The Federal Civil Penalties Inflation Adjustment Act of 1990 exempted the Occupational Safety & Health Agency (OSHA) from increasing its penalties to account for inflation. This all changed last November when a new budget was signed into law containing an amendment that struck the exemption. OSHA fines will now increase for the first time in 25 years: The maximum penalty for serious violations is going from 7,000 to $12,471; the agency’s top penalty for willful or repeated violations is going from $70,000 to $124,709.
The new civil penalty amounts are applicable only to civil penalties assessed by the Department of Labor after August 1, 2016, for companies whose associated violations occurred after November 2, 2015, the date of enactment of the Inflation Adjustment Act.
In a press release from the Department of Labor, Secretary of Labor Thomas E. Perez said, “Civil penalties should be a credible deterrent that influences behavior far and wide. Adjusting our penalties to keep pace with the cost of living can lead to significant benefits for workers and can level the playing field [for] responsible employers who should not have to compete with those who don’t follow the law.”
In addition to the higher penalties, OSHA is also set to approach inspections differently, switching from trying to reach a certain number of inspections annually to conducting more rigorous inspections. This could result in more penalties per company because more violations can be uncovered during longer inspections. More detailed inspections could mean more employee interviews, provide the time to wait for sample results and make return visits, and generally dive deeper. This can mean more citations and bigger penalties.
Moreover, industries with higher accident rates, including the manufacturing industry, should expect to see more frequent and stringent inspections in the remainder of 2016 and beyond. Regions where violations are more common will also see increased OSHA attention.
The Importance of OSHA Compliance
OSHA compliance should be a top priority for all manufacturing firms to ensure that employees work in a safe and healthy environment. In the wake of being hit with significantly higher fines for violations, compliance becomes an even more important front-and-center issue. First, it’s important to understand what regulations apply to your business and the most frequent reasons for OSHA citations. Once you understand the regulatory environment in which you operate and the hazards associated with top violations specific to your industry, you can have a compliance audit performed that will identify any gaps and create an action plan to close them. You should also take a look at a trend analysis of the most common injury types that happen with your employees and create safety activities around those to mitigate or eliminate accidents.
As specialists in insuring manufacturing firms throughout California, Precision Manufacturing Insurance Services (PMIS) can assist you with hazard assessment, safety programs and OSHA compliance. Our goal is not only to insure you against the diverse risks you face but to also help you prevent losses and accidents from occurring so that you maintain a productive workforce and safe workplace, remain OSHA-compliant, lower Workers’ Compensation claims costs and keep insurance premiums in line.
To learn more about the manufacturing-focused programs we offer, including our portfolio of insurance products, regulatory compliance audits, compliance training, loss control, risk management, and claims management, please contact our staff at 855.910.5788.