When the Occupational Safety and Health Administration (OSHA) inspects a workplace and finds serious health and safety violations, the agency ideally would penalize the employer that broke the law and require it to correct the violations immediately. Unfortunately, OSHA’s enforcement program does not operate this way because of statutory and budgetary constraints that have eroded the agency’s ability to enforce its standards effectively.
Maximum civil penalties for occupational health and safety violations are far too low to deter employers from breaking the law. Until 2016, OSHA fines were capped by statute — maxing out at $70,000 for even the most egregious violations. But the 2015 budget agreement authorized OSHA to adjust for inflation since 1990 when the initial caps were fixed in statute — a roughly 78 percent increase, with annual adjustments to follow. As a result, after August 1, 2016, serious violations – those causing a substantial probability of death or serious physical harm – carry a maximum penalty of just $12,741, and penalties for willful and repeat violations are capped at $124,709.
Even after the inflation adjustments, these penalty amounts, which are largely mirrored in the states that oversee their own OHS programs (state-plan states), are too low, especially when compared to penalties for actions that threaten the environment or wild animals. For example, the U.S. Environmental Protection Agency can impose a penalty of $25,000 per day for some violations of the Clean Air Act, and the maximum penalty for a single violation of the South Pacific Tuna Act is $350,000.
Worse, in practice, most penalties never even approach the meager maximum permitted under the law. The OSH Act requires federal OSHA to consider the employer’s size, good faith, and history of violations in determining the appropriate penalty amount. Over the years, the “consider” requirement has morphed into written policies that require inspectors to apply significant penalty reductions based on these factors in virtually all cases. Many state programs automatically reduce their proposed penalties just because the employer was “cooperative,” without any justification.
Additionally, the OSH Act does not authorize the agency to order employers to fix dangerous conditions immediately. If an employer challenges a citation, it is not legally obligated to correct the hazardous condition until the case is decided. This process can take months or even years, endangering workers in the meantime. As a result, the agency routinely agrees to penalty reductions and other concessions in exchange for an employer’s promise to fix hazardous conditions immediately and not challenge the citation. Because of these budgetary and statutory constraints, the agency’s civil penalties are so paltry that their deterrent value is negligible.
What’s the Solution?
In states where federal OSHA has jurisdiction for worker health and safety, Congress will need to act to increase OSHA’s budget, increase the civil penalty amounts, and close the appeals loophole. But in states that oversee their own OHS programs under a state-plan approved by federal OSHA (state-plan states), state legislatures and state OHS agencies can introduce measures that will improve their enforcement of OHS standards within their borders.
Update Civil Penalty Amounts: Legislators in state-plan states should enact laws that strengthen the penalizing and deterrent effects of OHS agencies’ civil penalties. The updated laws should set penalties that employers cannot simply absorb as if they were merely a cost of doing business, enhance penalties for violations that cause or contribute to a death or serious bodily harm, and extend the mandatory minimum penalty for willful violations to repeat violations.
Mandatory Minimum Penalties for Certain Persistent Hazards: State-plan states should also adopt special mandatory minimum penalties to deter violations that recur with disturbing regularity, despite the obvious nature of the hazard and the existence of clear safety standards or well-known methods of mitigating the hazard. For example, violations of standards for confined spaces, trenching, grain handling, and safety guards all warrant mandatory minimum fines.
Improve Penalty Calculations and Eliminate Unwarranted Reductions: State-plan states can further strengthen civil penalties by putting constraints on OHS agencies’ penalty-adjustment policies. One approach is for state-plan OHS agencies to stop applying certain reductions to virtually every citation. Advocates could directly lobby their state agency to urge them to stop the automatic reductions; however, the best way to ensure that these changes become permanent would be to press state legislatures to prohibit such unwarranted reductions by law.
The most powerful change that state-plan states could make would be to eliminate the requirement that OHS agencies consider the size, history, and good faith penalty-reduction factors. A more targeted fix would be to prohibit agencies from applying the maximum allowed reduction for employer size when the employer has a history of serious violations. Another fix would be to eliminate reductions that reward the employer for doing what it should already be required to do—bring its operations into compliance with the law. For example, states could abandon reductions for “cooperating” with the agency, and for quickly fixing hazards.
An even more limited approach is to ensure that all state-plan OHS agencies have adopted the most recent federal OSHA penalty-reduction policies. Advocates should argue that the states that have not adopted OSHA’s penalty policies do not have a program that is “at least as effective” as federal OSHA, a requirement established by the OSH Act. Advocates could press this point and urge the state to match or exceed federal OSHA’s policies.
Mandatory Minimum Penalties. Several states have set mandatory minimum penalties for violations that cause or contribute to a worker’s death. Virginia’s OHS program does not permit any penalty reductions for such violations; instead, it automatically assesses the maximum allowable penalty in all cases. In 2010, the Minnesota legislature adopted a law that set minimum non-negotiable penalties for fatality cases: $25,000 for a serious violation and $50,000 for a willful or repeat violation. Minnesota also has a mandatory minimum penalty of $25,000 for all willful violations by employer with more than 50 employees. Some states impose mandatory minimum penalties for violations related to certain kinds of hazards. For instance, California applies a $140,000 penalty, which is not subject to any adjustment, for serious or willful repeat violations of any crane standard.
Penalty Calculation and Reduction Policies. In 2010, Fed-OSHA improved its policies for calculating and adjusting penalties and further modified its penalty policy in 2012. Yet after the 2010 modifications were announced, most of the state-plan states objected to adopting the new policies. Such objection may present a challenge for advocates looking to work with the state OHS agency to ensure its program is “at least as effective” as Fed-OSHA’s.
Connecting to Other Policy Reforms. Expanding civil penalties is closely related to closing the loophole that allows employers to avoid fixing health and safety hazards, as both reforms are needed to address weaknesses with agencies’ enforcement of workplace health and safety standards. For more info on how advocates can address this loophole, check out our “Fix it First” page.