Employers take heed. Occupational Safety and Health Administration’s (OSHA) penalties are taking a huge jump, making it even more important that you take steps to protect your company’s OSHA record to avoid potential repeat citations. The financial impact of an OSHA citation will now become more punishing, especially for small business owners.

A relatively obscure provision buried in the 1,600-page, 2015 budget bill passed by Congress, and signed into law by President Obama on Nov. 2, 2015, is responsible for the bigger fines. It allows OSHA fines to keep pace with inflation. The bill was the Bipartisan Budget Act of 2015, H.R. 1314, Sec. 701.

The new “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015” now allows OSHA to catch up with the past 25 years of inflation and boost its penalties accordingly. The allowed increase is the difference between the Consumer Price Index (CPI) from October 1990 and the unreleased CPI of October 2015. Using the CPI for September 2015 as a guide, it can be expected that the increase will be almost 80 percent.

For instance, a company found guilty of committing willful or repeated safety violations would have its maximum fine rise from $70,000 to $124,709 under the new mandates. Fines for lesser offenses would increase from $7,000 to $12,471 per day. The fine structure hadn’t been updated since 1990. After that, the maximum penalties would increase with the inflation rate every year.

This would have the following effect:

Citations Current Max. With Catch-Up Increase
Other than Serious Up to $7,000 Up to $12,740
Serious $7,000 $12,740
Repeat $5,000-$70,000 $9,100 – $127,400
Willful $5,000-$70,000 $9,100 – $127,400
Failure to Abate $7,000/day $12,740/day

 

Three specific items related to OSHA that you should know and immediately address are:

1.) understanding the new penalties,

2.) ensuring that you have a reporting procedure for workers and have informed them of it,

3.) being aware of whether any of your occupations are on the high-hazard list for OSHA inspections.

Also, make sure you have posted the most up-to-date required posters, which can be downloaded from your state department of labor website. Also, consider conducting an internal audit to determine your company’s compliance with OSHA standards.