An OSHA Violation Today Can Cost You Almost 80% More in Penalties After August 1, 2016

osha-logoThe maximum penalty that the Occupational Safety and Health Administration (OSHA) can assess for a violation of an OSHA standard has been a constant source of consternation within the agency as well as with workers’ rights advocates. The statutory maximum, which currently is set at $70,000 for willful and repeat violations and $7,000 for serious and other than serious violations, has remained unchanged since 1990. The Protecting America’s Workers Act (PAWA), first introduced by Senator Edward Kennedy in 2004, and reintroduced in each congressional session since 2004, sought to increase the maximum amount of statutory penalties as well as make other changes to the Occupational Safety and Health Act. In each congressional session, PAWA died in committee.

But a little known section of the Bipartisan Budget Act of 2015, which authorized funding for federal agencies through September 30, 2017, will change all of this.

Section 701 of the Bipartisan Budget Act of 2015 contains the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015, which requires OSHA and most other federal agencies to implement inflation-adjusted civil penalty increases. The Inflation Adjustment Act requires a one time “catch-up adjustment” that is based upon the percent change in the Consumer Price Index in October of the year of the last adjustment and October, 2015. Subsequent annual inflation adjustments are also required.

On February 24, 2016, the Office of Management and Budget issued guidance on the implementation of the Inflation Adjustment Act. This guidance set the catch-up adjustment multiplier for OSHA penalties at 1.78156 – which roughly equates to an increase in the maximum penalty per violation as follows:

An OSHA Violation Today Can Cost You Almost 80% More in Penalties After August 1, 2016

The Inflation Adjustment Act allows OSHA to request a reduced catch-up adjustment if it demonstrates the otherwise required increase of the penalty would have a negative economic impact or that social costs would outweigh the benefits. But given published comments from OSHA administrators over the years, which were openly critical of the current statutory maximum amount, the prospect for any such reduction request is remote.

OSHA is required to publish the new penalty levels through an interim final rule in the Federal Register no later than July 1, 2016. The new penalty levels will take effect on August 1, 2016. Because OSHA is subject to a six-month statute of limitations, it is possible that violations occurring on or after March 2, 2016 will be subject to the new maximum penalty amounts if OSHA uses the entire six month period before issuing the citation and assessment of penalties.

The Inflation Adjustment Act does not impact OSHA’s discretion to reduce a proposed penalty in accordance with its current procedures, which take into account the size of the employer, the gravity of the violation, the employer’s history of prior violation, good faith compliance and “quick fix” abatement measures. The Act also does not govern those States which have OSHA approved plans. However, because States have to establish that their plan is as effective as federal OSHA, one would expect that OSHA will develop guidance that requires the States to increase their maximum penalty levels to comport with the new federal penalty amounts.

In the meantime, employers would be well-advised to conduct a self-audit of their workplace safety programs to ensure compliance with applicable state and federal OSHA standards.

© Polsinelli PC, Polsinelli LLP in California
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FAA and OSHA Enter into Agreement to Strengthen Enforcement of AIR21 Whistleblower Protection Law

The FAA and OSHA have entered into a Memorandum of Understanding to facilitate coordination and cooperation concerning enforcement of the AIR21 whistleblower protection law.

The DOL and FAA both play a critical role in enforcing the whistleblower protection provision of AIR21. FAA has responsibility to investigate complaints related to air carrier safety and has authority under the FAA’s statute to enforce air safety regulations and issue sanctions to airmen and air carriers for noncompliance with these regulations. FAA enforcement action may include air carrier and/or airman certificate suspension and/or revocation and/or the imposition of civil penalties. Additionally, FAA may issue civil penalties for violations of 49 U.S.C. § 42121. OSHA has the responsibility to investigate employee complaints of discrimination and may order a violator to take affirmative action to abate the violation, reinstate the complainant to his or her former position with back pay, and award compensatory damages, including attorney fees.

