OSHA NEWS RELEASEOSHA NEWS RELEASE

April 22, 2010April 22, 2010

OSHA NEWS RELEASE STATESOSHA NEWS RELEASE STATES

“ “ For many employers, investing in For many employers, investing in safety happens only when they have safety happens only when they have adequate incentives to comply”adequate incentives to comply”

““Higher penalties and more Higher penalties and more aggressive, targeted enforcement aggressive, targeted enforcement will further encourage these will further encourage these employers to provide a safe employers to provide a safe workplace”workplace”

Severe Violator Enforcement Severe Violator Enforcement ProgramProgram

““The new Severe Violator The new Severe Violator Enforcement Program (SVEP) is Enforcement Program (SVEP) is intended to focus OSHA intended to focus OSHA enforcement resources on enforcement resources on recalcitrant employers who recalcitrant employers who endanger workers by endanger workers by demonstrating indifference to their demonstrating indifference to their responsibilities under the law”responsibilities under the law”

RecalcitrantRecalcitrant

adjectiveadjective::  marked by   marked by stubborn resistance to and stubborn resistance to and defiant of authority or defiant of authority or guidanceguidance

SVEPSVEP

- Includes “inspections of other work sites Includes “inspections of other work sites of the same employer where similar of the same employer where similar hazards and deficiencies hazards and deficiencies maymay be be present”present”

- It will include “a more intense It will include “a more intense examination of an employer’s practices examination of an employer’s practices that would trigger additional mandatory that would trigger additional mandatory inspections”inspections”

- ““SVEP will become effective within the SVEP will become effective within the next 45 days”next 45 days”

PENALTIESPENALTIES

Monetary penalties for Monetary penalties for violations have only violations have only increased once in 40 increased once in 40

years.years.

Penalties IncreasingPenalties Increasing

Last year OSHA assembled a work Last year OSHA assembled a work group to evaluate the agencies group to evaluate the agencies penalty policypenalty policy

The general consensus of the group The general consensus of the group was that the penalties are to low to was that the penalties are to low to have an adequate deterrent effecthave an adequate deterrent effect

This is changing in the next few This is changing in the next few monthsmonths

History ReductionHistory Reduction

The time frame for considering an The time frame for considering an employer’s history of violations will employer’s history of violations will expand from three years to five yearsexpand from three years to five years

An employer who has been inspected An employer who has been inspected by OSHA within the previous five years by OSHA within the previous five years and has no serious, willful, repeat, or and has no serious, willful, repeat, or failure to abate violations will receive a failure to abate violations will receive a 10 percent reduction for history10 percent reduction for history

History IncreaseHistory Increase

An employer who has been cited by OSHA An employer who has been cited by OSHA for any high gravity serious, willful, repeat for any high gravity serious, willful, repeat or failure to abate violation within the or failure to abate violation within the previous five years will receive a 10 percent previous five years will receive a 10 percent increase in their penaltyincrease in their penalty

High-gravity serious violations - include fall hazards and hazards identified from the following National Emphasis Programs (NEPs): amputations, combustible dust, crystalline silica, excavation/trenching, and lead

History IncreaseHistory Increase

Employers who have not Employers who have not been inspected or received been inspected or received any citations in the past five any citations in the past five years will not see an increase years will not see an increase or reductionor reduction

Repeat ViolationsRepeat Violations

The time period for repeat The time period for repeat violations will also be violations will also be increased from three to five increased from three to five yearsyears

Penalties Increasing Penalties Increasing

Not just for SVEP but for all Not just for SVEP but for all inspectionsinspections

The current The current maximummaximum penalty for a penalty for a serious violation, one causing death serious violation, one causing death or physical harm, is $7,000or physical harm, is $7,000

The current maximum penalty for a The current maximum penalty for a willful violation is $70,000willful violation is $70,000

Penalties IncreasingPenalties Increasing

The Protecting America’s The Protecting America’s Workers act will increase the Workers act will increase the penalties to $12,000 and penalties to $12,000 and $250,000, respectively$250,000, respectively

Penalty DeductionsPenalty Deductions

Area Directors will be able to offer up Area Directors will be able to offer up to 30 percent reductions at informal to 30 percent reductions at informal conferencesconferences

