The ABCs of OSHA violations:

Increased penalties, new enforcement policy, when to contest

Increased penalties

Effective January 17, OSHA penalties increased approximately 7.7 percent based on cost-of-living adjustments for 2023. Maximum penalties for serious, other-than-serious violations, and failure to post increased from $14,502 per violation to $15,625 per violation. The maximum penalty for willful or repeated violations increased from $145,027 per violation to $156,259 per violation. Minimum penalties are $0 – other-than-serious and posting requirements; $1,116 – serious; and $11,162 – willful or repeat. Failure to abate penalties increased to $15,625 per day beyond the abatement date.

Effective January 17, these penalties apply to all citations issued by OSHA including inspections opened, but not closed, before that date.

Note: The penalties here are federal OSHA, State Plan penalties may differ.

New enforcement policy

As if the increased penalties weren’t enough, OSHA recently issued a new enforcement policy expanding the types of violations that are egregious and subject to instance-by-instance penalties. The policy significantly allows the agency to propose instance-by-instance (IBI) penalties for each high-gravity serious violation of OSHA standards related to falls, trenching, machine guarding, respiratory protection, permit-required confined spaces, and lockout/tagout. It will also allow IBI penalties for other-than-serious violations related to recordkeeping. This will result in much larger proposed penalties than when all violations of the same hazard are grouped as one.

The new guidance covers enforcement activity in general industry, agriculture, maritime, and construction industries and becomes effective 60 days from Jan. 26, 2023. Currently, IBI citations applies only to egregious willful violations.

Types of penalties

OSHA penalty amounts vary widely and are based on a myriad of factors. Recently a national chain store was fined $265,000 for two violations, but the same two violations could result in fines of around $12,000 at another establishment.

OSHA area directors who sign off on the citation are charged with assessing penalties based on extensive criteria in a Field Operations Manual (“FOM”). The penalty assessment differs based on statutory factors including gravity of hazard, good faith of employer, size of the business, and history of violations. “Gravity” as defined by the FOM is the severity of injury that could result from the alleged violation (high, medium, or low) combined with the probability (greater or lesser) that an injury will occur. Severity + Gravity = Gravity Based Penalty Amount (GBP).

A maximum of 25 percent reduction is permitted for good faith efforts, but not for high gravity serious violations, repeat, or willful violations. A penalty can be reduced by a maximum of 70 percent for small employers based on a sliding scale depending upon the number of employees, if there is no history of previous violations. If an employer was inspected in the previous five years and was in compliance or not issued serious violations, a history reduction of 10 percent could be given. On the other hand, there could be a 10 percent increase if they were issued serious high-gravity citations that have become a final order. No history reduction is allowed for repeat violations.

There are six types of OSHA violations:

1. De Minimus. The least serious class of violation, this is a technical violation of OSHA rules that has no direct impact on health and safety, one where the possibility of an injury occurring is practically nonexistent. A note is made in the company’s safety file and inspectors will verbally inform employees, but typically there aren’t penalties. Practically, employers should try to address de minimis violations, listen to an inspector’s advice, keep documentation, and avoid repeating the violation.
2. Other-than-Serious. This is a violation that has a direct relationship to job safety and health but is unlikely to cause death or serious physical harm. The maximum penalty is the same as a serious violation. However, inspectors can choose not to levy a fine or reduce the penalty by as much as 95% depending on the employer’s good faith (demonstrated efforts to comply with OSHA standards), the history of previous violations, and business size. If the Area Director determines that it is appropriate to achieve the necessary deterrent effect, a maximum penalty of $15,625 may be proposed.The new enforcement policy will also allow instance-by-instance penalties for other-than-serious violations specific to recordkeeping, which are related to injury or illness(es) that occurred because of a serious hazard.
3. Serious. This violation occurs when there is substantial probability that death or serious physical harm could result and the employer knew or should’ve known about the hazard but did not remedy the situation. The gravity of the violation is determined and a GBP assessed. A high-gravity violation is one with a GBP of $15,625; moderate ranges from $8,929 to $13,394; and low is one with a GBP of $6,696. Under the new enforcement policy, high-gravity serious violations of OSHA standards related to falls, trenching, machine guarding, respiratory protection, permit-required confined spaces, and lockout tagout do not have to be grouped, but can be cited on an instance-by-instance basis, significantly increasing costs.
4. Willful Violations. The most serious category, this violation involves intentional violations of OSHA rules or situations that show severe disregard for employee health and safety and has the highest maximum penalty of $156,259. If an employee is killed, a willful violation can turn into a criminal offense with jail time and/or a minimum fine of $250,000 for an individual or $500,000 for a corporation. OSHA doesn’t enforce the criminal aspects of the OSH Act; potential criminal conduct is referred to the Department of Justice (DOJ). Based on 2022 press releases, the DOJ appears increasingly willing to charge employers with OSHA crimes for workplace fatalities and to leverage more counts and criminal charges by combining OSHAct crimes with other offenses.
5. Repeat Violations. An employer can be tagged for a repeat violation if the business was cited earlier “for the same or a substantially similar condition or hazard.” This is particularly troublesome for employers with multiple locations and construction companies with multiple projects because facilities in the same corporate entity are treated as a single workplace. The number of repeat violations rose to 2,065 in 2022 from 1,789 in 2021 and is projected to rise significantly in 2023 as OSHA proactively targets past violators for inspections.Unlike willful violations, they do not have to show intent, but repeat violators can have their initial GBP penalty multiplied up to ten times, so if the first violation is $10,000, the second one could be $100,000, with a maximum of $156,259. Moreover, repeat violations are a common basis for designation in the onerous Severe Violator Enforcement Program (SVEP) and a factor in determining instance-by-instance citations. Routine tasks, such as failing to keep storage area exit routes and aisles clear, are often repeat violations. Therefore, employers should vigorously defend any citations that have a high potential to be repeated.There are a few caveats – OSHA cannot designate a violation as repeat if the employer is contesting the original violation or if the original violation was issued under a State Plan. And the repeat violation must be issued within five years of the original violation.
6. Failure to Abate. The OSHA notice contains a date when the safety violation must be resolved. Companies that don’t meet this date are subject to the maximum penalty per day of $15,625.

