Home > Property & Casualty > Federal penalties for workplace safety violations set to increase

Federal penalties for workplace safety violations set to increase

statehouseThe new bipartisan budget was passed by both the House and the Senate, and signed into law by President Obama on November 2. Provisions within the Bipartisan Budget Agreement of 2015 will increase federal penalties for workplace safety violations that are handed down from the U.S. Occupational Safety and Health Administration (OSHA). These penalties have not increased since 1990. The percentage change in Consumer Price Index (CPI) over the past 25 years will be taken into account, and penalties will continue to rise with inflation in the future. The increase from current penalty amounts will range from 70-80%. Despite this increase, OSHA fines will still remain small versus those of other regulatory agencies.

The penalty adjustment and future inflation will change how employers address citations and their financial implications, as well as OSHA inspections. In fact, the increase in fines should make OSHA enforcement easier and less cumbersome for businesses. This move will reduce the need to cite and combine minor violations in order to accumulate a higher amount that is more appropriate based on present CPI. For example, past OSHA inspections may include investigating a specific issue such as a single faulty machine. If there is indeed something amiss, OSHA will check other machines to ensure that those are functioning properly. OSHA may even go as far as investigating other facilities the company owns if they have reason to believe the issue is occurring elsewhere.

The best way for businesses to mitigate risk and avoid paying these increased penalties is to properly train employees in workplace safety, especially regarding hazard communication and right to know, lockout/tagout, and slips, trips, and falls protection. In addition, willful violations will be as high as $126,000 assuming an 80% catch up adjustment, so companies must have even more incentive now to address any and all known workplace safety concerns.


About the Author

Chuck_RogersChuck Rogers is an Area Senior Vice President at Gallagher WGA with 30 years of insurance experience. Mr. Rogers is responsible for the design, marketing, and implementation of Property and Casualty programs and advises all aspects of his specialty area, Loss Control Engineering.

617.646.03213 | Chuck_Rogers@ajg.com | Connect with Chuck on LinkedIn
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