Under the MOU, OSHA will promptly notify FAA of any AIR21 whistleblower retaliation complaints and will provide the FAA with all investigative findings and preliminary orders, investigation reports, and orders associated with any hearing or administrative appeal related to the complaint. And when a whistleblower notifies the FAA of retaliation involving air carrier safety, the FAA will promptly provide OSHA with a copy of the complaint and will advise the whistleblower that an AIR21 complaint must be filed with OSHA within 90 days of the retaliation. And the FAA will provide OSHA with the general results of any investigation conducted, to include whether or not FAA concluded there was a violation of a federal regulation, order, or standard relating to air carrier safety.

ARTICLE BY Jason Zuckerman of Zuckerman Law

Cal/OSHA Proposes Workplace Violence Prevention Standards in Health Care

California’s Division of Occupational Safety and Health (“Cal/OSHA”) has made the Golden State the first in the nation to propose standards specifically aimed at protecting health care workers against workplace violence.

According to the U.S. Bureau of Labor Statistics, the rate of injuries and illnesses from violence in the health care industry is more than three times greater than that for all private industries. Supporters of California’s proposed standards argue that these statistics indicate workplace violence is a serious occupational hazard for health care workers, warranting the need for hospitals and other healthcare facilities to develop and implement a workplace violence prevention plan.

The federal Occupational Safety and Health Administration provides guidance and training materials to combat workplace violence in the healthcare industry, but it has no specific regulations in place. Instead, it relies on the General Duty Clause, Section 5(a)(1) of the Occupational Safety and Health Act of 1970, to cite employers for hazards involving workplace violence.

In California, as a result of petitions to the Occupational Safety and Health Standards Board by two health care worker unions, and subsequent advisory committee meetings held by the Cal/OSHA, the state passed legislation in September 2014, requiring that standards be issued to address Workplace Violence Prevention in Health Care. The Board recently released the proposed standards to the public for comment. A public hearing on the proposal is scheduled for December 17, 2015. The new standards must be adopted by July 1, 2016.

In the proposed standards, workplace violence “is defined as any act of violence or threat of violence that occurs at the work site,” including “the threat or use of physical force against an employee that results in, or has a high likelihood of resulting in injury, psychological trauma,” or an “incident involving the threat or use of a firearm or other dangerous weapon.” In all instances, under the proposed standards, it is immaterial whether the employee sustains an injury. The definition encompasses four types of violent encounters, whether committed by: (1) someone with “no legitimate business;” (2) a person who is the beneficiary of the services provided; (3) a current or past employee; or (4) someone who “has a personal relationship with an employee.”

The proposed regulations apply to hospitals and other health care facilities, such as outpatient medical offices and clinics; home health care and home-based hospice; paramedic and emergency medical services; field operations (e.g., mobile clinics); drug treatment programs; and, ancillary health care operations.

The cornerstones of the proposed regulations address:

  1. Establishing a workplace violence prevention plan that includes active employee involvement;
  2. Identifying and evaluating environmental risk factors, such as employees working in isolated locations, poor illumination or blocked visibility, lack of physical barriers and escape routes, obstacles and impediments to accessing alarm systems and storage of high-value items, currency or pharmaceuticals;
  3. Identifying and evaluating patient-specific workplace violence risk factors by utilizing assessment tools, decision trees, or algorithms;
  4. Correcting hazards related to workplace violence in a timely manner and implementing corrective measures, such as: providing line of sight or other communication in all areas in which patients may be present; configuring spaces so that employees have access to doors and alarms; removing or fastening furnishings and other objects so they cannot be used as weapons; creating a security plan for prevention of the transport of unauthorized firearms and other weapons in the facility; maintaining sufficient staffing; and maintaining an alarm system;
  5. Providing specific training and education to all health care workers who provide direct care to patients at least annually;
  6. Setting up a system to respond to and investigate violent incidents and situations or the risk of violent incidents and situations;
  7. Assessing annually the program and making improvements to help prevent workplace violence; and
  8. Making and retaining records for five years of any violent incident against a hospital employee, regardless of whether an injury was sustained.

The proposed regulations also require that a covered healthcare facility report violent incidents to Cal/OSHA. If the incident results in injury, involves the use of a firearm or other dangerous weapon, or presents an urgent or emergent threat to the welfare, health or safety of hospital personnel, the healthcare facility must report the incident to Cal/OSHA within 24 hours. All other incidents of violence must be reported to Cal/OSHA within 72 hours.

