Twenty-five years ago, Congress passed a law that mandated federal agencies increase penalties based on the Cost of Living Index. They exempted OSHA from the list. Last year, in a bi-partisan vote, Congress removed that exemption. In August, OSHA used a Cost of Living Index based on a 25-year Cost of Living Index. The following table shows the old and new maximum penalties.

New OSHA Citation Ceilings

  The above table shows what we know. What is left for us to guess at is how this will play out in routine inspections. The actual increase for the 25 years was approximately 82 percent. Is that excessive? You decide. Go back and check your casket prices from 1991 and compare them to current prices.

  Maximum penalties are rare. Serious citations routinely result in fines of $1500. In some cases, there are multiple serious citations. In one case I handled, there were thirteen serious citations issued and each of them resulted in a proposed penalty of $1500. On some occasions, serious penalties call for $2200 penalties. My guess is that these penalties will also increase by about 80 percent. If my projections are right, then those $1500 proposed penalties will become $2700 proposed penalties under the new ceilings. Only time will tell us exactly how OSHA calculates new penalties.

  In the future, OSHA will make Cost of Living Index adjustments annually. State plan OSHA states are required to adjust their state penalties so that they at least match those imposed under the federal standards. OSHA advised businesses: To best protect against potential exposure to the new penalties, employers should conduct internal audits to determine their compliance with OSHA standards.