Any employer that receives a citation or violation notice from OSHA must post it near the incident area. The post must be visible to all employees until the violation is resolved or for three days, whichever is longer. Violating posting requirements can result in a civil penalty of up to $15,625.

To contest or not to contest

When a monetary penalty seems nominal, employers often decide to accept the citation and “get it over,” rather than evaluate the full impact of such peremptory action. There’s a lot more involved than simply paying the fine and abating the cited safety or health hazard. There are many potential liabilities to weigh:

• An employer’s safety record is often a factor in bidding and the competitive process for new business. It’s easy to do an establishment search on OSHA’s website to obtain information about citations and many third-party tracking services track OSHA citations.
• OSHA’s press releases can damage a company’s reputation.
• The door is open for very costly repeat or willful violations. OSHA can use any accepted citation as a “predicate” for a repeat classification for five years.
• Increased possibility of being placed in the Severe Violator Enforcement Program (SVEP), which is an onerous program with a focus on public shaming, severe penalties, increased inspections, and difficult barriers to exit.
• A willful, repeat, or failure to abate violation within the past five years increases the likelihood of future instance-by-instance citations.
• Workflow can be disrupted if equipment or processes need to be altered.
• Abatement may not be feasible with existing technology or economically.
• May be used as evidence in tort litigation. While workers’ comp generally prohibits personal injury actions by employees against employers, third-party lawsuits are a very common byproduct of workplace accidents. Willful violations have also been used in wrongful death claims.
• Some states give workers an increase in workers’ comp benefits if the injury is tied to an OSHA violation.
• Can adversely affect relationships with unions and employee morale.
• OSHA has ramped up its enforcement staff and new, inexperienced compliance officers are more likely to make mistakes.

All employers have the right to contest a citation, but the deadlines are tight. The OSHA Employer Rights & Responsibilities handbook states, “a written Notice of Intent to Contest must be filed with the OSHA area director within 15 working days after the employer receives the citation.” The notice should specify whether it is directed to the citation or the proposed penalty, or both. If a written notice is not filed within the 15 working-day deadline, the right to contest is forfeited and the citations automatically become final. Even if an informal settlement with OSHA is being negotiated, it’s a good idea to submit a written Notice of Intent to Contest to preserve the right to formally contest the citation.

An independent organization, the Occupational Safety and Health Review Commission (OSHRC) reviews the contests of citations and works much like a court with all the elements of a trial. An employer can present evidence and argue to have the citation dismissed, reduce the penalty, change the abatement, and/or reduce the classification of the offense. An employer needs to be prepared with a strong defense. This process may vary in State Plan jurisdictions.

Regardless of the size of the fine, an OSHA citation has potential long-term implications and the decision to contest should be weighed carefully with your trusted advisors. There was a 31 percent increase in the number of inspections – rising from 24,358 in 2021 to 31,889 in 2022 and pundits expect the number to continue to climb.