Inflation may be causing Americans a lot of pain at the gas pump and in the grocery store, but it’s also causing intensifying headaches for American businesses. As it turns out, even federal agencies are raising their rates due to increasing inflation.
The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires that federal agencies make periodic adjustments to the fines they charge for non-compliance in order to keep pace with the economy as a whole. Essentially, every few years, agencies must put in place “catch-up” adjustments to ensure that fines are raised in accordance with the cost of living. The Occupational Safety and Health Administration (OSHA), which oversees worker safety regulations, is no exception.
How Are the New Fines Calculated?
To calculate the increases for OSHA fines, the agency uses a cost-of-living adjustment multiplier of 1.06222 for 2022 that is based on the Consumer Price Index for All Urban Consumers for October 2021 (not seasonally adjusted). To compute the 2022 annual adjustment, OSHA multiplied the most recent penalty amount for each applicable penalty by the multiplier, 1.06222, and rounded it to the nearest dollar. The adjustment factor of 1.06222 is consistent across the minimum and maximum penalties. OSHA will be increasing any penalties assessed after January 15, 2022.
Using the cost-of-living adjustment multiplier, OSHA’s maximum penalties for serious and other-than-serious violations will increase from $13,653 per violation to $14,502 per violation. The maximum penalty for willful or repeated violations increased by more than $8,000 to $145,027 per violation. (Find the full set of tables for penalties and classifications of penalties on OSHA’s website.)
Why OSHA Compliance is So Critical
The raised fees have significant financial implications for enterprises that are risking non-compliance.
“It is important for employers to be cognizant of these increases,” according to the law firm Greenberg Traurig. “While it might sometimes seem like an attractive option to simply accept a ‘serious’ penalty and pay the $14,502 fine instead of paying to challenge the citation, such instant gratification could pose issues (and serious financial headaches) for an employer in the future. This is particularly true where the timeframe for challenging a citation is short, making the business decision on whether to challenge the citation that much more difficult.”
Consult with a Professional Workplace Safety Organization
To comply with the complex regulations and avoid the new, higher fines for noncompliance, employers are encouraged to consult with a knowledgeable agent that can help them build a program that would reduce or eliminate the chances of OSHA fines.
Unishield has been providing businesses throughout Southern California with the highest quality safety training and compliance solutions for employers as well as a library of videotapes and related training manuals. In addition, Unishield offers first aid kits and medical supplies, first aid restocking services, industrial safety equipment, and portable emergency medical equipment such as the lifesaving AED (automatic external defibrillator). Call 800-480-5855 or visit our website for more information.