2016 OSHA Penalty Adjustments - Effective August 1st

In November of 2015, Congress passes legislation that mandated federal agencies to adjust their civil penalties to account for inflation. The department of labor is adjusting penalties for its agencies, including the Occupational Safety and Health Administration (OSHA). The new Bipartisan Budget Act of 2015, allows OSHA to raise citation penalties for the first time in 25 years. Since 1990, OSHA had been one of only three federal agencies that were exempt to inflation-causing adjustments to their fines. A section of the budget bill eliminates this exemption.

Initial OSHA Fine Increase

The Act gave OSHA discretion to increase the fines to less than the maximum amount, in case the increase would negatively affect the economy. The initial increase of penalties in 2016 will account for the previous 25 years of non-adjustments, dubbed the "catch-up adjustment". This initial adjustment will be based on the percentage difference between the Consumer Price Index in October 2015 and October 1990 - resulting in a penalty increase of approximately 80%. This increase will take affect August 1st.

2016 Maximum Penalties
Violation Type	Old Max Penalty	New Max Penalty
Serious Violations	$7,000 per violation	$12,471 per violation
Other-Than-Serious Violations	$7,000 per violation	$12,471 per violation
Posting Requirements Violations	$7,000 per violation	$12,471 per violation
Failure to Abate	$7,000 per day beyond the abatement date	$12,471 per day beyond the abatement date
Willful Violation	$70,000 per violation	$124,709 per violation
Repeated Violation	$70,000 per violation	$124,709 per violation

Future Increases

In addition to the catch-up adjustment this year, the bill allows OSHA to continue raising fines annually to keep pace with inflation. Most violation penalties have been inflated every four years, while OSHA and a few other agencies were exempt. Business can  expect these annual raises by no later than January 15th of every year.

What This Means for You

The increased fees in 2016 are very significant and may have a greater impact on smaller business or businesses who find it unimportant to implement measures to avoid penalties. Safety experts hope the companies will make work safety and OSHA standards a priority. To avoid a financial hit from increased penalties, employers are advised to:

• Ensure that safety programs are comprehensive and up to date.
• Make certain that employees receive all necessary safety training, can demonstrate understanding of training, and all training is well-documented.
• Inspect the workplace for hazards and address them as quickly as possible. We can do it for you! Contact us today for a facility survey.
• Talk with employees about safety concerns and address them as quickly as possible.

  With the largest inventory in Kansas City, Warehouse1 can help you keep your warehouse safe. We provide equipment that will keep your workplace up to OSHA standards, so you can avoid this year's penalty increase.