As a training provider Crane Tech typically does not talk about fines. We focus on educating individuals on the right way to perform a task—teaching the skills and expertise they need to work SAFELY according to applicable standards. If they are working reliably day in and day out, there isn’t a need to discuss fines, because there shouldn’t be violations.
However, we know fines are a reality at an employer/management level and in our Who Signals the Crane? post, last December we mentioned that “it won’t be long before OSHA will be increasing maximum fines for violations up to 80%.” At that point, there wasn’t much information available to share about the increase, but now it’s time to update that.
Crane Tech’s Summary
The Inflation Adjustment Act passed in November 2015 allowed for ALL Department of Labor agencies (Employee Benefits Security Administration [ESBA], Mine Safety and Health Administration [MSHA], Occupational Safety and Health Administration [OSHA], Office of Workers’ Compensation Programs [OWCP], and Wage and Hour Division [WHD]) to adjust their civil penalties to account for inflation.
While that may seem reasonable in theory, the big shock is that maximum penalties for OSHA violations will increase by 78% this year! The extremely high increase is a result of maximum penalties having remained the same since 1990 and the Act allows OSHA to impose an initial catch-up adjustment – so they have 25 years of inflation to account for. After this initial increase, fines will be adjusted annually for inflation.
Currently, OSHA’s interim final rule is in the final days to solicit comments (due by 8/15/16) while the new penalty levels started last week. As of August 2, 2016 all citations issued by OSHA will be subject to the new higher penalties if the related violation occurred after November 2, 2015.
And to clarify, while our example/article is focused on OSHA and a signaling-related incident, this increase not just limited to cranes or material handling operations. It all applies to ALL types of violations from OSHA – from General Requirements to Fall Protection and anywhere in between. If you are not governed by OSHA, but by MSHA or example, you will still be impacted by an increase in fines, just by a different amount.
So what does that mean for your operations?
Real Life Application
The good news is, if you are already doing things correctly, these increases shouldn’t have a big impact on operations and profitability. However if you are cutting corners to save time or money; the risk will probably not outweigh the savings. Let’s look at the example we shared in Who Signals the Crane? An individual was rigging a load in close working conditions, with only himself
and the operator in the area at the time. The person rigging put his index finger up in the air without the rotation motion to indicate hoist. The crane operator mistakenly followed what he thought was a signal to hoist, pinning the ground man between the load and a stationary object – leading to an injury. Turns out the rigger was just trying to tell the operator to hold on a minute.
In this case, the rigger was NOT a qualified signal person, and an OSHA fine for this serious violation prior to November 2, 2015 would have been $7,000. If this were to happen today, the cost would be $12,471—and that would only be if it was considered a serious violation. If it was deemed a willful violation because the employer knowingly did not have a qualified signal person on site to signal the crane, that violation could rise from $70,000 to $124,709.
Our Take on This
It goes back to our motto of Safety though Education. At Crane Tech we want individuals to work safely and reliably for employers who comply with the law. It seems our most successful customers are those who value the safety of their employees and understand that cost savings come from increased efficiency that a well trained and reliable workforce brings.
Should you need training on material handling topics, safety training for your management team (with more detail on OSHA or MSHA regulations), inspections, or technical assistance as it relates to a standard, remember Crane Tech is only a phone call or email away. Our experienced team is passionate about sharing knowledge to help make your operations safe and reliable.
Helpful Links
OSHA Enforcement: OSHA Penalty Adjustments to Take Effect August 2016 (includes links on the right hand side to other resources).
OSHA Fact Sheet: OSHA Penalty Adjustments to Take Effect August 2016
U.S. Department of Labor Fact Sheet: Inflation Adjustment Act Interim Final Rules
A comprehensive chart of each agency’s individual penalty adjustments is available here.