Federal penalties for workplace-safety violations were increased this week for the first time since 1990, thanks to a littlenoticed provision of the budget bill signed into law by President Barack Obama.
The move would bring the fines in line with inflation over the past 25 years. In the future, fines from the U.S. Occupational Safety and Health Administration and state workplace-safety agencies would continue to rise with inflation.
Still, even after an expected increase of as much as roughly 80%, OSHA fines will remain tiny compared to those issued by many other regulatory agencies, such as the Environmental Protection Agency. The new fines are due to be set some time next year.
Workplace-safety experts from both industry and labor said they were caught by surprise by the new mandate, which they say will likely increase maximum fines for the most severe citations to $125,000 from $70,000 and for other serious violations to $12,500 from $7,000. The maximum allowable fines may also end up being lower than that following a rule-making process, they say.
OSHA was one of only a handful of federal agencies that were specifically exempted from a 1990 bill that required federal agencies to raise their fines to keep pace with inflation.
Even one prominent lawyer who has represented industry interests in workplace-safety issues for decades said he couldn't argue with the increase.
“It's very difficult to defend the present penalty structure,” said Baruch Fellner, who has long represented industry interests on OSHA issues. “If you look at OSHA penalties in the context of other programs, they are in fact for individual items minuscule comparatively speaking. For larger corporations it can be a cost of doing business.”
An OSHA spokeswoman said the agency is still reviewing the legislation.
“It's progress,” said Peg Seminario, who directs workplace-safety policy for unions under the AFL-CIO. “It's bringing the penalties for worker-safety violations up to date.”
The average fine last year for an incident in which a worker died was $7,000, reduced to $5,050 following settlement talks, according to the AFL-CIO.
Mr. Fellner, the industry lawyer, said he hopes higher maximum fines per citation might make OSHA enforcement easier for businesses overall by making the agency less likely to try to combine more nitpicky citations in order to reach higher penalty amounts.
Some industry representatives said they would work within the rule-making process to oppose the higher fines, worried they would be onerous for small business.
“This has the potential to have a pretty significant impact,” said Rob Matuga, who directs labor policy for the National Association of Home Builders. “Our housing industry is just making a comeback.
”Similar provisions had been inserted into bills introduced by Democrats in Congress every session for more than a decade, but those bills had never moved forward amid opposition from business groups. Unlike the current changes, the bills had higher penalty options for violations that resulted in a worker's death.
Courtesy: The Wall Street Journal