Federal OSHA penalty increases take effect in August 2016

Joan Fletcher Iowa Employment & Labor Law Dickinson Law Des Moines Iowa

Posted on 07/08/2016 at 10:20 AM by Joan Fletcher

In response to a November 2015 mandate from Congress that federal agencies adjust their civil penalties to account for inflation and maintain their deterrent effect, the U.S. Department of Labor announced an interim final rule to adjust penalties assessed by a number of its divisions -- including the Occupational Safety and Health Administration (“OSHA”). 

Since 1990, OSHA had been specifically exempted from a law that required federal agencies to raise their fines to keep pace with inflation.  That exemption was eliminated in the Bipartisan Budget Act signed by President Obama on November 2, 2015.    Under the interim final rule, published in the Federal Register on July 1, 2016  OSHA penalties will increase by 78%.  The top penalty for serious violations will increase from $7,000 to $12,471, and the maximum penalty for willful or repeated violations will increase from $70,000 to $124,709. Any citations issued by OSHA after August 1, 2016 will be subject to the new penalties, if the related violations occurred after November 2, 2015.  In the future, OSHA will continue to adjust its penalties for inflation each year, based on the Consumer Price Index.  While this interim final rule is effective August 1, 2016, the Department of Labor will accept public comments through August 15, 2016.  

Iowa is one of 21 states with its own occupational safety and health plan. Under the federal law, federal OSHA must approve and monitor such “state plans.”  A requirement for approval is that any state’s plan must set standards that are at least as effective as the equivalent federal standard.

Iowa’s law governing workplace safety and health is found in Iowa Code Chapter 88.  Iowa Code Section 88.14  lists the maximum penalty amounts, which are consistent with those of federal OSHA prior to the new penalty increases.  In order to maintain its OSHA-approved state plan, it would appear that the Iowa statue will need to be amended both to provide penalty increases that are at least as high as the federal OSHA penalty increases, and perhaps delegate to a state agency the power to amend the penalties annually to reflect “inflation.”  Because Iowa’s 2016 legislative session has adjourned, absent the legislature being summoned to a special session, amendments to the law cannot happen until 2017.

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