The U.S. Department of Labor announced changes to Occupational Safety and Health Administration (OSHA) civil penalty amounts based on cost-of-living adjustments for 2023.
OSHA's maximum penalties for serious and other-than-serious violations will increase from $14,502 per violation to $15,625 per violation. The maximum penalty for willful or repeated violations will increase from $145,027 per violation to $156,259 per violation.
Here are five questions and answers that building owners and facility managers should know about the increases.
1.) How much of an effect will these 2023 OSHA fine increases have?
These fines will have a tremendous impact on institutional and commercial facilities that are inspected and fined by OSHA, especially considering OSHA fines are not covered by any insurance product, and are paid directly from the finances of the company or facility that has been fined. When considering smaller companies, these increased fines can have an even more serious impact on cash flow. These latest increases make it even more important for companies and facilities big and small to carefully review and abide by the latest OSHA policies and ensure they are conducting the latest OSHA or Cal/OSHA required safety and health standards, not just from a financial standpoint, but from a moral standpoint. It’s good business to ensure the safety of all employees, including those in the field.
2.) Will some industries and facilities be impacted by the fine increases more than others? If so, which industries do you think will feel this the most?
OSHA has specific areas of concern based on historical injuries and fatalities. Types of work that have been reviewed and designated by OSHA as having higher than average rates of injuries and fatal accidents are grouped into two categories: National Enforcement Programs (NEPs) and Local Enforcement Programs (LEPs). From an enforcement perspective, any business that falls into either of those categories, or conducts those types of work, has a better chance of receiving a visit from OSHA, and in-turn could be more impacted by the latest fine increases.
3.) Do you think smaller facilities will feel more of a hit than larger ones? Why or why not?
Smaller facilities have less resources to utilize across the board, so it’s fair to assume they’ll feel the pinch of the fine increases more than larger organizations. The reality is that even when a company is trying to do all the right things, it’s still sometimes difficult to have all the correct information and comply with all of OSHA’s required actions. So, smaller companies with less staff often have a harder time meeting compliance demands and keeping up with paperwork and protocols. Not to mention, smaller companies also often lack the resources to fight any OSHA citations that may come their way, unlike larger companies. On the other hand, larger companies have more employees and, in-theory, more risk, but it’s important to note that as companies get larger, and the risk in the field grows, so does a company’s revenue and their ability to hire in-house safety and risk professionals to focus on OSHA-related concerns full-time. Not only can those additional resources help companies stay on top of all the required documents and details in the event of a violation, but having a dedicated safety team also allows a company to be more proactive with training and preventive safety measures, which can limit the chances of OSHA violations all together.
4.) Why have OSHA fines increased so much?
OSHA looks to enforce the laws that exist in the Code of Federal Regulations IE. CFR. These laws exist in the OSHA regulatory text and lay out the required minimum safety standards employers must provide to employees to ensure a safe and healthful work environment. In order to deter companies from failing to comply with these regulations, the citations and monetary amounts were raised with reference to the link above.
5.) Any additional thoughts on the latest OSHA fine increases?
For facilities prioritizing safety and OSHA compliance, having dedicated staff whose goal is to create safety programs, implement the required training, and inspect worksites is very valuable. Another great safety and compliance resource, no matter the industry, is a company’s insurance broker, and their workers’ compensation insurance carrier. Most companies have a guaranteed cost or deductible program in which employee injuries are covered, so a company’s brokers and workers’ comp carriers should have resources to guide an employer in the OSHA landscape.
Drew Youpel is the head of Risk Control for Foresight, a risk management and safety company that provides workers compensation insurance.
