OSHA OKLAHOMA CITY AREA OFFICE 55 North Robinson, Suite 315 Oklahoma City, OK (405)

OSHA’s PENALTY ENHANCEMENT POLICY Effective for Inspections opened on and after October 1, 2010

HISTORY Reduction consideration is expanded from 3 years to 5 years Reduction consideration is expanded from 3 years to 5 years –10% Reduction off the GBP NEW – History Increase NEW – History Increase –Employers cited for HG serious, willful, repeat or FTA in past 5 years –10% Increase in penalty (up to statutory max)

INFORMAL CONFERENCES AT AREA OFFICES Area Director retains authority to determine application of size and history reductions Area Director retains authority to determine application of size and history reductions 30% max penalty reduction at informal conferences 30% max penalty reduction at informal conferences No reductions granted for employers with outstanding penalty balances (penalty payment plans ok) No reductions granted for employers with outstanding penalty balances (penalty payment plans ok) Additional reduction only if employer agrees to retain an outside safety and health consultant Additional reduction only if employer agrees to retain an outside safety and health consultant

EXPEDITED INFORMAL SETTLEMENT AGREEMENTS Are reduced from 40% to 30% Are reduced from 40% to 30% Additional reduction if outside safety consultant is hired Additional reduction if outside safety consultant is hired

GRAVITY-BASED PENALTY STRUCTURE SeverityProbabilityGBPGravity HighGreater$7,000High MediumGreater$6,000Moderate LowGreater$5,000Moderate HighLesser$5,000Moderate MediumLesser$4,000Moderate LowLesser$3,000Low

Size Reduction Employees Percent Reduction or more None

GOOD FAITH ADJUSTMENTS Remains Same Remains Same 15% or 25% 15% or 25% Based on effective safety and health system in place Based on effective safety and health system in place No reduction if: No reduction if: –HG Serious Violations –Willful Violations –Repeat Violations –Failure to Abate Violations –Major deficiencies in S&H System

MINIMUM PENALTY Increased to $500 Increased to $500 If proposed/calculated penalty is less than $500, a $500 penalty is assessed If proposed/calculated penalty is less than $500, a $500 penalty is assessed

MODIFICATION TO PENALTY CALCULATION Calculation of penalties will be done serially Calculation of penalties will be done serially In past, all penalty reduction adjustment percentages were totaled and applied to each violation penalty In past, all penalty reduction adjustment percentages were totaled and applied to each violation penalty New policy is to apply serially in this order: History, Good Faith, Size New policy is to apply serially in this order: History, Good Faith, Size

EXAMPLE OF PENALTY CALCULATION SAMPLE DATA SUMMED (old method) SERIALLY (new method) High/Lesser$5,000$5,000 History (10%) $4,500 Good Faith(15%) $3,825 Size (30%) 10%+15%+30%= 55% $2,677 Result$2,250$2,677

Fines and Insurance Rates Underwriters can access the fines that companies receive online. Underwriters can access the fines that companies receive online. This can lead to increased insurance rates particularly on workers comp policies. This can lead to increased insurance rates particularly on workers comp policies.