The Bipartisan Budget Act of 2015 was signed into law by President Obama on November 2, 2015. Section 701, “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015” requires OSHA to increase its civil penalties for the first time since 1990. A one-time “Catch Up Adjustment” will occur in 2016 with penalties increasing up to a cap of 150%. Increases will be calculated based on the Consumer Price Index (CPI) between 1990-2015 and indications are that increases will be significant but less than the 150% cap. The next step is that Dr. Michaels, Assistant Secretary of Labor for OSHA, will adjust civil monetary penalties through an interim final rulemaking and the adjustment will come into effect by August 1, 2016 at the latest.

The Act contains an exception which allows an Agency to adjust civil monetary penalties by less than the required amount if certain provisions are met and ultimately approved by the Director of the Office of Management and Budget (OMB). However, this seems an unlikely direction given Dr. Michaels statement last month before the Committee on Education and the Workforce, Subcommittee on Workforce Protections:

Simply put, OSHA penalties must be increased to provide a real disincentive for employers accepting injuries and worker deaths as a cost of doing business.

We will continue updates as they become available.