There is no funny punch line should OSHA come knocking at your door. Quite the contrary, the seeds have been sown for this to become a serious and very costly issue that business owners will need to urgently address.
Effective August 2, 2016, OSHA has increased all of their fines by almost 80%. Fines haven’t changed in 25 years and the massive increase was approved to keep pace with inflation. In the future, OSHA will increase their fines each year based on the Consumer Price Index. Here are the original and new maximum OSHA penalties:
Serious/Other-Than-Serious Posting Requirements
Old Maximum Penalty: $7,000
New Maximum Penalty: $12,471
Failure to Abate
Old Maximum Penalty: $7,000 per day beyond the abatement date
New Maximum Penalty: $12,471 per day beyond the abatement date
Willful or Repeated
Old Maximum Penalty: $70,000 per violation
New Maximum Penalty: $124,709 per violation
If the new maximum penalties don’t catch your attention, here’s more: Effective January 1, 2017, certain employers will be required to electronically submit injury and illness data to OSHA. OSHA claims this will enable them to use their enforcement and compliance assistance resources more efficiently. They will scrub the data received of personal identifiable information and they will post this injury information for the public to see. They claim that making the loss information public will nudge employers to focus on safety. It also furthers existing anti-retaliation protection for employees by requiring employers to inform employees of their right to report work-related injuries and illness from retaliation.
Electronic reporting is required of every business with over 250 employees. It will also affect a lot of businesses with as few as 20 employees. There is a list on the OSHA website of the NAICS industry groups that will be impacted by this rule change.
Why Is This a Bad Thing?
For one, business owners will have another administrative regulatory burden they will need to address with internal resources that have most likely been stretched to the limit already. Second, your claim record is like a report card. If you have straight A’s, you may not have a problem showing it off to others. How many of us have hidden bad report cards from our parents? You get the picture! A bad report card can be used against you by your competition in a bid situation or a customer may decide you are a risk to their business operations and employees, regardless of any extenuating circumstances that may be involved.
Prior to the rule change, OSHA only entered the picture when someone reported a serious injury or potential unsafe work condition. Now, OSHA will receive claim information directly from the business owner and may be able to will determine potential violations and issue fines through the use of analytics. This is like shooting a flare into the sky and saying, “Hey! Look over here!”
What’s the Solution?
There is no coincidence that fines were increased dramatically for the first time in 25 years and the electronic reporting of claims is being implemented next year. Any business that has experienced an OSHA inspection knows that they will find something wrong and the business will be fined.
This may sound awfully naive, but the answer is to minimize or eliminate those claims that will put your business on the OSHA radar. This is what we do. Let us help you.
All insurance policies are different. Be sure to review your insurance policy for specific information about coverages available to you. Nothing in this post is meant to suggest a guarantee of coverage.