OSHA increase in penalties

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An overview of OSHA's recent announcement about a change in its enforcement policiies

An overview of OSHA's recent announcement about a change in its enforcement policiies

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  • 1. OSHA NEWS RELEASE April 22, 2010
  • 2. OSHA NEWS RELEASE STATES
    • “ For many employers, investing in safety happens only when they have adequate incentives to comply”
    • “Higher penalties and more aggressive, targeted enforcement will further encourage these employers to provide a safe workplace”
  • 3. Severe Violator Enforcement Program
    • “ The new Severe Violator Enforcement Program (SVEP) is intended to focus OSHA enforcement resources on recalcitrant employers who endanger workers by demonstrating indifference to their responsibilities under the law”
  • 4. Recalcitrant
    • adjective :   marked by stubborn resistance to and defiant of authority or guidance
  • 5. SVEP
    • Includes “inspections of other work sites of the same employer where similar hazards and deficiencies may be present”
    • It will include “a more intense examination of an employer’s practices that would trigger additional mandatory inspections”
    • “SVEP will become effective within the next 45 days”
  • 6. PENALTIES Monetary penalties for violations have only increased once in 40 years.
  • 7. Penalties Increasing
    • Last year OSHA assembled a work group to evaluate the agencies penalty policy
    • The general consensus of the group was that the penalties are to low to have an adequate deterrent effect
    • This is changing in the next few months
  • 8. History Reduction
    • The time frame for considering an employer’s history of violations will expand from three years to five years
    • An employer who has been inspected by OSHA within the previous five years and has no serious, willful, repeat, or failure to abate violations will receive a 10 percent reduction for history
  • 9. History Increase
    • An employer who has been cited by OSHA for any high gravity serious, willful, repeat or failure to abate violation within the previous five years will receive a 10 percent increase in their penalty
    • High-gravity serious violations - include fall hazards and hazards identified from the following National Emphasis Programs (NEPs): amputations, combustible dust, crystalline silica, excavation/trenching, and lead
  • 10. History Increase
    • Employers who have not been inspected or received any citations in the past five years will not see an increase or reduction
  • 11. Repeat Violations
    • The time period for repeat violations will also be increased from three to five years
  • 12. Penalties Increasing
    • Not just for SVEP but for all inspections
    • The current maximum penalty for a serious violation, one causing death or physical harm, is $7,000
    • The current maximum penalty for a willful violation is $70,000
  • 13. Penalties Increasing
    • The Protecting America’s Workers act will increase the penalties to $12,000 and $250,000, respectively
  • 14. Penalty Deductions
    • Area Directors will be able to offer up to 30 percent reductions at informal conferences
    • Area Directors will also be able to offer an employer with 250 or fewer employees an additional 20 percent reduction if that employer agrees to retain an outside safety consultant
  • 15. Penalty Deductions
    • OSHA will no longer allow penalty adjustments to an employer at an informal conference where the employer has an outstanding balance owed to OSHA
  • 16. Penalty Deductions
    • OSHA will be adopting a new penalty reduction structure for size as illustrated on the next slide
    • It will allow for penalty reductions of between 10 and 40 percent for employers with less than 250 employees
    • No reductions for employers with 251 or more employees
  • 17. SIZE REDUCTIONS 40 1- 25 None 251 or more 10 101 - 250 30 26 - 100 Percent Reduction Employees
  • 18. Penalty Deductions
    • The current “Good Faith” reduction is permitted in recognition of an employer’s effort to implement an effective safety and health management system
    • Employers must have a safety and health program in place to get any good faith reduction
    • Good faith reductions are not allowed in the cases of high gravity serious, willful, repeat, or failure-to-abate violations
  • 19. Penalty Deductions
    • The 15 percent “Quick Fix” reduction which is currently allowed as an abatement incentive to encourage employers to immediately abate hazards found during an inspection will be retained
  • 20. Strategic Partnership Agreement
    • The 10 percent reduction for employers with a strategic partnership agreement will be eliminated
  • 21. Additional Administrative Modifications
    • 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 to arrive at the proposed penalty
  • 22. Old System
    • Simplified example of old system: A company with two fines - $500 fine and a 15 % reduction and a $1000 fine with a 10% reduction
    • Total fines $1500 minus 25% (10% + 15%) = $1,125 fine
  • 23. New System
    • A company with two fines - $500 fine and a 15 % reduction and a $1000 fine with a 10% reduction
    • $500 fine minus 15% reduction = $425 $1000 fine minus 10% reduction = $900 fine
    • Total Fined = $1,325
    • OSHA expects an increase of 50 % in fines
  • 24. Conclusion
    • The average penalty for a serious violation will increase from $1,000 to $3,000 - $4,000
    • OSHA hopes that higher penalty amounts will provide a greater deterrent and further encourage employers to furnish safe and healthy workplaces for their employees
    • These changes are to take effect in the next few months