Construction Industry Reacts to OSHA Fine Increase Bombshell
Date Posted: November 18, 2015
Posted In: News,
From ConstructionDIVE: If you didn’t look too closely at the 2016 federal budget bill, which President Obama signed earlier this month, you probably missed a small provision that could have a giant financial impact on the construction industry. The U.S. Department of Labor’s Occupational Safety and Health Administration hasn’t made an upward adjustment of fines since 1990, and the new budget directs the agency to raise them and, on a yearly basis, keep them in line with the Consumer Price Index. The index has risen approximately 82% since 1990, so the initial change could see the dollar amount of OSHA fines skyrocket.
For example, although a violation of OSHA posting requirements would today result in a maximum fine of $7,000, after the new fines are implemented in August 2016, the same violation, given an 82% increase, could cost a company as much as $12,740.
However, that is a paltry sum compared to the potential fine for a willful violation, issued when OSHA determines an employer either knowingly failed to comply with a legal requirement or acted with “plain indifference” to employee safety. The current maximum penalty for a willful violation is $70,000, but, after adjustment for CPI, would be $127,400. Even if the fact that OSHA often reduces fines by as much as 50%-60% is taken into consideration, employers could still be looking at an amount that all but the largest companies would have trouble paying.