Experts divided on implications of OSHA fine hikes

By Alex Zank
The Daily Record Newswire
 
MILWAUKEE, WI — Health and safety experts are divided over how painful the sting is likely to be from a coming increase in the fines OSHA charges for violations of worksite safety rules.

The Occupational Safety and Health Administration, as the result of a provision in the 2016 federal budget recently signed by President Barack Obama, is expected to soon start increasing the fines charged for various job site violations. If the upward adjustment goes through as expected, it will be the first since 1990.

And the prospect of higher fines in the near future is not the sole source of concern in the construction industry. The recently signed federal budget also contains a provision calling for additional increases to be made every year in accordance with inflation as measured by the Consumer Price Index hereafter. Because prices have risen over the decades while the fines remained stagnant, the penalties’ “real economic value” has to be increased by 82 percent if they are to be made as potent as they were a century ago.

OSHA’s current fines vary widely in severity. The minimum cost for a willful violation of safety rules is $5,000. The maximum, often imposed on companies that commit the same violation more than once within five years, is $70,000.

If increased by 82 percent, the minimum would rise to $9,100 and the maximum to $127,400.

Daniel Kaplan, an attorney in Madison that counsels employers in all aspects of employer-employee relationships, said he sees little need for higher fines. He said businesses already have enough incentives to keep things safe. A clean record, he said, helps to both attract business and keep workers’ compensation costs down.

“I don’t personally believe an increase in the fine structure consistent with what was passed in the budget is necessary for employers to maintain a safe environment,” Kaplan said.

Kaplan said OSHA officials tend to be aggressive in handing down penalties.

Others, in contrast, have a hard time viewing the coming changes as constituting a real increase. Nola Hitchcock Cross, a Milwaukee attorney whose practice often involves workers’ compensation and OSHA cases, said the federal government is merely trying to counter the effects of inflation.

“They’re not really an increase; they’re reduced until they get that inflation bump,” she said. “It’s really a catch-up and maintain” measure.

“Really, we’re starting out with going even to what it was 15 years ago,” Hitchcock Cross added.

Kaplan, though, said he thinks OSHA should not be tying fine increases to the CPI. Even though the price of certain consumer goods has gone up, he said, it is not safe to assume that all businesses are making more money.

“What wasn’t expensive back then is expensive today,” he said. “I think increasing the penalties to the CPI and (applying) it to the 1990 structure is going to make an unbelievable increase.”

Kaplan predicted higher fines would lead some businesses to scale back their operations and hire fewer workers.

A defense of the proposal, meanwhile, came in October from David Michaels, OSHA assistant secretary.

“The most serious obstacle to effective OSHA enforcement of the law is the very low level of civil penalties allowed under our law, as well as our weak criminal sanctions,” Michaels said in remarks made before the U.S. House of Representatives Subcommittee on Workforce Protection. “Simply put, OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business.”

Hitchcock Cross said it’s important to remember that fines can be reduced. A business can receive a break, for instance, if it has a good safety record, is a small outfit or has violations that are relatively minor, Hitchcock Cross said.

Another method, the “good faith reduction,” also can result in lowered fines. Businesses can get reductions of that sort by promising to make procedural changes aimed at preventing a violation from recurring.

Hitchcock Cross said if employers cannot take advantage of any of those opportunities, they probably are not paying much attention to safety. Those happen to be the very same employers that OSHA wants to target, she said.