Area Directors will also be able to Area Directors will also be able to offer an employer with 250 or fewer offer an employer with 250 or fewer employees an additional 20 percent employees an additional 20 percent reduction if that employer agrees to reduction if that employer agrees to retain an outside safety consultantretain an outside safety consultant

Penalty DeductionsPenalty Deductions

OSHA will no longer allow OSHA will no longer allow penalty adjustments to an penalty adjustments to an employer at an informal employer at an informal conference where the conference where the employer has an outstanding employer has an outstanding balance owed to OSHAbalance owed to OSHA

Penalty DeductionsPenalty Deductions

OSHA will be adopting a new penalty OSHA will be adopting a new penalty reduction structure for size as reduction structure for size as illustrated on the next slideillustrated on the next slide

It will allow for penalty reductions of It will allow for penalty reductions of between 10 and 40 percent for between 10 and 40 percent for employers with less than 250 employers with less than 250 employeesemployees

No reductions for employers with 251 No reductions for employers with 251 or more employeesor more employees

SIZE REDUCTIONSSIZE REDUCTIONS

EmployeesEmployees Percent ReductionPercent Reduction

1- 251- 25 4040

26 - 10026 - 100 3030

101 - 250101 - 250 1010

251 or more251 or more NoneNone

Penalty DeductionsPenalty Deductions

The current “Good Faith” reduction is The current “Good Faith” reduction is permitted in recognition of an employer’s permitted in recognition of an employer’s effort to implement an effective safety and effort to implement an effective safety and health management systemhealth management system

Employers must have a safety and health Employers must have a safety and health program in place to get any good faith program in place to get any good faith reduction reduction

Good faith reductions are not allowed in Good faith reductions are not allowed in the cases of high gravity serious, willful, the cases of high gravity serious, willful, repeat, or failure-to-abate violationsrepeat, or failure-to-abate violations

Penalty DeductionsPenalty Deductions

The 15 percent “Quick Fix” The 15 percent “Quick Fix” reduction which is currently reduction which is currently allowed as an abatement allowed as an abatement incentive to encourage incentive to encourage employers to immediately abate employers to immediately abate hazards found during an hazards found during an inspection will be retainedinspection will be retained

Strategic Partnership AgreementStrategic Partnership Agreement

The 10 percent reduction for The 10 percent reduction for employers with a strategic employers with a strategic partnership agreement will be partnership agreement will be eliminatedeliminated

Additional Administrative Additional Administrative ModificationsModifications

Final penalties will be calculated Final penalties will be calculated serially, unlike the present practice in serially, unlike the present practice in which all of the penalty reductions which all of the penalty reductions are added and then the total are added and then the total percentage is multiplied by the percentage is multiplied by the gravity based penalty to arrive at the gravity based penalty to arrive at the proposed penaltyproposed penalty

Old System Old System

Simplified example of old system: A Simplified example of old system: A company with two fines - $500 fine company with two fines - $500 fine and a 15 % reduction and a $1000 and a 15 % reduction and a $1000 fine with a 10% reduction fine with a 10% reduction

Total fines $1500 minus 25% (10% + Total fines $1500 minus 25% (10% + 15%) = $1,125 fine15%) = $1,125 fine

New SystemNew System

A company with two fines - $500 fine A company with two fines - $500 fine and a 15 % reduction and a $1000 and a 15 % reduction and a $1000 fine with a 10% reduction fine with a 10% reduction

$500 fine minus 15% reduction = $500 fine minus 15% reduction = $425 $1000 fine minus 10% $425 $1000 fine minus 10% reduction = $900 finereduction = $900 fine

Total Fined = $1,325Total Fined = $1,325OSHA expects an increase of 50 % in OSHA expects an increase of 50 % in

finesfines

ConclusionConclusion

The average penalty for a serious The average penalty for a serious violation will increase from $1,000 to violation will increase from $1,000 to $3,000 - $4,000$3,000 - $4,000

OSHA hopes that higher penalty OSHA hopes that higher penalty amounts will provide a greater amounts will provide a greater deterrent and further encourage deterrent and further encourage employers to furnish safe and healthy employers to furnish safe and healthy workplaces for their employeesworkplaces for their employees

These changes are to take effect in These changes are to take effect in the next few monthsthe next few months