By Erik K. Eisenmann

For 25 years, the maximum penalty amounts for violations of the Occupational Safety and Health Act have remained frozen. A thaw is about to set in — and quick.

The budget act President Barack Obama signed on Nov. 2 contained a provision titled the “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.”

This provision does two things.

First, it directs the Occupational Safety and Health Administration to make a “catch-up” adjustment, and bring the agency’s penalties in line with inflation since 1990, which is the last time they were increased. Second, it amends the law to allow OSHA to increase the penalty amounts ever year in accordance with the Consumer Price Index.

The new penalties

Currently, the maximum penalty that OSHA can impose for “other-than-serious” and “serious” violations is $7,000, and the maximum penalty for “willful” or “repeat” violations is $70,000. This new law directs OSHA to increase both of those penalty amounts to correspond with the rate of inflation as it was recorded between 1990 and 2015. The relevant CPI data were released on Nov. 17, and the maximum increase has accordingly been set at 78.16 percent.

This means that OSHA has the authority to increase the maximum penalties to $12,471 for other-than-serious and serious violations and to $124,709 for willful or repeat violations. The change is scheduled to happen no later than Aug. 1, 2016, but we expect OSHA to act sooner than that using an interim final rulemaking.

Advice to employers

Although this change does not alter an employer’s obligations to comply with the Occupational Safety and Health Act, it does substantially raise the stakes for those who fail to comply. Even employers with spotless safety records could now face fines in the six figures for a first OSHA offense.

The changed circumstances make it even more essential for employers to take preventative steps such as providing safety training and conducting self-audits. It is also now more important to ever to seek out experienced counsel when OSHA comes knocking.

The lawyers on Whyte Hirschboeck and Dudek’s Occupational Safety and Health Team are available 24 hours a day, seven days a week, and can work with you through every step of OSHA compliance, investigation and litigation processes.

For more information, contact Erik Eisenmann at 414-978-5731 or eeisenmann@whdlaw.com, David Hertel at 414-978-5303 or dhertel@whdlaw.com, or another member of WHD’s Occupational Safety & Health Team.