The OSHA penalty structure, which hasn’t changed since 1990, is about to get a boost to catch up with current prices. The long-standing maximum penalty amounts of $7,000 for a serious violation and $70,000 for a willful violation may jump to as much as $12,400 and $124,000 respectively. On the other end of the spectrum, in an extreme example of an enforcement action, OSHA, in conjunction with the U.S. Attorney’s Office, recently prosecuted an employer for violations under the OSH Act (and other federal laws), for making false statements to OSHA investigators which carries a maximum sentence of 25 years imprisonment.
The OSH Act of 1970 specified that the maximum penalty for a serious violation was $1,000, and the maximum penalty for a willful violation was $10,000. In 1990, the Omnibus Budget Reconciliation Act increased serious violations to $7,000 and willful violations to $70,000 and no less than $5,000. The Federal Civil Penalties inflation Adjustment Act of 1990 directed some agencies to raise their penalties, but exempted OSHA. For the past 25 years the OSHA penalty amounts have remained static. In November 2015, President Obama signed the budget bill, which included the Federal Civil Penalties Inflation Adjustment Act Improvements of 2015.
The 2015 Act directed the Department of Labor to make a “catch up adjustment” that must go into effect by Aug. 1, 2016, and to make subsequent adjustments thereafter. The “catch up adjustment” is based upon the increase in the Consumer Price Index from October 1990 to October 2015, which was 78 percent. Starting in August 2016, employers should expect to see OSHA penalties of approximately $12,400 for serious, and $124,000 for willful, violations.