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Penalties under the U.S. Occupational Safety and Health Act will rise under the bipartisan budget bill signed by President Obama on Monday.
The Bipartisan Budget Act of 2015 features a provision called the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which would amend the Federal Civil Penalties Inflation Adjustment Act of 1990 to require all agencies with civil monetary penalties covered by the statute such as the U.S. Occupational Safety and Health Administration to update penalties, according to a bill summary.
The updated penalties would be based on their value in the last update prior to 1996 and the change in the consumer price index between that date and October 2015. The increase in penalties that results from this “catch-up” calculation would be capped at 150%, according to the summary. For example, a penalty now set at $10,000 could not increase to more than $25,000.
OSHA's monetary penalties have not been subject to inflationary increases and have been static since 1990, so the new bill “shakes up the status quo,” according to a blog post by Tressi Cordaro, a shareholder with law firm Jackson Lewis P.C. based in Reston, Virginia.
While employers are not eager to face increased fines, it's not shocking OSHA penalties would be increased, particularly when the current penalties are compared to the penalties that other agencies such as the Environmental Protection Agency can impose, she said in an interview.
OSHA will be required to adjust its penalties annually based on the index, according to the summary. Beginning in January 2017, updates to civil penalties will be published in the Federal Register each year by Jan. 15, and these adjustments will not require rulemaking, according to the summary.
The legislation also provides steps to “speed implementation” of these changes so that, if approved, the first adjustment to penalties would be published by July 1, 2016, at the latest and be effective no later than Aug. 1, 2016, she said.
The inclusion of the adjusted penalty structure in the bipartisan bill took OSHA watchers by surprise. “It literally came out of left field,” Ms. Cordaro said.
Federal safety regulators may be following the footsteps of their labor relations counterparts in potentially holding corporate entities jointly responsible for workplace safety violations that occur at the franchise level.