On January 2, 2018, the Department of Labor (DOL) published a final rule which adjusted upward the monetary penalties assessed for violation of its regulations, including those created by the Occupational Safety and Health Administration (OSHA). The adjustment is part of an annual requirement under the Federal Civil Penalties Inflation Adjustment Act of 1990, which requires the DOL to increase civil penalties each January. This year the DOL’s new regulations have increased the maximum monetary penalty amounts to the following thresholds:
- $12,934 per violation: for Serious, Other-Than-Serious, and Posting Requirement violations
- $12,934 per day: for failure to “abate” a hazardous condition
- $129,336 per violation: for Willful or Repeat violations
It is our experience that these increased penalty amounts will give OSHA area offices more leverage to pressure contractors into accepting citations, without contest, which may not be warranted or legally supported. This is because greater penalties affect Contractors’ decisions to contest or litigate open matters. For example, a contractor with what would have once been a relatively inexpensive citation, now faces penalties of up to $129,336. Further, the decision to contest that matter is stifled when considering potential legal fees, effects on employees, and the duration of trial. Many contractors simply do not want to risk the expenditure of resources on a matter that could still result in six-figure penalty amount. As a result, many contractors, business owners, and subcontractors choose long-term payment plans rather than standing on their rights and defenses to OSHA allegations.
This year’s penalty increases continue to place all of the bargaining chips on OSHA’s side of the table. OSHA can quickly convince an employer that they are being overly “generous” when offering penalty reductions, and contractors are taking the bait all over the United States. A small employer with less than 10 men on its crews will jump at the chance to get a 40% penalty reduction, when in reality, the contractor should be asking if the fine was justified in the first place.
The best line of defense against these increasing penalty amounts is prevention. Diligent employers must begin assessing the risk of the increased penalty amounts before a Compliance Officer shows up to take pictures across the street from their jobsite, and before a hundred-thousand-dollar citation arrives in the mail. This means ensuring that a compliant safety program is in place and all employees are adhering to that program, year-round.
If and when a citation arrives in the mail, the best defense becomes paperwork. If training, in-house site audits, and discipline are not documented, they did not happen. Contractors must document these events in order to build a safety program that is designed (sadly) not only to prevent injury, but also to defeat OSHA in court. In litigation, the greatest legal defense is the Unpreventable Employee Misconduct Doctrine. However, this defense is only feasible through rigorous documentation efforts, which include:
- a written Safety and Health Program in a language employees can understand;
- frequent and regular training in which safety and health rules are conveyed to employees;
- frequent and unannounced audits designed to assess jobsites and uncover non-compliant employee conduct; and
- a disciplinary action program that is used to deter employee misconduct and prevent safety violations.
As in years prior, this January’s penalty increases reinforce the importance of assessing compliance proactively, and prior to a citation being issued by OSHA. Further, when a citation is issued, contractors should carefully evaluate all available options before deciding to waive their right to contest and accepting these higher penalty amounts.
Author’s note: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation. Regulations and laws may vary depending on your location. Consult with a licensed attorney in your area if you wish to obtain legal advice and/or counsel for a particular legal issue.