSHOs) in order to conduct an additional number of workplace investigations related to hazards that already have been prioritized by the agency, such as heat stress, workplace violence and ergonomics.
“While employers will need to be prepared for an expected rise in OSHA enforcement activity next year, at least for now it does not appear that it will come along with significantly higher penalties,” he says.
