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Right now, the worst fine the federal workplace safety watchdog can levy is a mere $136,653.
In the business community, there is no loss of love for OSHA, the federal safety agency, and contractors are no exception.
More than a few contractors have likely been breathing a sigh of relief after plans to dramatically boost the fines the agency can dole out for safety violations has landed in legislative limbo.
Tucked into the Biden administration’s ill-fated Build Back Never – née, Better – plan, the big hike to OSHA fines is going nowhere fast as Democrats in Congress look for ways to salvage a few pieces after the implosion of the $2 trillion legislative package.
The proposal, which cleared the House’s Committee on Education and Labor last fall before getting rolled into the massive Build Back plan, pushed the maximum penalty for “serious” violations to $70,000, up from just over $14,000 now, while fines for offenses deemed willful or repeat jumped to a formidable $700,000, up from $136,653.
The Associated Builders & Contractors pushed back hard, arguing the new fines were big enough to put construction companies out of business.
“These harmful penalties would devastate businesses of any size,” Kristen Swearingen, ABC’s vice president of legislative and political affairs, told Engineering News-Record in a statement.
Most Firms Do the Right Thing
Trade groups are prone to hyperbole and eager to prove to members they are fighting for their interests, so it’s hard to gage the accuracy of that statement.
However, for a small to mid-sized contractor that commits serious or even egregious safety violations that result in serious injuries or even the death of one or more of their workers, a fine like that could at least signal that OSHA means business.
In some cases, yes, it might truly put contractor that has behaved recklessly out of business.
But for the construction industry as a whole, and for the vast majority of companies that play by the rules and do their level best with safety, is that truly such a bad thing?
Anybody who has worked in construction for any period of time or followed it knows the industry has its share of bad apples.
They may not be large in number, but they are prolific, racking up one safety violation after another, everything from roofing contractors failing to provide workers with protection against falls to others who fail to provide workers with basic training on how to not get killed on busy job sites.
In fact, there are enough of these reckless contractors out there that OSHA years ago formed a “severe violators program” to deal with them – in and of itself another symptom of the larger problem.
Boston Tragedy Proves Need
Without the power to levy truly punitive and potentially devastating fines, OSHA is reduced to managing the industry’s miscreants through a special program, rather than giving them the choice to shape up or ship out.
The result: Unscrupulous contractors can go on corner cutting and paying relatively modest fines for years until tragedy strikes, and one or more workers are killed, triggering headlines and demands for action.
To see an example, you need look no further than the two construction workers killed in downtown Boston last February.
A Ford F750 dump truck working on the same job – utility work on State Street – backed into the two men, knocking them into a nine-foot trench in the street.
Scott Van Voorhis
Turns out the contractor in question had a record full of OSHA safety violations stretching back two decades – and which he and an employee of the firm allegedly failed to disclose in forms filed with city officials.
A top federal Labor Department official lambasted the owner of the company, contending that for two decades the contractor had “knowingly disregarded his responsibility to assure the safety and health of his workers.”
In fact, faced with this kind of incorrigible behavior, some think even $700,000 is too low, especially when it comes to fatal accidents. Federal agencies, when calculating the monetary value of a worker’s lost life for other purposes, have settled on a figure of $10 million to $11 million.
For OSHA fines to be a real game changer, you would need to go far higher than even the proposed $700,000 fine that has generated such controversy, contends Vanderbilt University Law School Professor W. Kip Viscusi, who has done extensive research on OSHA penalties.
“Add another digit to that and make it $7 million,” Viscusi said. “By having it on the books it sends a signal there is a potential for severe penalties for bad behavior.”
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
