Contractors and other businesses have a month to brace themselves for a federal rule that will jack OSHA penalty amounts up by 78 percent.
The change has long been expected but was only made official with the U.S. Department of Labor’s announcement of the new rule June 30. The adjustment will take the maximum penalty for serious violations up from $7,000 to $12,741 and take the maximum for willful and repeated violations up from $70,000 to $124,709.
The increased penalties will start to be imposed on Aug. 1. They will apply only to violations that occurred after Nov. 2 last year.
The Occupational Safety and Health Administration defines a serious violation as one that “could cause an accident or illness that would most likely result in death or serious physical harm.” It defines a willful violation as one in which “employer either knowingly failed to comply with a legal requirement … or acted with plain indifference to employee safety.”
The penalties OSHA imposes for these sorts of violations have not been increased since 1990, according to the Department of Labor. The amounts will now be adjusted every year in accordance with inflation, although they won’t be able to go higher than 150 percent of their current maximums.
The increases stem from the Federal Civil Penalties Inflation Adjustment Act, which Congress passed on Nov. 2, 2015. The changes are being adopted both to prevent inflation from making penalty amounts less effective and to give employers an additional incentive to comply with OSHA rules and other federal regulations.
Also June 30, the Department of Labor announced that the penalties charged by its Wage and Hour Division would for minimum-wage and overtime violations will be increased from $1,100 to $1,894.
The Department of Labor released a rule in May extending overtime benefits to salaried workers who earn up to $47,476 a year. The limit had previously been set at $23,660.
Although the new rule is meant to help salaried employees, it will not affect everyone in a white-collar job. It applies only to people in administrative, executive and professional positions, and thus will be felt in only certain parts of the construction industry.
In the construction industry, the new rule is mainly expected to apply to front-office and job-site employees, such as superintendents and project engineers. Trades group warned the change will discourage hiring and could lead to some salaried employees being moved over to wages.