OSHA Increases Penalties for Bad Players

Since 2007, Nevada OSHA has been under the gun for what was perceived as a soft-line approach to penalties. Well, take heart, this problem is not specific to Nevada. During a recent review of the 27 states that operate their own OSHA programs, Hawaii received the worst rating of all. And many states, even those under federal jurisdiction, had issues as well. Well, as they say in the movies, there’s a new sheriff in town and he’s packing some heavy firepower. As a result, OSHA is taking a more hard-line stance.

First, OSHA is proposing to revise its On-Site Consultation Program. In the case of a SHARP (safety and health achievement recognition program) facility, which is normally exempt from inspections, they now could be included in industry-wide inspections if the incident involves something generating widespread concern, such as combustible dust hazards.

To fully understand how this will unfold, let me explain the two sides of OSHA. You have SCATS — this is OSHA’s Safety Consultation and Training Section — the white hats, if you will. These folks inspect a facility and issue Notices of Violation (fix-it tickets). As long as you correct or address the issue and provide proof that you did, the notice closes without financial punishment. There’s also OSHA’s Enforcement Section. This is for companies that don’t play by the rules. These visits usually involve financial penalties and, in some rare instances, prosecution. For a long time, if a company worked with SCATS, the Enforce-ment Section would not get involved. This was a way of working with employers to rectify hazards in the workplace.

Another proposed change is to switch consultation visits to enforcement inspections if the agency receives allegations of violations or unsafe working conditions from health departments, the media or other sources. If the issue is so serious that local or state health departments report it to OSHA or the media carries it, there are no more Get-Out-of-Jail-Free cards. Expect a visit from Enforcement.

Recently the Occupational Health and Safety E-News, reported the Obama Administration boosted the OSHA 2011 budget by $14 million with more than half designated for enforcement activities. U.S. Assistant Secretary of Labor David Michaels said, “By the end of the current fiscal year, OSHA will have issued more egregious and significant cases than it has at any time in the last decade.”

In addition, OSHA is increasing its fine structure. This action has already been implemented and the fines are pretty stiff.

The three-year review of past safety practices has been replaced with a five-year review, before a 10 percent penalty reduction is considered. Gravity-based penalties: High-severity violations increased from $5,000 to $7,000; medium-severity increased from $3,500 to $6,000; and even the lowest penalty doubled from $1,500 to $3,000. And in some severe cases, OSHA can issue penalties upwards of $70,000 for a serious-willful violation or $75,000 per exposed employee under an egregious penalty.

Penalty reductions based on number of employees has changed as well: One-25 employees will drop from 60 percent to 40 percent reduction; 26-100 employees 40 percent to 20 percent; 100-250 employees 20 percent to 10 percent; and if your company employs 251 or more there will be no penalty reduction in this category.

Here are two examples of OSHA’s increased stringency. Recently BP received a record $87 million fine for a 2005 explosion resulting in 15 fatalities. This then triggered an EPA inspection that resulted in a $15 million fine for clean-air act violations. Secondly, a Miami-based gun-range builder was slapped with a $2 million fine for knowingly exposing workers to excessive amounts of lead. This last one is possibly a smaller employer, and a $2 million fine is as good as closing its doors.

In today’s economic times, smaller penalties and possibly bad press coverage can cripple a company to the point it simply cannot recover. Remember, good news travels fast but bad news travels faster. While the amounts listed for BP are staggering, it just goes to prove that agencies tasked with safety and health are swinging a very heavy hammer these days.

According to industry experts, the best way to lessen the likelihood of injuries, illnesses and violations is to increase your safety efforts. This can be accomplished by conducting audits of your safety programs and injury logs, increasing safety training and implementing safety committees. By taking a proactive approach, every company can play an integral role in making our workplaces safer.

But a company’s efforts should not stop there. A truly proactive company will go beyond the norm. Some businesses host annual safety days where they bring in vendors and guest speakers to increase employee awareness of everyday workplace hazards. Some companies circulate monthly safety newsletters while others take the next step and remind employees to work and play safe at home.

With the upcoming holiday season, working safe around the house can have a direct impact on a company’s safety record as well. Unfortunately, there are cases where a person injures himself at home, only to come into work Monday morning and claim the event happened at work. Think about it: With rising health care costs, increased deductibles and co-pays, this is the nature of the economic beast. So providing home safety tips is also in a company’s best interest. And even if an employee gets hurt at home and doesn’t try to claim workers’ compensation, your company is still missing an employee and, with everyone operating as lean as possible, the loss of one worker can negatively affect a company.

With an increase in fines, possible penalties and lost productivity, the need to maintain a healthy and safe work force is crucial for the sake of the employees and the longevity of a company. Remember, your employees are your most precious asset – without them there is no company.

Reprinted courtesy of Northern Nevada Business Weekly
Written by: Scott Alquist