qm_summer_2016

26 / 32

Virginia Capitol C onnections, Summer 2016
26
Why the increase?
Federal OSHA has been one of only three federal agencies
since 1990 that was exempt from the Federal Civil Penalties
Inflation Adjustment Act. This Act required federal government
agencies to raise penalties to keep up with inflation. The 2015
Budget Act contains an amendment that eliminates this exemption
for Federal OSHA. On November 2, 2015 the Bipartisan Budget
Act of 2015 provided the federal Occupational Safety and Health
Administration (OSHA) with the ability to increase penalties for
workplace safety violations for the first time in 25 years.
In testimony given at a March 2010 hearing before the U.S
House of Representatives Education and Labor Committee’s
Subcommittee on Workforce Protection, Assistant Secretary
Michaels shared the Department of Labor’s views on the issue of
enhanced penalties. “Most employers want to do the right thing.
But many others will comply with OSHA rules if there are strong
incentives to do so. OSHA’s current penalties are often not large
enough to provide adequate incentives, and we are very low
in comparison with those of other public health agencies” said
Michaels1.
What is the increase?
The penalty increase will be based on a one-time adjustment
limited to the inflation rate measured by the Consumer Price Index
(CPI) from 1990 to 2015, which is expected to be around 82%.
Penalties will then increase every year based on the inflation rate
for the prior fiscal year.
Citations for Serious violations that previously resulted in a
$7,000 penalty will increase to approximately $12,000. Willful
citations could increase to as much as $126,000.
While these penalties may seem high compared to current
penalties, in general, Federal OSHA penalties are much lower
than penalties of other government agencies. The Environmental
Protection Agency (EPA) can impose much heavier penalties for
violations of the Clean Air Act. For instance, in 2001 a worker was
killed at a Delaware refinery when a tank containing sulfuric acid
exploded. His body was literally dissolved in the acid. The OSHA
penalty was $175,000. Yet, in the same incident, thousands of dead
fish and crabs were discovered, allowing the EPA to impose a $10
million civil penalty for a Clean Water Act violation2.
What does this mean for Virginia?
The new law does not provide any specific instructions on
how to implement the penalty increase to the 28 states that run
their own safety and health programs, Virginia being one of the
28. However, it is anticipated that the new federal penalty structure
will be required by the State Plan programs. Virginia, as well as
other States Plans are required to adopt comparable measures
that are “at least as effective as” in providing safe and healthful
employment to workers within the Commonwealth. While State
Plans can have penalty reduction policies and procedures that may
differ from OSHA’s, they must be deemed as stringent as OSHA’s.
Penalties have been an area of particular federal oversight
interest. OSHA monitors and evaluates State Plans annually
through the Federal Annual Monitoring Evaluation (FAME)
process. OSHA has established State Activity Mandated Measures
(SAMM) to assess State Plan Activities. One of the mandated
measures is the average current serious penalty. This measure is
tracked by the total and size of the employer. According to OSHA,
this measure was selected because of the role of penalties as part of
an effective enforcement approach.
When will the increase take place?
The increase will take effect August 1, 2016 at the federal
OSHA level. Accordingly, the Virginia Department of Labor and
Industry plans to submit a legislative package for consideration
by the 2017 General Assembly to increase maximum penalties in
Virginia to levels that will match those of federal OSHA. OSHA
has historically allowed states up to one year to adopt or amend
legislative changes.
The Department does recognize the potential impact
that an increase in penalties could have on employers in the
Commonwealth, particularly small employers which make up over
80% of the companies inspected by the Virginia Occupational
Safety and Health (VOSH) Program. Historically, VOSH has been
able to adopt a more prudent and reasonable approach to identify
ways that penalties can be used more effectively to encourage
employers to comply with VOSH rules both before and after a
compliance visit.
VOSH is here to help!
VOSH works closely with employers and workers in
cooperative and voluntary ways to enhance safety and health
protections in the Commonwealth. The Department offers free and
confidential On-Site Consultation Services to help small employers
better understand and voluntarily comply with VOSH standards.
DOLI also offers two voluntary recognition programs, the
Virginia Voluntary Protection Program (VPP), generally for large
employers, and the Safety and Health Achievement Recognition
Program (SHARP) for businesses of 250 workers or fewer.
National debate has focused on the perceived need for larger
penalties and their relationship to effective deterrence. OSHA
hopes higher penalty amounts will provide a greater deterrent
and further encourage employers to furnish a safe and healthful
workplace for all workers. This increase in penalty costs emphasizes
the importance of developing and implementing safety and health
programs in the workplace.
Effective safety and health programs, including policies,
hazard-recognition, training, management commitment, and
employee involvement ensure that workers are kept safe. A safe
workplace that is in compliance with VOSH standards can protect
against penalties from citations issues because of non-compliance
with standards.
Jennifer Rose, Ron Graham and Diane Duell are employees of the
Virginia Department of Labor and Industry.
576 North Birdneck Road #180
Virginia Beach, VA 23451
Phone: 757-513-3967
Fax: 757-962-4551
Email:
PoliticAl coNsultANts
Ken J essup
& A ssociAtes
Workplace Safety Violation Penalties to Increase
By Jennifer Rose, Ron Graham and Diane Duell
V