OSHA requirements are set by statute, standards and regulations. Our interpretation letters explain these requirements and how they apply to particular circumstances, but they cannot create additional employer obligations. This letter constitutes OSHA's interpretation of the requirements discussed. Note that our enforcement guidance may be affected by changes to OSHA rules. Also, from time to time we update our guidance in response to new information. To keep apprised of such developments, you can consult OSHA's website at http://www.osha.gov.

January 3, 2018

 

MEMORANDUM FOR:

REGIONAL ADMINISTRATORS

FROM:

THOMAS GALASSI, Director
Directorate of Enforcement Programs

SUBJECT:

Implementation of the 2018 Annual Adjustment Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015

On November 2, 2015, Congress enacted the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Public Law 114-74, sec. 701 (Inflation Adjustment Act), which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 as previously amended by the 1996 Debt Collection Improvement Act (collectively, the “Prior Inflation Adjustment Act”), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The Inflation Adjustment Act required agencies to: (1) Adjust the level of civil monetary penalties with an initial “catch-up” adjustment through an interim final rule (IFR); and (2) make subsequent annual adjustments for inflation, no later than January 15 of each year.

The cost-of-living adjustment multiplier for 2018, based on the Consumer Price Index (CPI-U) for the month of October 2017, not seasonally adjusted, is 1.02041. To compute the 2018 annual adjustment, the Department multiplied the most recent penalty amount for each applicable penalty by the multiplier, 1.02041, and rounded to the nearest dollar.

The adjustment factor of 1.02041 will remain consistent across the minimum and maximum penalties set forth in the OSH Act and Field Operations Manual (FOM). For example, OSHA’s current maximum penalty for a Serious violation is $12, 675.00; following the application of the adjustment factor ($12,675.00 x 1.02041), the new maximum penalty for a Serious violation will be $12,934.00. An updated chart with a complete listing of penalties will be posted on the public web page shortly.

Effective immediately, this memorandum revises the guidance in the FOM, specifically Chapter 6, Penalties and Debt Collection to address these penalty changes. OSHA will continue to follow its existing procedures for applying adjustment factors, such as size, history, and good faith. Additionally, the OSHA Information System (OIS) will be updated by Monday, January 8, 2018 to reflect the penalty increase due to the inflation adjustment factor. For citations that must be issued prior to Monday, the Area Office should contact the OIS Help Desk and request a manual adjustment.

If you have any questions regarding the above, please contact the Directorate of Enforcement Programs at (202) 693-1850.