Starting in 2017, Cal/OSHA will post a report on its website containing information regarding the total number of workplace violence reports and which specific healthcare facilities filed reports, the outcome of any related inspection or investigation, the citations levied against a facility based on a violent incident and any recommendations by Cal/OSHA on the prevention of violent incidents.

Jackson Lewis P.C. © 2015

Substantial OSHA Penalty Increases Are Coming

Line GraphOSHA penalties are going up.  EPA’s penalties are going up, too.  However, while EPA penalties have been going up modestly every four years to take inflation into account, OSHA penalties have not increased in 25 years.  Maximum OSHA penalties may jump as much as about 78 percent next year.  For a provision quietly tucked away in budget legislation, this packs quite a punch.

The Legislative Change

On November 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015.[1]  Section 701 of that legislation is the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Adjustment Act).  The 2015 Adjustment Act amends the Federal Civil Penalties Inflation Adjustment Act of 1990[2] to remove the OSHA exemption to the requirement that civil monetary penalties be periodically increased to account for inflation.  The amendment also changed the frequency of the inflation increases from “once every 4 years”[3] to “every year.”

In addition, the new law entitles OSHA to a single “catch up” penalty increase to account for the lack of periodic penalty increases, which “shall take effect no later than August 1, 2016.”  OSHA is authorized to calculate this initial increase based on the percentage difference between the Consumer Price Index (CPI) in October 2015 and the CPI in October of the calendar year that the civil penalty was last adjusted under any different law.[4]  In this instance, because OSHA penalties have not been adjusted since 1990, the catch-up penalty increase will be based on the October 1990 CPI as compared to the October 2015 CPI.

Based on the October 2015 CPI, the percentage difference is expected to be about 78 percent.[5]  In the catch-up adjustment, $7,000 OSHA penalties could increase to as much as approximately $12,471, and $70,000 OSHA penalties could increase to as much as approximately $124,710.  If OSHA rounds those numbers, the likely maximums would be $120,000 and $12,000.

Past Efforts to Raise Maximum OSHA Penalties

Under section 17 of the Occupational Safety and Health Act of 1970 (OSH Act), OSHA penalties for “willful” or “repeat” violations have a maximum civil penalty of $70,000 but not less than $5,000 for each willful violation.[6]  Penalties for “serious” violations have a maximum of $7,000 per violation.  Those figures have remained static since 1990 despite repeated efforts to increase them.

For example, in 2009, a Senate bill and a House bill,[7] both entitled the Protecting America’s Workers Act, would have amended section 17 of the OSH Act with one-time maximum civil penalty increases.  The $70,000 “willful” violation maximum would have been increased to $120,000 but not less than $8,000 (up from $5,000).  The penalties for “serious” violations would have increased from a maximum of $7,000 to a maximum of $12,000, and penalties for “serious” violations that result in employee fatalities would have been increased to a maximum of $50,000 but not less than $20,000 for employers with more than 25 employees.  The proposed legislation did not pass either House of Congress.[8]  This year, updated versions of the Protecting America’s Workers Act were introduced which would make the same adjustments in penalties.[9]

After more than 25 years and extensive legislative effort, OSHA penalties are poised for a significant initial increase, due to a provision added to an appropriations bill without hearings or debate.

Implications for State OSHAs

About half the states have their own enforcement programs under OSHA-approved state plans, even though they generally enforce OSHA’s standards.  Thus, the statutory increase in federal OSHA’s maximum penalties will not directly impact state OSHA programs, whose maximum penalties are set by state law.  However, this federal increase is expected to lead to state increases as well.  Under section 18 of the OSH Act, state plans must be “at least as effective” as those of federal OSHA.[10]  Lower state maximum penalties are not likely to be seen as being “as effective” as federal maximums.

EPA Penalties Are Going Up Too

Under the Federal Civil Penalties Inflation Adjustment Act of 1990, EPA penalties have increased every four years.  Between 1996 and 2013, four adjustments of EPA’s statutory civil payment amounts were implemented.[11]  Annual inflation adjustments will now be required.  In recent years inflation has been low, so the next increase will likely be relatively modest.

[1] Bipartisan Budget Act of 2015, Pub. L. 114-74.

