October 29, 2016

WARNING: This will probably be very boring to most of you but important if you are in manufacturing. Consider this a public service announcement.

OK, first let us take a look at the following definition:

The Occupational Safety and Health Administration (OSHA) is an agency of the United States Department of Labor. Congress established the agency under the Occupational Safety and Health Act, which President Richard M. Nixon signed into law on December 29, 1970.

The Occupational Safety and Health Administration, more commonly known by its acronym OSHA, is responsible for protecting worker health and safety in the United States. Congress created OSHA in 1971 following its passage of the Occupational Safety and Health Act of 1970 to ensure safe and healthy working conditions for workers by enforcing workplace laws and standards and also by providing training, outreach, education and assistance. Congress enacted the OSH Act in response to annual workplace accidents that resulted in 14,000 worker deaths and 2.5 million disabled workers annually. Since its inception, OSHA has cut the work-fatality rate by more than half, and it has significantly reduced the overall injury and illness rates in industries where OSHA has concentrated its attention, such as textiles and excavation. The administrator for OSHA is the Assistant Secretary for Occupational Safety and Health; the position answers to the Secretary of Labor, a member of the Cabinet of the United States.

You know how the FED works, laws are passed WITH penalties for violations. OSHA works in the same fashion. As of August 1, 2016, the dollar amounts for maximum civil penalties have increased considerably. If you are an employer and violate an OSHA regulation you can be fined. Congress has not raised the dollar figures since 1990, but last year they included a provision in budget legislation allowing all federal agencies to increase fines and penalties to match inflation. That twenty-six (26) year combination inflation rate total of seventy-eight percent (78%) was used to establish new amounts announced by OSHA on 1 July of this year. The new amounts will apply only to civil penalties after 1 August 2016 for associated violations that occurred after November 2, 2015, the date of enactment of the budget legislation.

In addition to the catch-up adjustment this year, the bill allows OSHA to continue raising fines annually to keep pace with inflation. While most statute violation penalties have been inflated every four years, OSHA and a few other federal agencies were previously exempted from raising their fines under the Federal Civil Penalties Inflation Adjustment Act. Moving forward, businesses can expect to see these annual increases by no later than January 15 of each year. The goal of this new change is to keep the fines up-to-date as a relevant penalty.

The U.S. Supreme Court has ruled that administrative civil penalties like those OSHA imposes on employers “are intended to punish, and label defendants wrongdoers”, which means they could be found to fall under the ex post facto ban. NOTE: The definition of ex post facto is as follows:

A law that makes illegal an act that was legal when committed, increases the penalties for an infraction after it has been committed, or changes the rules of evidence to make conviction easier. The Constitution prohibits the making of ex post facto law.

The American Heritage® New Dictionary of Cultural Literacy, Third Edition

To illustrate the impact of this change, we see the following:

Other-than-serious violation, from $7,000 to $12,471

Serious violation, from $7,000 to $12,471

Repeat violation, from $70,000 to $124,709

Willful violation, from $70,000 to $124,000

Failure to abate violation, from $7,000 to $12,741 per day.

Violation of a posting requirement from $7.000 to $12,471

If you manufacturer a product and have responsibility for safety in your facility, please take a look at all changes to the OSHA document and make sure you are aware of additional penalties. I have no idea as to why the FED decided to “catch up” with increases being other than incremental. I suppose they do it because they can do it.