Last week, the Occupational Safety and Health Administration (“OSHA”) increased its maximum penalties via an interim rule.  The penalties are modified pursuant to the Federal Civil Penalties Inflation Adjustment Act, which requires federal agencies to adjust their penalties for inflation each year.  Until now, OSHA has been exempted from this law.

OSHA’s maximum penalties have not been raised since 1990.  The increases are significant: the maximum penalties will increase by 78%.  The maximum penalty for serious violations will increase from $7,000 to $12,471.   The maximum penalty for willful or repeated violations will increase from $70,000 to $124,709.   Except for willful violations, minimum penalties are not affected.  The new penalties are as follows:

•         Other than Serious violations: $12,471

•         Serious violations: $12,471

•         Repeat violations: $124,709

•         Willful violations: $124,709 (with a minimum penalty of $8,908)

•         Failure-to-abate violations: $12,471 per day

These increases may present a substantial increase in potential exposure for OSHA violations.  These increases may be significant enough to influence decisions to settle or contest OSHA claims, especially for small businesses.  OSHA’s website states that it will continue to provide penalty reductions based on the size of the employer and other factors.

The increases go into effect on August 1, 2016.  Public comments will be accepted until August 15, 2016.  The interim rule does not discuss whether the new penalties will be applied to inspections begun before August 1, 2016; however, OSHA’s website states that any citations issued by OSHA on or after that date will be subject to the new penalties if the related violations occurred after November 2, 2015.   OSHA will issue revisions to its Field Operations Manual by August 1 to provide guidance to field staff on the implementation of the new penalties.  Click here to find the interim rule.  

If you have any questions regarding these issues, please contact your OSHA counsel at Smith, Gambrell & Russell, LLP. 

This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice.