A Cloud of Silence Marks 82% Increase in OSHA Penalty Fees
The two year budget agreement that president Obama signed on November 2nd in closed door, surprisingly included a provision that authorized Occupational Safety and Health Administration (OSHA) to raise penalties by as much as 50% to a new historic high level of 82%. This is the first time OSHA penalties are being raised in 15 years. The last time this happened was during Bush Senior’s tenure in office. However, what many await to see is whether OSHA will increase the “catch-up” fee, strictly as stipulated in the new bill.
Observers and crafters of the budget agreement both agree that the OSHA portion of the bill is designed to compensate for two decades of lull, which has seen no increase in penalties. Despite the shocking increase, statistics indicate that OSHA fines are still relatively low compared to those charged by other regulatory agencies such as EPA. It is also important to note that this increment, will under no circumstances exceed the inflation rate for the fiscal years under review, which is from 1990 to 2015. The increase must be in line with the US government Consumer Price Index (CPI).
What the increase means
Once the increase is implemented, OSHA will move to increase the maximum penalties based on the previous year’s inflation rate, on a yearly basis. The increase means organizations or individuals caught for Repeat and Willful violations will be fined a staggering sum of $125,438; this is up from the current rate of $70,000. The current maximum fine of $7,000 that is charged for serious violations will also increase to $12,744.
Sentiments coming from the leaders of OSHA and the U.S. Department of Labor indicate that OSHA will most likely implement majority of the recommendations, even as the organizations comes into terms with the full impact of the bill. What is more surprising, is the fact the changes have been approved without public debate. Interestingly, many organizations have sought to have OSHA penalties increased over the years, but to no avail.
There is a silver lining
On the bright side, it is every business executive’s desire to keep workers safe and free from accidents. However, the punitive measures that are being enacted will act as a wake-up call to organizations to stay on top of safety issues. It is rather unfortunate that most businesses treat safety issues as a cost factor that should be dealt with by professionals and not part of a wider business plan to ensure business success. The changes being implemented by OSHA is expected to change how business is run.
The implementation process
The recommendations advanced by the budget committee regarding OSHA penalties are also likely to attract the ire of political scrutiny. This scrutiny may lead to the lowering of the maximum allowable fines, but we all a wait to see how the rule-making course will pan out. In the meantime, the Office of Management and Budget is expected to issue guidelines for implementing the provisions included in the bills by January 31, 2016. OSHA, on its part, is expected to publish an interim final rule regarding the bill by July 1, 2016.
The publication will be crucial, because it will allow the bill to come into effect by August 1, 2016. Once the bill comes into action, employers will be forced to respond to 250 or more National Labor Relations Board decisions that will nullify the existing employee handbooks and policies. The areas that will be affected include scrutiny of temps, Blacklist executive order and franchise operations among other areas of focus.
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Losers in the new bill
First, it is also important to point out that following OSHA standards and safety guidelines is not necessarily the same thing, even though there is some correlation. The disparity is glaring, if you consider the fact that having few injuries at the workplace doesn’t always mean, that your organizations is in compliance with OSHA guidelines. Secondly, a hazardous work environment can impact your employees negatively. Case in point, an employer can be cited for a number of violations including blocked exits and having poorly positioned fire extinguishers, among other safety concerns that may put workers safety at risk.
The employers that are more likely to be impacted by the penalties, include those who operate in multiple locations, where safety is not a priority. These workplaces, typically have high turnovers and weak or inadequate supervision. The companies in this equation mostly include manufacturing concerns and other industries that demand high lock-out procedures, frequent safety training and around the clock guarding.
Word of caution
Since the enforcement of the new guidelines is already in the offing, it is incumbent for employers and employees to take safety matters seriously because repeat violations mean more punitive penalties.
Article provided by NECHES FCU, an Equal Employment Opportunity Employer.
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