[2] Id at § 701.  Prior to the amendment, Section 4(1) read: “by regulation adjust each civil monetary penalty provided by law within the jurisdiction of the Federal agency, except for any penalty (including any addition to tax and additional amount) under the Internal Revenue Code of 1986, the Tariff Act of 1930, the Occupational Safety and Health Act of 1970, or the Social Security Act, by the inflation adjustment described under section 5 of this Act[.]”  H.R. 3019, 104th Cong. (1996).

[3] H.R. 3019, 104th Cong. (1996) (“The head of each agency shall, not later than 180 days after the date of enactment of the Debt Collection Improvement Act of 1996 [Apr. 26, 1996], and at least once every 4 years thereafter[.]”) (emphasis added).

[4] This initial catch-up adjustment may not exceed 150 percent of the amount of the civil monetary penalties as of the date that the 2015 Adjustment Act was enacted.

[5] The October 1990 CPI is 133.5 and the October 2015 CPI is 237.838.  For more information on CPI figures and calculations, click here.

[6] 29 U.S.C. § 666.

[7] S. 1580, 111th Cong. (2009); H.R. 2067, 111th Cong. (2009).

[8] In addition, civil penalties for OSHA were subsequently included in proposed mine safety legislation, which was similarly unsuccessful. See H.R. 5663; Beveridge & Diamond, P.C., OSHA Legislation Gets Boost from Mine Safety Bill (Aug. 17, 2010). 

[9] S. 1112, 114th Cong. (2014); H.R. 2090, 114th Cong. (2014).

[10]  29 U.S.C. § 666.

[11] As described in the most recent (2013) EPA notice raising maximum penalties,  “EPA’s initial adjustment to each statutory civil penalty amount was published in the Federal Register on December 31, 1996 (61 FR 69360), and became effective on January 30, 1997 (‘the 1996 Rule’). EPA’s second adjustment to civil penalty amounts was published in the Federal Register on February 13, 2004 (69 FR 7121), and became effective on March 15, 2004 (‘the 2004 Rule’). EPA’s third adjustment to civil penalty amounts was published in the Federal Register on December 11, 2008 (73 FR 75340), as corrected in the Federal Register on January 7, 2009 (74 FR 626), and became effective on January 12, 2009 (‘the 2008 Rule’)”; and the fourth adjustment was published in the Federal Register on November 6, 2013.  78 Fed. Reg. 66643 (Nov. 6, 2013)

Addressing and Preventing Workplace Violence

The subject of workplace violence has unfortunately made headlines once again after a news anchor and cameraman were killed by a former co-worker in Virginia last week. Employers are understandably concerned and have questions about what they can do to help prevent workplace violence.

workplace violence businessmen pointing gunsThe Occupational Safety and Health Act (OSHA) requires employers to maintain a place of employment that is “free from recognized hazards that are causing or are likely to cause death or serious physical harm to employees.” While it might seem that workplace violence would be reduced by refusing to hire or retain individuals with a criminal record or propensity for violence, making employment decisions based on these considerations may pose other legal issues. Federal, state and city laws limit the ability to make employment decisions based on criminal history, and the Americans with Disabilities Act and similar state and local laws prohibit discrimination on the basis of a disability, whether actual or perceived. Making an employment decision based on an employee’s propensity for violence stemming from an actual or perceived mental illness can therefore trigger liability for disability discrimination.

So what can employers do to help prevent workplace violence?

  • Institute a workplace violence policy: Employers can develop a policy that clearly states that workplace violence will not be tolerated, and that employees who engage in threatening or violent behavior will be subject to disciplinary action, up to and including termination.

  • Develop a comprehensive violence prevention program: Educate employees on resources and procedures if they feel threatened at work, and train supervisors, human resources personnel and security officers to look for “warning signs” such as changes in behavior and/or job performance that may predict a violent incident.

  • Remind employees about your Employee Assistance Program (EAP) if you have one: EAPs can provide assistance to troubled employees, including access to counselors and medical professionals.

  • Deal with workplace issues before they escalate: Remind managers and supervisors to promptly report all claims of discrimination or harassment to Human Resources and assist in expediting a response to the employee in need of help.

