On November 2, 2015, President Obama signed the Bipartisan Budget Act (the “Act”) of 2015 into law. P.L. 114-74. The Act changes the Federal Civil Penalties Inflation Adjustment Act of 1990, enacted at 28 U.S.C. §2461. These little-noticed changes have huge ramifications because they specifically remove OSHA from the list of agencies that are exempt from having the ability to raise fines. In other words, before this new law, OSHA’s fines stayed the same until Congress changed them. Now OSHA will raise them right away and will increase them every year.
The Act has a “Catch Up Adjustment” provision, which will allow OSHA to immediately increase its penalties by up to 150 percent no later than August 1, 2016. After the initial increase, OSHA will have to adjust its penalties annually based on the Consumer Price Index for the month of October. Experts say there will be an immediate expected increase anywhere from 52 percent to 80 percent. This means that fines for willful violations may increase from $70,000 up to $125,000, and fines for serious and other-than-serious violations may increase from $7,000 up to $12,500.
It is clear from this change that employers are at an even greater risk for substantial fines and penalties if and when OSHA opens an investigation in their workplaces. If you would like to speak to someone about how to prepare for an OSHA investigation, please contact our office.
We will continue monitoring for any updates from OSHA regarding the final rules implementing the Catch Up Adjustment, and any future annual adjustments to the penalties in place.