WASHINGTON, D.C.—The US Department of Labor has issued an Interim Final Rule to implement the Federal Civil Penalties Inflation Adjustment Improvements Act passed as part of the highly publicized Bipartisan Budget Act of 2015. The budget deal of this provision requires immediate penalty increases to catch up with inflation.
Although the Rule applies to all federal regulatory agencies, its impact will be felt most by employers receiving citations from OSHA. This is because many federal agencies quasi-regularly increase their penalties based on inflation. OSHA, on the other hand, has been statutorily prohibited from raising penalties for the last 25 years under a budget bill passed in the 1990s. As a result, OSHA’s penalty catch-up hike will be the most significant of all federal agencies, raising penalties by 78 percent, and increasing employers’ burdens by an estimated $111 million in the first year.