Washington, April 22, 2010 – A memorandum issued to Regional OSHA Administrators by David Michaels, Assistant Secretary for the Occupational Health and Safety Administration (OSHA) offers details on pending changes to penalty calculations resulting from safety OSHA inspections.
According to Michaels, the changes will serve to “generally increase the overall dollar amount of all penalties.” The result will be an increase in penalties assigned to serious violations from $1,000 to an average of $3,000 to $4,000.
The changes are anticipated to take effect within the next several months in order to allow OSHA personnel to receive adequate training about the changes. The following areas will be impacted by these changes:
History Reduction – A 10% penalty reduction will apply to companies with a clean record for the five year period preceding the audit. This is being increased from three years.
History Increase – A 10% increase in the penalty will apply to companies with “high gravity serious, willful, repeat, or failure-to-abate” violations within the five year period preceding the audit. Companies with no OSHA inspections or violations not deemed “high gravity” will not see an increase in their penalty.
Repeat Violations – The time frame used to classify “repeat” violations is being increased from three years to five years. Area Directors will still have authority to decrease penalties associated with repeat violations if they deem it appropriate.
Area Director and Informal Conference Considerations – Area Directors still maintain the authority to raise or lower penalties. Area Directors may also offer up to a 30% reduction in penalties at an informal conference. Reductions greater than 30% must be approved by the Regional Administrator. It’s important to note that small employers (under 250 employees) may receive an additional 20% fee reduction if the employer agrees to retain an outside safety and health consultant.
Deadbeat Employers -- The new rules will also discontinue the practice of penalty reductions being offered to companies with outstanding penalty balances owed to OSHA (unless the employer is on a penalty payment plan and making timely payments).
Expedited Informal Settlement Agreements – Area offices can still utilize expedited informal settlements, but are now limited to a 30% penalty reduction. An additional 20% reduction can be issued by the Area Director for employers who retain an outside safety and health consultant.
Other highlights of the memorandum (click here for pdf) include:
Violations related to the Severe Violator Enforcement Program (SVEP) (click here) no longer need to be grouped or combined and can each be given a specific penalty. The SVEP targets employers who have exhibited indifference in addressing known safety issues.
A gravity based penalty matrix will be adopted that will increase the penalty based on the violation’s severity and probability characteristics. This will range from $3,000 for low severity, lesser probability violations. An additional $7,000 can be assigned to violations exhibiting a high severity, greater probability.
Penalty reductions ranging from 10% to 40% can be applied to small employers (less than 250 people).
The 15% “Quick-fix” reduction remains in place for employers who are able to immediately abate hazards identified in inspections. However, the 10% reduction for employers with a strategic partnership with OSHA is being eliminated.