State OSHA Fines Remain Lower Despite Years of Federal Pressure

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By Bruce Rolfsen

Several years of pressure from federal OSHA to get states to increase their worker safety fines have met with little success. And the disparity between federal and state penalties isn’t likely to change soon.

Of the 22 states enforcing their own workplace safety rules for private employers, only four have average fines that satisfy the federal goal, according to a Bloomberg BNA analysis of recently released data from the Occupational Safety and Health Administration.

In fiscal 2016, the average federal OSHA fine for a serious violation was $2,279. The unweighted state average for the same year was $1,670, about $600 below the federal average.

That means an employer under federal OSHA jurisdiction in Ohio, typically would face a proposed serious violation penalty of $2,279 while a builder in neighboring Michigan would be fined $774, or in Indiana penalized $1,074.

Kevin Beauregard, vice chairman of the Occupational Safety and Health State Plan Association, told Bloomberg BNA Aug. 8 that states continue to believe their effectiveness is best measured by the impact on worker safety and health, not by the size of fines.

The states meeting federal OSHA’s goal of an average fine within at least 25 percent of the federal level were California ($7,294), Kentucky ($3,300), Wyoming ($2,665), and Washington ($2,154).

The state with the lowest average fine was Maryland at $657.

‘Low-Road’ Employers Benefit

Starting in 2010, President Barack Obama’s appointed OSHA administrator, David Michaels pressed states to boost fines. In OSHA’s opinion, having equivalent fines was part of the mandate that state plans be “at least as effective as” federal efforts.

Michaels, now a professor at George Washington University’s Milken Institute School of Public Health, told Bloomberg BNA Aug. 9 he continues to believe many state penalties are too low to be effective deterrents.

“The penalties currently issued by many state plans are so tiny that they are clearly ineffective,” Michaels said. “The result is more workers are hurt, and responsible employers who invest in safety are at a financial disadvantage competing with low-road employers who know that if a state OSHA inspects, the fine will be painless.”

Gap May Grow

The disparity between federal and state fines may grow wider.

In August 2016, federal OSHA raised its maximum fine levels by 78 percent, raising the cap on serious fines from $7,000 to $12,471. An inflation adjustment in January boosted the maximum to $12,675.Federal OSHA officials have continually said states are expected to raise their maximums to match the federal limits in order for state efforts to meet the requirement that they be at least as effective as the federal program.

However, many states have been slow to match the 2016 increase.

Beauregard, deputy commissioner for North Carolina’s Division of Occupational Safety and Health, said some states are waiting to see if the Trump administration intends to continue the Obama administration policy of expecting states to raise their maximum fines before asking their states’ lawmakers to increase penalties.

OSHA, which is without a President Donald Trump-appointed administrator, declined Bloomberg BNA’s requests for comment. However, in the agency’s analyses of each state program that were completed in June, the reports repeatedly say, “State Plans are required to adopt both the catch-up increase and annual increase.”

In states moving forward to raise rates, it’s taking months and years, legislative records show.

California, the largest state plan; Iowa; and Oregon are among states whose legislatures and governors approved new penalty structures. The Iowa change takes effect Nov. 1, and Oregon’s state plan is aiming for a Jan. 1, 2018 implementation date. A date hasn’t been set for when California’s change will be enacted.

A bill in Alaska raising maximum fines to match the federal levels passed the state House of Representatives in April. Final approval of the bill must wait until 2018 when the state Senate reconvenes.

To contact the reporter on this story: Bruce Rolfsen in Washington at brolfsen@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com

For More Information

Information on state plans is available at https://www.osha.gov/dcsp/osp/index.html.

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