In regards to preserving your company’s bottom line, meeting new OSHA regulations and standards is now more important than ever. Here’s how to make sense of the latest regulatory changes that are most likely to affect your business.
Increasing fines
The Bipartisan Budget Act of 2015, which was signed into law last August, included a provision that requires OSHA to increase its civil penalties, which are imposed when an employer is cited for a violation. A bit of context: OSHA has been attempting to gain permission from Congress to increase these fines for a number of years, citing the low level of penalties allowed as “the most serious obstacle to effective OSHA enforcement of the law”.
Although these civil penalties have not been subjected to an increase in a full 25 years, the Act included a “catch up” provision that requires the increase to be based on inflation; specifically, the percentage difference between the Consumer Price Index (CPI) in October 1990 and October 2015, which is currently at 80 percent. After 2016, the law has also given OSHA the authority to adjust civil penalties for inflation on an annual basis.
For businesses, that means paying a significantly higher price for OSHA violations each year. Here’s an example of how three specific categories of violations will be affected:
- Maximum fine for serious violations: will increase from $7,000 to $12,700
- Maximum fine for willful and repeated violations: will increase from $70,000 to $127,000
The increased penalties will take effect in all states regulated by Federal OSHA by August 1, 2016, and State Plan programs are expected to follow suit shortly after.
Longer investigations
In the past, OSHA measured the effectiveness of its enforcement activity by the total number of inspections conducted. However, this often led to the penalization of field managers who had to devote extra time and resources to inspections that were more involved than “typical” OSHA inspections.
Instead of weighting all inspections equally, the new Enforcement Weighting System gives more weight to specific categories of inspections in order to encourage the commitment of additional resources to more complex investigations.
Employers should expect longer, more thorough inspections in 2016 and beyond, keeping in mind that the specific categories that are to receive more weight (and therefore, more hours of inspection) include ergonomic hazards and process safety management. In a memo sent out to regional administrators, the Assistant Secretary for OSHA made it clear that one of the main reasons behind the new weighting system was employers’ lack of motivation to create a safe work environment:
“Under the previous system, some employers may have surmised that we were unlikely to conduct an inspection looking at ergonomic hazards, or exposures to chemicals for which we have no standard. In order to maximize deterrence, it is important for employers to know that we may conduct inspections and issue citations for any sort of serious hazard, whether or not we have a specific applicable standard. This will better encourage employers to abate hazards before an OSHA inspection and, more importantly, before a worker gets hurt.”
Whether this is simply OSHA’s way of accounting for 25 years of inflation, or a direct attempt to punish employers for insufficient safety procedures, both regulations are worth getting familiar with. For more information, check out OSHA’s list of Federal Registers online.
