OSHA Civil Penalties Increase Under Budget Bill

By Kevin Cannon, CSP, Associated General Contractors of America

As a result of this week’s budget deal, OSHA will now be permitted to increase its penalties – indexed to inflation – annually.

The Bipartisan Budget Bill removes a statutory exemption from penalties under certain statues, including the OSH Act, from inflation for civil penalties. OSHA will now have to report on their adjustment in their annual financial statements and via GAO. The Budget bill also allows the agency to use a “catch up” formula to make up to 150% adjustments in the penalty in the first year to meet current inflation levels. The Secretary could limit the increases if there’s a negative economic impact that outweighs benefits. The increase in penalties would go through the formal notice and comment procedure.

Based on our quick research, this could mean an initial adjustment of approximately 82% which – as an example – would raise the maximum penalty for a willful violation from $70K to a little more than $124K.  I want to also highlight that there is practically no opportunity to reverse this language.