Sunday, November 1, 2015

OSHA Penalty Caps are Increasing - Significantly!

With the stroke of a pen, President Barack Obama will sign into law on Monday (11/02/15) the Bipartisan Budget Act of 2015. This means no more squabbling for the next two years about shutting down the government by threatening to withhold passage of the federal budget. Additionally, the White House claims this bill, which increases government spending and debt limits, will stimulate the nation’s economy. But nothing comes for free; passage of this Act also means your OSHA penalties will be going up – significantly!
 
Many people mistakenly believe that employers pay monetary penalties attached to federal OSHA citations directly to OSHA, making them a self-funded agency. But that is not true. The monies actually go . . .
  
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8 comments:

  1. Interesting article, thanks for sharing. One item I'd like to point out; you state, "The maximum penalty allowed for an “Other than Serious” citation is currently $1,000....", isn't it now $7,000 instead? Per OSHA's "Introduction to OSHA" PowerPoint file for 10 and 30 Hour Outreach classes, it states $7,000.

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    1. Dwayne. You are correct., I still had the old limit stuck in my mind. Already made the correction. Thanks for taking the time to reply.

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  2. This is a very misleading article. 1. The budget has not passed yet. 2. This is not a guarantee that there will be maximum penalty increases. It is up to the "Head of the Agency" to determine is penalties are accurate and need to be increased. If we had a more conservative agency head (assuming this is Dr. Michael's decision), he would actually understand that increasing penalties would potentially have a negative economic impact. There is an exception in the bill that allows the agency head to not raise penalties if:

    (A) increasing the civil monetary penalty by the otherwise required amount will have a negative economic impact;

    I would recommend reading the actual bill before jumping to conclusions about how it will affect the regulatory environment.

    http://docs.house.gov/billsthisweek/20151026/BILLS-114hr-PIH-BUDGET.pdf

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    1. Dear Anonymous. Thank you for taking the time to reply to my blog and express your views. Here are my responses to your concerns.

      You say the budget has not passed yet, but in actuality both the Senate and House of representatives passed the budget last week, and President said he would sign it on Tuesday - but I see he actually signed it a day earlier (on Monday afternoon)!

      You also state that the agency does not HAVE to raise penalties, and that a future administration may choose not to. But the ACT actually directs OSHA to adjust their penalties via the catch-up adjustment (the big one) before a certain date in August 2016, which is before the current administration is finished with this term.

      And regarding the passage stating that an agency head does not to assess the higher penalties in cases of a "negative economic impact", the current OSHA administration wants to assess higher penalties (as evidenced by their actions to date) and actually go on record as saying higher penalties will increase employer compliance with safety reg's, which ion turn would result in fewer injuries and associated costs, which would in turn result in a "positive" economic impact. So don't bet the ranch on the current administration opting out!

      Again, thanks for your reply.

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  3. Thanks Curtis. I enjoy your updates and find them very valuable. - Nicholas LaTier

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  4. Dear Curtis Chambers,

    You seem to have abandoned all pretense of objectivity with the release of the article titled Limits on OSHA Penalties Quietly Increased.

    The price we all pay for the abandonment of objectivity, is the death of honest discourse.

    Facts:

    ü OSHA and the EPA were both instituted by acts of congress in 1970.

    ü The EPA had its fine structure established to increase with inflation.

    ü OSHA had its non-litigation fine structure, to only increase with Congressional approval.

    ü Both laws were signed into law by President Richard Nixon. Apparently this was a time when Republicans still cared about People dying in preventable accidents , and about our Nations environment.

    Please refer to the testimony of David Michaels Assistant Secretary for OSHA U.S. department of Labor before the subcommittee on workforce protections, the committee on education and Labor U.S. House of Representatives March 16,2010.

    “ In 2001 a tank full of sulphuric acid exploded at a Motive refinery A worker was killed… OSHA Penalty was $175,000 … EPA Violation 10 Million – 50 times higher.”

    “Because OSHA’s criminal penalties are considered misdemeanors Federal Prosecutors often regard these cases as a poor use of scares resources. Since passage of the OSHA act in 1970 fewer than 100 cases have been prosecuted while 300,000 workers have died from on the job injuries.”

    There are plenty of venues for American citizens to express their Constitutional rights of free speech. I support that right, but do not think that this is the correct forum for you to exercise that right.

    Trust me, I don’t think that the projected increase in revenue from this Non-litigation fine structure increase, is going to make much of a dent in our National Debt or budget. The total impact from these fines will compare much more like $1 off the price of a new car in relationship terms.

    The death of honest discourse, is the fundamental first step, to the death of democracy. - Graig Habermann

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    1. Graig. Thanks for your reply. The ACT just signed into law specifically cites the increased OSHA penalties as one of the types of adjusted penalties to be implemented to help pay for the new budget. True, it may only make a small dent in the cost, but that is the exact reason they made this change. And that runs counter to OSHA's reason for wanting higher penalties (to goad employers towards fewer citations). Sorry of you have a problem with my relaying that info.

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    2. Thank you Curtis for the opportunity for an open dialog.

      In the end OSHAs reason to increase fines can still be accomplished, despite the method in which the increases were put into law.

      Essentially our political format dictates how laws are made, appealed, or voted out.

      The democrats believe they can trust the Government to solve the major Issues facing society.

      As such they are willing to pay the necessary taxes to do so, and maintain an expectation that all members of society should be willing to pay their fair share of the tax burden.

      They also believe the keys to economic growth depend on, a strong middle class, this requires Union bargaining rights, adequate Safety laws, regulations, and enforcement.

      The Republicans believe that our current centralized form of Government has become too large, and that the current tax system creates an undue burden on economic development.

      As such they believe in each citizen accounting for their own economic needs, through a strong work ethic, a willingness to accept risks, and invest in their own future.

      Their keys to economic growth tend to focus in cutting Government subsidies, welfare, and count on Business to provide that which we need.

      I personally am a moderate that values the contributions that each side has made to make this a great Nation.

      However I do tend to have more compassion for those members of society that have fallen short of realizing their own potential, and now find themselves destitute.

      Their condition could be brought on by poor choices they have made such as a teen pregnancy or drug abuse. Some could find themselves broke due to a financial collapse

      In the stock market. This collapse could have resulted in poorly thought out de-regulation measures, or outright deception and greed. Either way I still maintain compassion for the 70 year old citizen now working at a fast food franchise to supplement his retirement due to the losses he took from a financial institution he placed too much trust in.

      So if the increased fines can help to goad employers to better protect their employees due to fear of higher fines, and the Democrats can sell this increase to their constituents as better protections for the working class that build this great country, and The Republicans can sell this to their constituents as fees that will help to pay off our debt, I say Great. The spirit of compromise is alive and well, therefore democracy is alive and well. - Graig H

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