How OSHA computes penalties

Three employers are inspected by OSHA and are all written up for the same citation. The first receives a $200 fine. The second is fined $1200. The third establishment is assessed a $4000 fine. While it may look like each of these inspections was handled in a different manner, be assured this is not the case. Instead, they are the product of a system that gives nuance to some businesses and, by design, punishes others.

The adjustment process is determined by four factors:

The gravity of the violation,

The size of the business,

The good faith of the employer, and

The employer's history of previous violations.

The gravity assessment is the primary consideration in determining the penalty amount. It is the basis used to calculate penalties for serious and other violations. In determining the gravity of a citation, the following two assessments are made:

• The severity of the injury or illness which could result from the alleged violation. It can be judged as 'serious' or 'other than serious'.

• High severity - it could cause death or disability.
• Medium severity - hospitalized reversible injury.
• Low severity - non-hospitalized reversible injury.
• Minimal severity - potential harm considered not serious.

2. The probability that an injury or illness could occur as a result of the alleged violation. Probability does not impact the classification of a violation but does affect the amount of the proposed penalty.

• Greater probability - high chance of accident or injury.
• Lesser probability - low chance of accident or injury.

Violations will factor these circumstances to determine the probability of an accident or injury.

• Number of workers exposed,
• Frequency and duration of exposure.
• Employee proximity to the hazard.
• Were the employees using appropriate PPE.
• Was there a medical surveillance program.
• Did it involve youthful or under-aged workers.
• Other pertinent working conditions.

All of these factors figure into the final probability assessment. If strict adherence results in an unreasonably high or low gravity, the probability may be adjusted as appropriate. When that is done, the decision must be fully documented.

The Gravity Based Penalty (GBP) is an unadjusted penalty and is calculated on the basis of severity and probability, as follows.

For serious violations

So here we have one explanation for the differences in our opening example. While all three firms had the same violation, more employees may have been exposed at one place. It also may have been judged to have a higher probability of occurring.

In some cases, OSHA will group violations together and give them a single GBP. When that is done, it shall be based on the instance with the highest gravity.

The next phase is the Penalty Adjustment Factors. Here, the GBP may be reduced by up to 95 percent depending on the employer's good faith, size of business, and history of previous violations. There are some limitations that may apply.

Penalties assessed for violations that are classified as high severity and greater probability shall be adjusted only for size and history. They cannot receive a good faith adjustment.

Penalties assessed for violations that are repeated shall be adjusted only for size. They lose both good faith and the history adjustment.

Finally, penalties for regulatory violations, which are classified as willful, shall be adjusted only for size. Penalties assessed for serious violations, which are classified as willful, shall be adjusted for size and history. If one violation is classified as willful, no adjustment for good faith can be applied to any of the other penalties.

The size adjustment is based on the following scale.

The inspector's professional adjustment is permitted in recognition of an employer's good faith. This normally requires that the employer have some type of written program and some type of employee safety training program in place. If the program is in place but deemed shoddy, the inspector may reduce the good faith credit adjustment to 15 percent. Only the 25 or 15 percent figures shall be used. The inspector cannot set an intermediate number.

The history reduction of ten percent is allowed if the employer has not been cited with an OSHA violation within the past three years.

The total adjustments are the sum of the reductions for each of the factors. It can reach as high as 95 percent.

There are other factors that may come into play. If the employer makes an immediate fix or correction when initially told of a violation, the inspector may make a downward adjustment that could possibly change the category of a citation from serious to other than serious. If an employer reports that a violation has been corrected, and later is found to be in non-compliance for the same violation, there is a very punitive formula in place to punish that employer.

How does OSHA compute the number of employees if the employer is a national conglomerate? The employees at the individual workplace count. In other cases, the employees within a cluster management group are counted if those employees sometimes work at the targeted workplace. In either case, employees that work in other areas under different management do not count in the total.

I hope this sheds some light on why OSHA fines, for seemingly similar violations, sometimes vary a great deal. For more information, check out Chapter IV of the Field Inspectors Resource Manual (FIRM). http://www.osha.gov/Firm_osha_data/100008.html

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Gary Finch is a licensed funeral director and embalmer in Texas. He founded KISS Compliance Network, Inc. in 1991. The company does business as Compliance Plus. They write funeral home safety programs and develop Plug and Play PowerPoint Training CD's for funeral homes across the country. All of their representatives are dual licensed and have 30 years experience in the funeral industry.
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