  • Review your policy on criminal background checks: Although criminal background checks may reveal information about an individual’s propensity for violent behavior, their use in employment decisions is limited by federal, state and local laws.

Although, as recent events have shown, violent incidents may be difficult to predict, having the policies and resources to address workplace violence is the first step to preventing them.

2015 Proskauer Rose LLP.

OSHA Enforcement Directive on HazCom Compliance a Mixed Blessing

A new directive from the Occupational Safety and Health Administration on enforcing the agency’s Hazard Communication (HazCom) standard describes requirements that appear to impose new, unforeseen paperwork and compliance burdens on employers even while providing useful clarifications on some issues for employers and enforcement personnel. The “Inspection Procedures for the Hazard Communication Standard (HCS 2012)” was released July 20, 2015, and explains how the standard is to be enforced during the current transition period and after the standard is fully implemented. OSHA’s HazCom rule was amended in 2012 to align U.S. HazCom mandates with a globally harmonized system of classifying and labeling hazardous chemicals.osha-logo

Observers identified at least three areas of concern about the new policy. They involve requirements for documentation of good-faith compliance efforts, written HazCom program instructions, and procedures for classifying chemicals. Critics believe they could lead to added costs, including from citations.

According to the directive, inspectors are to determine if all applicable provisions of paragraphs (e) through (h) of the standard have been covered in the written program and implemented in the workplace. These provisions include the chemical inventory, which must show a product identifier for each chemical known to be present that aligns with the Safety Data Sheet (SDS) and label. The inventory is to include chemicals present in storage or otherwise not in use.

In addition, the written program must designate the person(s) responsible for obtaining or maintaining SDSs, how the data sheets are to be maintained, procedures on how to retrieve SDSs electronically, including backup systems to be used in the event of failure of the electronic equipment, and how employees obtain access to SDSs. Also required are procedures addressing what to do if an SDS is not received at the time of the first shipment, if there is reason to believe the SDS is not appropriate (e.g., missing hazards), to determine if the SDS is current, and, for chemical manufacturers or importers, for updating the SDS when new and significant health information is found. In addition to the written program, there are detailed requirements for labeling, training, evaluating chemicals, and much more.

OSHA appears to be using the policy to push enforcement priorities at the agency. It is a means of requiring staffing firms that provide temporary employees to train those employees to protect themselves from hazardous chemicals they may encounter at the host employer’s worksite. Inspectors also are given detailed guidance on how to evaluate an SDS for a general duty clause violation in cases where there is potential exposure to a chemical with no permissible exposure limit (“PEL”). Frustrated with its inability to update outdated PELs, OSHA has long-hinted it would use the general duty clause in this way.

“They are clearly encompassing their enforcement initiatives into this directive,” said Jackson Lewis attorney Tressi Cordaro. “The approach not only lacks any legal basis in the standard or in OSHA’s governing statute, but also circumvents the regulatory process. That is rulemaking without notice and comment,” she contended.

Cordaro noted that the directive provides useful clarification on some issues, such as employer reliance on Department of Transportation (DOT) labeling for shipping of hazardous chemicals. “There’s some value in this directive. OSHA gave some clarification to DOT labeling,” she said. “That’s guidance that was needed in the industry.”

Enforcement of the standard is in transition. Employers were required to train workers on the new label elements and safety data sheets by December 1, 2013. Chemical manufacturers, importers and distributors had to comply with revised SDS requirements by June 1, 2015. Manufacturers and importers had to comply with new labeling provisions by June 1, 2015. Distributors have until December 1, 2015, to comply with labeling provisions as long as they are not relabeling materials or creating SDSs, in which case they must comply with the June 1 deadline. Full implementation begins on June 1, 2016.

Jackson Lewis P.C. © 2015

OSHA Stresses Fireworks Safety

We can all agree, the fireworks around the July 4th holiday are great. But, did you ever stop and think about the dangers employees of thepyrotechnics industry face in manufacturing, storing and selling these products? OSHA has a web page dedicated to discussing hazards associated with retail sales of fireworks and fireworks displays. For more information on this topic, see OSHA’s recent news release.

Have a safe and happy holiday weekend.

Copyright Holland & Hart LLP 1995-2015.