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Center for Progressive Reform



OSHA's Discount on Danger

Settlement Policies Should Maximize Deterrence

Since the beginning of the Obama Administration, more than 30,000 workers have died on the job from traumatic injuries. But in all of the worker fatality investigations that the U.S. Occupational Safety and Health Administration (OSHA) has closed out during that time, the median penalty issued to employers that had violated rules was just $5,800 — less than the cost of an average funeral, and far less than is necessary for penalties to have a genuine deterrent effect on companies tempted to skirt worker-safety rules.

In a June 2016 report, CPR scholars and staff broke down the data behind such paltry fines and recommended a series of reforms.

It turns out that two key factors drive down the fines. First, until 2016, OSHA fines were capped by statute — maxing out at $70,000 for even the most egregious violations, and Congress prohibited OSHA from even adjusting its penalties to keep pace with the rate of inflation. But in 2015, Congress and the President enacted a budget agreement that includes a provision authorizing OSHA to raise the cap on its maximum penalties to account for inflation since 1990. Indeed, CPR’s report came out the day before the legal deadline for OSHA to increase maximum fines —the first time it had done so in more than a quarter of a century.

The second factor driving such miniscule fines for worker deaths is OSHA’s routine practice of discounting its own fines. According to CPR’s analysis, during the Obama administration, OSHA has systematically discounted fines in cases involving worker deaths, closing cases at a median discount of 25 percent below its initial fines. While an act of Congress was required to raise the maximum fines, no such legislation is needed with respect to discounts. As co-author Thomas McGarity said, “The agency doesn't need congressional legislation to fix the way it settles citations with scofflaw employers or to maximize the deterrent effect of the fines it gives to companies that break the law."

The analysis is part of OSHA's Discount on Danger: OSHA Should Revise Its Informal Settlement Policies to Maximize the Deterrent Value of Citations. The report calls on OSHA to seize the adjustments of its civil penalties as an opportunity to implement several vital reforms, including:

  • Issuing national guidelines discouraging the agency's area offices from "informally" settling cases involving egregious safety failures.
  • Requiring scofflaw employers to do more than simply abate the hazards that caused a specific health or safety violation, including, for example, developing a formal injury and illness prevention plan or implementing comprehensive third-party safety audits.
  • Reaching out to engage workers and their representatives in the settlement process.

The report’s authors are CPR Member Scholars Martha T. McCluskey, Thomas O. McGarity, Sidney Shapiro, and CPR Policy Analyst Katherine Tracy.

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