In 2015, Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act to advance the effectiveness of civil monetary penalties and to maintain their deterrent effect. The new law directs agencies to adjust their penalties for inflation each year using a much more straightforward method than previously available, and requires agencies to publish “catch up” rules to make up for lost time since the last adjustments.
As a result, OSHA, a division of the United States Department of Labor, has recently enacted a 78% increase in their maximum penalties for violations related to occupational safety and health. OSHA's top penalty for serious violations, which has not been increased since 1990, will rise from $7,000 to $12,471. The maximum penalty for willful or repeated violations will increase from $70,000 to $124,709. In addition, the agency will continue to adjust its penalties each year according to inflation using the consumer price index. This is a major change for agency whose penalty structure has remained unchanged for over 25 years.
In states where Federal OSHA has jurisdiction, these changes took effect on August 1st, 2016. State plan states, those where a state agency has been granted jurisdiction, are required to adopt maximum penalty levels that "are at least as effective as" the Federal OSHA penalties. This can be interpreted as meaning that state plan states will most likely adjust their penalty structures to match in the very near future (in general, states have 90 days to adopt new Federal OSHA regulations).
For more information and links to fact sheets, frequently asked questions and penalty guidance published in OSHA's Field Operations Manual, click here to visit the penalty page of OSHA's web site. To read the rule in its entirety, click here to read the official posting in the Federal Register.