“These administrative enhancements will become effective over the next several months, allowing affected OSHA personnel to become familiar with the changes and receive training. OSHA is also focusing on outreach in preparation for implementing the new penalty policy.
“Last year, OSHA assembled a work group to evaluate its penalty policies and found currently assessed penalties are too low to have an adequate deterrent effect. Based on the group's findings and recommendations, several administrative changes are being made to the penalty calculation system outlined in the agency's Field Operations Manual (FOM). “Monetary penalties for violations of the OSH Act have been increased only once in 40 years despite inflation.
“The penalty changes will increase the overall dollar amount of all penalties while maintaining OSHA's policy of reducing penalties for small employers and those acting in good faith. The current maximum penalty for a serious violation, one capable of causing death or serious physical harm, is only $7,000 and the maximum penalty for a willful violation is $70,000. The average penalty for a serious violation will increase from about $1,000 to an average $3,000 to $4,000.
“Note that the Protecting America's Workers Act would raise these penalties, for the first time since 1990, to 12,000 and $250,000, respectively. Under the Act, future penalty increases would also be tied to inflation.
Highlights of the memo include:
- The time frame for considering an employers' history of violations will increase from 3 years to 5 years.
- An employer who has been cited by OSHA for any high gravity serious, willful, repeat, or failure-to-abate violation within the past five years will receive a 10% increase in their penalty up to the statutory maximum.
- The time period for considering repeated violations will also increase from 3 years to 5 years.
- Area Directors will retain the authority to determine if a size or history reduction should be granted.
- High gravity serious violations related to standards identified in the Severe Violator Enforcement Program (SVEP) will not need to be grouped or combined, but can be cited as separate violations, each with its own proposed penalty.
- OSHA will adopt a gravity-based penalty determination that provides for a gravity-based penalty between $3000 and $7000.
- The current good faith procedures in the FOM will be retained. A penalty reduction is permitted in recognition of an employer's effort to implement an effective workplace safety and health management system. However, good faith reductions are not allowed in the cases of high gravity serious, willful, repeat, or failure-to-abate violations.
- The 15% Quick-Fix reduction will be retained. However, the 10% reduction for employers with a strategic partnership agreement will be eliminated.
- Final penalties will be calculated serially, unlike the present practice in which all of the penalty reductions are added and then the total percentage is multiplied by the gravity-based penalty (GBP) to arrive at the proposed penalty. The penalty adjustment factors will be applied serially as follows: History, Good Faith, Quick-Fix and Size.
- These changes establish general agency policy and will not preclude assessment of a different penalty where appropriate under the Act in light of the circumstances in a particular case.
