Lawyers Warn Of Stepped Up OSHA Enforcement, Penalties

Lou Ferreira and Cory Haller, attorneys at Stoel Rives, said in a March 7 alert that recently enacted legislation allowing OSHA to raise penalties, along with the Justice Department’s recent announcement that it plans to step up criminal prosecutions for workplace safety violations, indicates that employers could face greater liability for any violations.

“As these changes make clear, there is a trend towards more aggressive enforcement of worker safety standards,” they write.

They cite two factors driving this trend. The omnibus budget bill that President Obama enacted late last year included language authorizing OSHA to increase penalties for alleged willful, repeat and serious violations of its standards. Annual adjustments going forward are also established.

Safety and health activists have long sought such an increase to address what they consider the low deterrent effect of OSHA fines.

But the legislation requires OSHA to promulgate by Aug. 1 an interim final rule before it can implement a one-time “catch-up” increase of penalty caps to match inflation since 1990, when maximum fines were last authorized.

OSHA, unlike most agencies, could not under federal law increase the penalty ceiling to adjust for the Consumer Price Index until the recently enacted budget agreement that contains provisions for increasing OSHA fines. The unexpected panel cap increase also provides for regular annual adjustments based on inflation moving forward.

OSHA Administrator David Michaels told InsideOSHAOnline that the agency would not proceed with its rulemaking until it receives guidance from the Office of Management and Budget.

Ferreira and Haller says that OSHA has authority under the new law to increase its penalty amounts by as much as 82 percent, though the law does not require such increases. For example, penalties for serious violations could increase from $7,000 to $12,740 while penalties for “repeat” and “willful” violations could increase from $70,000 to as much as $127,400.

The two lawyers say that while the increased penalty amounts could still be comparatively low compared to other regulatory fines, they could still have significant impacts especially on employers with facilities in multiple locations and large operations. That is because recent enforcement actions by OSHA have treated “separate corporations under the same management as a single entity” for the purpose of determining “repeat citations.”

As a result, “relatively minor infractions repeated across numerous locations could result in significantly higher fines under the new regime,” they say.

Ferreira and Haller say the other major factor driving prospects for stepped up enforcement is the Justice Department’s December announcement that it will consolidate responsibility for prosecuting many workplace safety violations in its environmental division and urge prosecutors in those cases to use environmental laws that provide for more stringent penalties than labor laws.