By Casey M. Cosentino and Eric J. Conn
According to statistics recently reported by OSHA, the number of workplace inspections conducted by federal OSHA in FY 2011 fell to a total of 40,215, down 778 from 2010. The agency attributes this slight decline in the number of inspections to the fact that many inspections, particularly those focused on health hazards and recordkeeping compliance, require more time per inspection. Gone are the days when the Compliance Officer drops by for a cup of coffee. Now, OSHA wants to know which office in which they should set up because they are going to be there awhile.
Notwithstanding the fewer number of inspections, the size of enforcement actions continues to rise. The average OSHA penalty per Serious violation in 2011 increased to $2,132, more than doubling from 2010’s average of $1,053. In the last year of the Bush administration, 2008, that average was $998.
As a result of these increases in penalties per violation, OSHA also increased by more than 30 percent the number of “Significant Cases,” which are enforcement actions with fines of $100,000 or more. Specifically, OSHA issued 215 Significant Cases in 2011, up from 164 in 2010.
OSHA’s increase in the size of penalties and the number of Significant Cases can be traced back to key changes that OSHA made to its Field Operations Manual in October 2010. For instance, OSHA doubled the minimum penalty for Serious violations, limited the Area Offices’ freedom to reduce penalties during settlement conferences, and reduced allowable penalty reductions for clean OSHA history (and required more years without past violations to be eligible for a clean history penalty reduction).
In a recent speech at OSHA’s Advisory Committee on Construction Safety and Health, David Michaels, Assistant Secretary of Labor for OSHA, acknowledged:
“[w]e know penalties have an impact. We have to maximize the impact of our penalties because we’re trying to not just focus on the employer where we found the [violation], but the whole industry . . . . It’s still quite low.”
Unfortunately, many of these changes in penalty structure have a disproportionate impact on small businesses. For example, small businesses used to benefit from a meaningful penalty reduction based on the size of their workforce. By cutting this penalty reduction, OSHA penalties on the whole increased at the expense of small businesses.
Notably, OSHA’s budget for FY 2012 has increased by more than $10 million dollars, so employers can expect OSHA’s aggressive, anti-employer enforcement campaign to continue through this new year. Accordingly, employers must remain on high alert, and try to stay out in front of OSHA by conducting their own attorney-client privileged OSHA compliance audits.