Small Employers Eligible for Bigger Penalty Break Under New OSHA Guidance

By Bruce Rolfsen  

Small employers who face fines for violating safety and health standards may be eligible for a greater penalty reduction under a new provision that will take effect April 1, Richard Fairfax, a deputy assistant labor secretary at the Occupational Safety and Health Administration, announced March 27.

The provision makes employers with 25 or fewer workers eligible for a penalty reduction of up to 60 percent if they take acceptable steps to mitigate the violations, Fairfax told a meeting of the Textile Rental Services Association of America.

The previous penalty reduction limit of 40 percent was set in October 2010 when OSHA announced several changes to how penalties are calculated and the reductions OSHA area directors and other officials are allowed to approve for employers who do not contest the penalties and agree to correct cited violations (40 OSHR 843, 10/14/10).

By increasing the maximum reduction to 60 percent, OSHA is returning to the limit in place prior to the October 2010 change.

The change was brought about by a continuing review of penalty policies. “We've been evaluating it all along,” Fairfax told BNA after the speech.

Fairfax is OSHA's highest-ranking career employee, starting with the agency in 1978. As deputy assistant secretary, a post he has held since 2010, Fairfax oversees OSHA's regional offices and the directorates of enforcement and construction.

SVEP Also Under Review

OSHA also continues to review its Severe Violator Enforcement Program, Fairfax said.

The program, launched in June 2010, imposes tough enforcement and sanctions on employers accused of multiple willful and repeat violations, according to the program's guidance. Employers designated as severe violators are subject to follow-up and corporate-wide inspections, in addition to financial penalties. As of Jan. 1, more than 260 establishments had been placed in the program, OSHA records show.

“We're not going to get rid of it because it generates more compliance that other things we do, in my mind,” Fairfax told the audience.

However, Fairfax does want to define how employers can exit the program.

“Right now, there is no way for an employer to get off of the program, so we are trying to figure out a way, the steps, an employer must do so they can get off the program,” he said. “I don't think they should be there permanently. … I think we're fairly close on that avenue.”

Fairfax said work on developing the injury and illness prevention program standard continues (See related article)(41 OSHR 1092, 12/22/11).

The next step out of OSHA is likely to be an “enforcement paper” explaining how the standard would be applied and violations determined, Fairfax said.

Many people mistakenly believe OSHA will use the standard to double-penalize employers, once for violating the I2P2 standard and once for the core violation. That is not OSHA's intent, he said.

The enforcement white paper should be available before the proposed standard's Small Business Regulatory Enforcement Fairness Act (SBREFA) hearings are held later this year (42 OSHR 169, 2/23/12).

Fairfax acknowledged the election year could influence the standard's progress.

“All that being said, as you know this is an election year, and who knows what will happen or how far will we be able to get on this, but we are working on it,” he said.