Sources: U.S. Department of Labor; CP staff
Abiding the 2015 Federal Civil Penalties Inflation Adjustment Improvements Act, through which Congress aims to advance violation fines’ effectiveness, the Occupational Safety and Health Administration and sister agencies are directed to adjust penalty scales annually using what Labor Department officials describe as a much more straightforward method than previously available.
Fixed at the same rates since 1990, maximum OSHA penalties for serious and willful or repeated violations will increase by 78 percent, respectively, from $70,000 to $124,709 and $7,000 to $12,471. Wage and Hour Division (WHD) penalties for willful violations of Fair Labor Standards Act minimum wage and overtime provisions will increase from $1,100 to $1,894. Penalty calculations are tied to inflation, though the amount of the increase is capped at 150 percent of the existing amount. The baseline is the last increase other than for inflation. The new amounts are applicable only to civil penalties assessed after August 1 whose associated violations occurred after November 2, 2015.
“Civil penalties should be a credible deterrent that influences behavior far and wide,” contends U.S. Secretary of Labor Thomas Perez. “Adjusting our penalties to keep pace with the cost of living can lead to significant benefits for workers and level the playing field for responsible employers who should not have to compete with those who don’t follow the law.”
The first of two new department rules will cover the vast majority of penalties assessed by OSHA and WHD plus the Mine Safety and Health Administration, Office of Workers’ Compensation Program and Employee Benefits Security Administration. A second rule is to be issued jointly with the Department of Homeland Security to adjust penalties associated with the H-2B temporary guest worker program. Both rules are open to customary public comment periods.