Beginning in October, the Occupational Safety and Health Administration (OSHA) will launch "administrative enhancements" to its penalty policies and Field Operations Manual. These enhancements are meant to improve the deterrent effect of a penalty. They will undoubtedly grab the attention of company management and safety and health professionals, probably resulting in the appeal of more citations.
"History" Expanded
Companies have been able to receive a 10% penalty reduction if they had not received a citation in three previous years. That "look-back" is now five years and the company must have been inspected and not cited. In addition, a company that has been inspected in the past five years and has received a high-gravity serious, willful, failure-to-abate, or repeat citation will receive a 10% increase in the penalty. Companies not falling into either category won't be affected.
"Repeat" Offenders
Similar to the adjustment for history assessment, the window for companies to receive repeat citations has expanded from three to five years.
Gravity-Based Penalties Increased
OSHA is implementing a new formula to determine the gravity based penalty, as shown:
| Severity |
Probability |
Gravity |
Former Gravity-
based Penalty |
New Gravity-
based Penalty |
| High |
Greater |
High |
$5,000 |
$7,000 |
| Medium |
Greater |
Moderate |
$3,500 |
$6,000 |
| Low |
Greater |
Moderate |
$2,500 |
$5,000 |
| High |
Lesser |
Moderate |
$2,500 |
$5,000 |
| Medium |
Lesser |
Moderate |
$2,000 |
$4,000 |
| Low |
Lesser |
Low |
$1,500 |
$3,000 |
Small Company Penalty Reduction
Small companies will continue to receive a penalty reduction, but not as great:
| Employees (at all locations) |
Former Penalty Reduction |
Current Penalty Reduction |
| 1-25 |
60% |
40% |
| 26-100 |
40% |
30% |
| 100-250 |
20% |
10% |
| 251 or more |
None |
None |
Penalties to be Calculated Serially
Formerly, a penalty was adjusted by an aggregated amount of penalty reduction. Under its new policy, OSHA will calculate – serially – the reduction of the proposed penalty, as such:
| Sample Data |
Summed |
Serially |
| High/Lesser |
$5,000 |
$5,000 |
| History (10%) |
|
$4,500 (-10%) |
| Good Faith (15%) |
|
$3,825 (-10%) |
| Quick Fix (15%) |
|
$3,251 (-15%) |
| Size (30%) |
10% + 15% + 15% + 30% + 70% |
$2,275 (30%) |
| Results |
$1,500 |
$2,275 |
Severe Violator Enforcement Program (SVEP) Violations
Under its Severe Violator Enforcement Program, announced in June, OSHA targets employers who "have demonstrated indifference to their occupational safety and health obligations… ." If a company receiving high-gravity serious citations through SVEP, those citations will not be grouped but will be cited separately, with separate penalties.
Conclusion
Employers in all industries should redouble their efforts to ensure OSHA compliance, through internal audits, increased training, employee-run safety committees and other measures. It's clear that the cost/benefit analysis of these programs is shifting in favor of proactive behavior by the employer.
For a more in-depth analysis or for general information on the various aspects of OSHA regulations and how they affect you, please contact your Baker Donelson attorney.