As most business owners will tell you, following all the Occupational Safety and Health Administration (OSHA) standards can be burdensome, and paying OSHA penalties can put their companies in jeopardy.
Now, if recent actions by Congress are finalized, that financial hardship may be even more severe.
New OSHA Penalty Levels
Congress is currently debating a $3.5 trillion reconciliation bill, also known as the Build Back Better Plan.
As part of that legislation, the House Committee on Education and Labor recently approved maximum OSHA penalties at an astonishing level of $700,000 per item.
For violations categorized as “repeated,” “willful,” and “failure to abate,” the current maximum penalty is $136,532, making the new maximum more than five times higher.
For these same violation designations, the minimum fines would jump from $9,753 to $50,000. In addition, for violations categorized as “serious,” the maximum would rise from $13,653 to $70,000.
Beyond the higher penalty levels, this committee is earmarking $707 million for the OSHA budget, which is intended to fund whistleblower investigations, enforcement of current standards, development of new standards, compliance review and other activities.
With these substantial increases in fines and funding, lawmakers are undoubtedly attempting to illustrate their commitment to labor law enforcement and worker safety.
It has been five years since Congress has approved a consequential OSHA penalty increase. In 2016, the maximum fine for a “serious” violation increased from $7,000 to $12,471.
That same year, fines for “willful” and “repeated” violations increased from $70,000 each to $124,709.
In recent years, penalty amounts have risen gradually, keeping step with the Consumer Price Index.
In February 2019, penalty levels similar to those being discussed were introduced in the House of Representatives as part of the Protecting America’s Workers Act.
However, that bill was not passed.
COVID-19 Vaccine Mandates
As we all know, in early September, President Biden directed OSHA to create a rule that would require companies with 100 or more employees to mandate COVID-19 vaccines or at least require testing for those not vaccinated.
That directive has received pushback from many businesses and professional associations, but the OSHA rule will probably be issued relatively soon.
With that in mind, we must all realize that companies not in compliance with the vaccine mandate would be subject to the new penalty levels if they are signed into law as part of the reconciliation bill.
Advice for Employers
After the November 2020 presidential election, most business owners expected the Biden administration to encourage and support increased OSHA inspections and citations.
But these proposed penalty amounts are more significant than most of us anticipated.
If approved by the Senate, these fines could bankrupt all types of American companies.
More than just a deterrent to poor onsite safety conditions, these penalties could force businesses to close, resulting in many workers losing their jobs.
When facing these penalties, more business owners will likely have to hire legal counsel to fight the citations and negotiate reduced penalties.
That will result in high attorneys’ fees for these companies, costly trials, lost productivity as employees and agency officials testify, and increased backlogs for our court systems.
Our lawmakers’ concern for worker safety is commendable; however, these higher fines will harm small businesses that are already struggling to support their workers and make a profit.
At this time, it is uncertain if the proposed penalty levels will be approved by Congress and enacted.
But in anticipation of that decision, employers must strengthen their efforts in training their workers on safety procedures and following OSHA standards.
It is also critical for them to understand their rights during an OSHA inspection and know how to react to a citation.
Employers who have questions about OSHA standards should not hesitate to speak with legal counsel.
Experienced OSHA defense attorneys can offer invaluable advice regarding inspections, citations, violations, and penalty negotiations.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.