On April 5, 2012, the Occupational Safety and Health Administration (OSHA) put out a news release about a proposed $151,300 fine for American Showa, a Blanchester, Ohio manufacturer of power steering pumps and power steering gear boxes for the transportation industry (See our By Industry WC Guide) . The OSHA proposed fines are steep because OSHA alleges that American Showa had two willful violations of safety, plus 11 other safety and health violations.
OSHA has the option of issuing citations with or without penalties after a compliance officer has inspected a facility and reported the findings. The compliance officer does not determine whether a citation or a penalty will be issued, or even if any action will be taken. The determination is made by the area director. [WCx]
What is a Citation?
A citation is a written statement sent by certified mail from OSHA to the employer. It may or may not be combined with a penalty. The citation will state the OSHA regulations and/or standards the employer is alleged to have violated. It will provide the employer with a time period for the necessary correction(s) to be made. The employer is required to post a copy of the citation near the location where the violation occurred. The citation must remain posted for three days or until the violation is corrected, whichever is longer. The only cost to the employer for a citation is the cost necessary to correct the OSHA violation.
When penalties are issued by OSHA, not only is there the cost of correcting the violation, there is also the proposed penalty (fine) that will be paid.There are seven categories of penalties the employer can be subject to.
- Other Than Serious Violation
- Serious Violation
- Willful Violation
- Repeated Violation
- Failure to Abate Prior Violation
- De Minimis Violations
- Other Violations
Other than Serious Violation
This is defined as a violation that has a direct impact on job safety and health, but will probably not cause serious physical harm or death. The penalty can be any amount up to $7,000. The penalty amount can be adjusted downward by as much as 95% based on the employer’s good faith effort to correct the violation, the employer’s previous history of violations, and the size of the business. The penalty will be waived if the adjusted amount is less than $100.
Serious Violation
A violation where there is a substantial probability of serious injury or death and the employer knew, or should have known, of the hazard. The penalty can be any amount up to $7,000. The penalty amount can be adjusted downward by as much as 95% based on the employer’s good faith effort to correct the violation, the employer’s previous history of violations, the seriousness of the violation and the size of the business.
Willful Violation
The employer knows what is being done is in violation of OSHA standards and regulations, or is aware that a hazardous condition exists, but makes no effort to eliminate the hazard. The area director can propose a penalty of up to $70,000 for each willful violation. The penalty can be adjusted downward depending on the size of the business and its history of previous violations. No adjustment is given for a good faith effort to correct the violation (as in OSHA’s opinion, the employer should have already made an effort to correct the violation).
If the willful violation has resulted in the death of an employee, the violation can be punished by a court imposed penalty of up to $250,000 for an individual and up to $500,000 for a corporation, imprisonment for up to six months, or both.
Repeated Violation
When upon re-inspection, a substantially similar violation of any standard, rule, regulation or order is found, a fine of up to $70,000 can be imposed on the employer. For a violation to be classified as a repeated violation, it cannot be of a citation that is being contested.
Failure to Abate Prior Violation
This violation comes with a penalty of up to $7,000, per day, for each day the previously cited violation remains unabated.
De Minimis Violation
A violation of OSHA standards which has no direct or immediate impact on the safety and health of the employees is referred to as a de minimis violation. They are documented by the compliance officer, but are not included in the citation.
Other Violations
Other violations, for which citations and penalties can be issued, upon conviction, include:
Violations of posting requirements can carry penalty of up to $7,000.
Falsifying records and reports have a fine of up to $10,000, or six months imprisonment, or both.
Assaulting a compliance officer, or interfering with, resisting, opposing or intimidating a compliance officer is a criminal offense with a fine of not more than $3,000 and imprisonment for not more than 3 years. [WCx]
To learn more about OSHA citations or penalties or general information about OSHA and keeping your employees safe, visit the OSHA website at: www.osha.gov and also our article on Must an Employer Maintain a Safe Workplace. If we can be of assistance on improving your safety program, reducing your cost of workers compensation and decreasing the possibility of an OSHA citation and penalties, please contact us.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com
MODIFIED DUTY CALCULATOR: www.LowerWC.com/transitional-duty-cost-calculator.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
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