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May 2, 2016

CT employers face higher OSHA workplace-safety fines

PHOTO | Pablo Robles Warren Simpson is head of OSHA's Hartford office, where he directs a team of workplace-safety inspectors. OSHA violation fines are expected to rise by thousands of dollars this year.
PHOTO | Pablo Robles Average initial fines issued by Warren Simpson, head of OSHA's Hartford office, in the past year have been in the $6,000 range.

For a variety of Connecticut employers, a knock on the door from the Occupational Safety & Health Administration (OSHA) can be a scary moment, as a visit from a federal workplace safety inspector often uncovers violations.

But in most cases, employers don't lose sleep over the threat of financial penalties for offenses. While serious OSHA violations can fetch penalties that reach into the six figures, fines tend to be relatively modest, if they are levied at all.

But this year, that math will change. OSHA penalties are slated to increase by as much as 80 percent in August. The fines have been frozen since 1990, but Congress authorized the increase late last year, allowing OSHA to apply 26 years of inflation to its penalty caps.

Fines for most OSHA violations have been capped at $7,000, while penalties for more serious (and rarer) violations — classified as repeat or willful violations — have been capped at $70,000. An 80 percent hike would bring those caps to $12,600 and $127,000, respectively.

Common OSHA violations include failures to protect workers from hazardous materials, falls and other accidents.

Rude Awakening

“I think … there may be a bit of a rude awakening when the fines increase,” said Jane Warren, a law partner at McCarter English in Hartford, where she leads the firm's OSHA practice. “I think companies are going to be caught a little off guard.”

Warren said companies don't always pay attention to the threat of OSHA penalties as much as they should because it's considered a cost of doing business to some when fines are so low.

Warren said she hasn't seen any significant scrambling by Connecticut companies in advance of the penalty increases. Some firms probably aren't aware of it, but she thinks companies should update their compliance manuals and step up safety training, among other measures.

“It's easy to find violations anywhere,” she said. “It's not hard.”

Higher fines also likely means more companies will contest them, creating more work for attorneys like Warren.

The U.S. Department of Labor, which houses OSHA, is required to publish an interim final rule outlining the new penalties by July 1, said Ted Fitzgerald, a DOL spokesman for the New England region.

Fine Awareness

Chris Syrek, president of the Connecticut chapter of the Associated Builders and Contractors Inc. (CT ABC), which represents primarily non-union contractors, said his 200 members are cognizant of the fine increase.

“OSHA fines haven't increased in over a quarter century, perhaps this will encourage companies to establish safety programs or improve upon existing ones,” Syrek said. “There is nothing more important than making sure every employee has the opportunity to leave the jobsite every day and return to their families, and CT ABC will continue to put safety at the forefront of what we do as an association.”

CT ABC is one of several industry associations in the state that has a formal training agreement with OSHA. The voluntary relationship facilitates training and education about workplace safety.

CT OSHA activity

The number of OSHA inspections in Connecticut has slightly declined over the past five years, according to data on its website.

In 2015, the agency opened 652 cases in which violations were found, down from 775 in 2014, 815 in 2013, 821 in 2012 and 848 in 2011.

OSHA has two Connecticut offices, Hartford and Bridgeport, which each cover a portion of the state.

The average initial penalty issued by OSHA's Hartford office over the past year has been in the $6,000 range, according to an analysis of OSHA data by the Hartford Business Journal.

Those fines were ultimately reduced to an average of approximately $3,500, due to companies agreeing to conduct training and other remedies.

Larger OSHA Fines Contested

The calculations don't include cases that remain open. Cases with larger penalties often stay open longer, as companies contest and/or seek to lower fines as much as possible.

For example, OSHA proposed a $165,000 fine nearly a year ago on clothing retailer Forever 21, after an inspection of its Farmington store found a blocked emergency exit and other violations that the company had been fined for at other stores. As of last week, the case technically remains open, as the retailer has agreed to a penalty payment plan, with the final penalty reduced to $100,000.

OSHA typically issues press releases for its larger fines. So far this year, OSHA publicly announced proposed fines totaling nearly $280,000 on six Connecticut employers. The largest is a $70,200 penalty against Lake Compounce amusement park. The second-largest, and most recent, was a $65,000 fine for clothing retailer Guess? related to an inspection of its store located inside Foxwoods.

From 2011 to 2015, OSHA opened more than 3,900 Connecticut cases in which violations were discovered, according to federal data. That's more than two new cases per day.

State OSHA fines unaffected

The increase in federal OSHA fines against private employers isn't expected to impact fines levied by Connecticut's state OSHA office, which has jurisdiction over state and local governments and their related entities.

More than half of states have a state OSHA plan, which is approved by the federal agency. Connecticut is one of six states where the state OSHA office has jurisdiction only over the public sector. State-level OSHA fines in Connecticut are capped at $1,000 per violation — much lower than the current federal fines.

Conn-OSHA Director Kenneth Tucker said he doubts that will change.

“We're very successful on getting corrective action and right now I don't think we need [an increase in the fines],” Tucker said.

However, Tucker admits he has had mixed feelings about the relatively low fines his office can levy, particularly in rare instances when workers have died and an investigation determines that violations contributed to the deaths.

He said he vividly remembers meeting with the widow of a public-safety employee who had died on the job.

“'My husband's life is only worth $2,500,'” he recalled her saying to him. “That's a hard one for me.”

Conn-OSHA jurisdiction

Though its jurisdiction is in government, Conn-OSHA provides safety training and consults for many private companies, typically with 250 or fewer workers.

Some companies call after receiving a fine, while others are more proactive.

The companies that seek out Conn-OSHA to walk through their facility to spot potential violations agree to fix whatever's found, Tucker said. If they don't follow through, Conn-OSHA reports them to the federal office.

Despite federal OSHA's pending fine increase, Tucker said Conn-OSHA hasn't seen an increase in inspection requests from Connecticut companies, but that could change.

“I wouldn't be surprised to see it happen,” Tucker said.

Read more

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OSHA seeks to fine Lake Compounce $70K

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OSHA fines Berlin manufacturer $47K

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