OSHA Penalties – How Does a Company Get a Six or Seven Figure Penalty?

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When I see a news release with a headline that proclaims an OSHA penalty of over $500,000, my first thought is to wonder how many times that company has been inspected by OSHA.  A penalty of that magnitude is rarely an outcome of a first time inspection.  Most likely the company has been tagged with repeat penalties or possibly even a willful penalty.  In other words, this isn’t their first “rodeo” with OSHA.

A proactive business leader knows that it makes sense to be prepared for all kinds of circumstances.  Whether it is financial, the actions of a competitor, changes in consumer habits, a business succeeds when leadership takes ongoing steps to anticipate circumstances.  OSHA compliance should not be a mystery.  Companies need to know if they are ready to effectively handle an OSHA inspection and that they need not fear the outcome.  Understandably, companies that have not experienced an OSHA inspection or don’t know anyone who has, may not be prepared when OSHA arrives.

But how is it that a business that has already had an inspection, received citations and penalties and was required to certify correction of the citation, is not prepared for another inspection?  How is it that they receive citations and penalties for the same violations they claim to have corrected?  How is it that this cycle repeats itself a number of times?  Some business leaders don’t seem to get it or feel they can just pay the penalties and life goes on.

OSHA recently announced an increase in its penalty amounts.  The maximum amount for a serious citation penalty is $13,260.  Serious violations are by far the most common type of citation written by OSHA.  Willful and repeat penalties max out at $132, 600.  OSHA will reduce these amounts based on a number of factors like company size and past history with the company.  OSHA is much less likely to reduce a penalty when it involves a repeat or willful citation.  How many companies can absorb high penalties as a “cost of doing business”?

What exactly is a repeat penalty?  As noted in the agencies Field Operations Manual, OSHA cites a repeat penalty when An employer may be cited for a repeated violation if that employer has been cited previously for the same or a substantially similar condition or hazard and the citation has become a final order of the Occupational Safety and Health Review Commission (hereafter,OS&H Review Commission). A citation may become a final order by operation of law when an employer does not contest the citation, or pursuant to court decision or settlement. The underlying citation which the repeated violation will be based on must have become a final order before the occurrence or observation of the second substantially similar violation.  It can be particularly challenging for a company with multiple locations or, in the case of a contractor, multiple job sites to avoid citation that meet this definition.

Willful citations are issued by OSHA where an employer has demonstrated either an intentional disregard for the requirements of the Act or a plain indifference to employee safety and health.   It is easy to see how repeat citations can also be classified as willful penalties given that the employer was made aware of the hazard previously.

Examples of hazards where willful penalties occur are: unprotected excavations, falls in construction, bin entry in grain handling facilities and chemical plants that have not implemented a process safety management program. These are examples of well known hazards that OSHA feels all employers should identify and control in their work spaces.

What can an employer do to create a safer workplace and to avoid willful or repeat citations and penalties?  Here are a few thoughts.

  1.  Be proactive now and evaluate your workplace(s) to identify hazards and determine compliance.
  2. Check the OSHA website to determine the most common citations for your industry.  Here is a link to the OSHA webpage where you can look this information up by your NAICS or SIC code.
  3. If you have already been cited by OSHA, periodically evaluate if your workplace(s) are effectively controlling this hazard.

 

 

 

 

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