OSHA Administrative Penalty Information Bulletin
Effective October 1, 2010 for Federal OSHA
OSHA has implemented several changes to its administrative penalty calculation system. The changes replace penalty adjustment factors which have been in place since the early 1970's, resulting in penalties which were often too low to have an adequate deterrent effect. Administrative penalty adjustments were made to the following factors:
- History Reduction
- History Increase
- Repeated Violations
- Severe Violator Enforcement Program
- Gravity-Based Penalty
- Size Reduction
- Good Faith
- Minimum Penalties
- Additional Administrative Modifications to the Penalty Calculation Policy
A brief description of each penalty adjustment factor and change is provided below:
- History Reduction
The time frame for considering an employer's history of violations has expanded from three years to five. An employer who has been inspected by OSHA within the previous five years and has not been issued any serious, willful, repeat, or failure-to-abate citations will receive a 10% reduction for history. - History Increase
An employer that has been cited by OSHA for any high gravity serious, willful, repeat, or failure-to-abate violation within the previous five years will receive a 10% increase in their penalty, up to the statutory maximum. Employers who have not been inspected and those who have received citations for serious violations that were not high gravity will receive neither a reduction nor an increase for history. - Repeated Violations
The time frame for considering the classification of repeated violations has expanded from three years to five. - Severe Violator Enforcement Program (SVEP)
Where circumstances warrant, at the discretion of the Area Director, high gravity serious violations related to standards and hazards identified in the SVEP will not normally be grouped or combined, and may be cited as separate violations, with individual proposed penalties. - Gravity-Based Penalty (GBP)
The gravity of a violation is the primary consideration in calculating penalties and is established by assessing the severity of the injury/illness which could result from a hazard and the probability that an injury or illness could occur. OSHA has implemented a gravity-based penalty structure for serious citations which ranges from $3,000 to $7,000, as described below.
Severity Probability GBP Gravity High Greater $7,000 High Medium Greater $6,000 Moderate Low Greater $5,000 Moderate High Lesser $5,000 Moderate Medium Lesser $4,000 Moderate Low Lesser $3,000 Low
- Size Reduction1
OSHA has amended its penalty reduction structure based on the size of an employer, allowing for a penalty reduction between 10 and 60% for those with less than 250 employees. No size reduction will be applied for employers with 251 or more employees.
Employees Percent
Reduction1-251 60 26-100 30 101-250 10 251 or more none
- Good Faith
The good faith procedures in the Field Operations Manual are retained. A penalty reduction is permitted in recognition of an employer's effort to implement an effective workplace safety and health program. Employers must have a safety and health program in place to get any good faith reduction. Good faith reductions are not permitted when high gravity serious, willful, repeat, or failure-to-abate violations are proposed.
The 15% Quick-Fix reduction, which is permitted as an abatement incentive program to encourage employers to immediately abate hazards identified during inspections, remains unchanged. The 10% reduction for employers with a strategic partnership agreement has been eliminated. - Minimum Penalties
The minimum proposed penalty for a serious violation has been increased to $500. When the proposed penalty for a serious violation would amount to less than $500, a $500 penalty will be proposed for that violation. The proposed minimum penalty for a posting violation has increased to $250 if the company was previously provided a poster by OSHA. - Additional Administrative Modifications to the Penalty Calculation Policy
All penalty adjustment factors are now applied serially.
Example Moderate Gravity Penalty Comparison: Summed versus Serial Calculation
Sample Data | Summed | Serially2 |
High/Lesser | $5,000 | $5,000 |
History (10%) | $4,500 - 10% | |
Good Faith (15%) | $3,825 - 15% | |
Quick Fix (15%) | $3,251 - 15% | |
Size (30%) | 10% + 15% + 15% + 30% = 70% | $2,275 - 30% |
Result | $1,500 | $2,275 |
These changes establish general OSHA policy and do not preclude the agency from assessing a different penalty where appropriate under the Act given the circumstances in a particular case.
1 Effective April 1, 2012, Federal OSHA modified the employer size reduction factor for employers with 1-25 employees from a 40% size reduction to a 60% reduction factor. [Return to Text]
2 No proposed penalty shall exceed the statutory limit for a serious violation or $7,000. [Return to Text]