Tue July 5, 2016

On July 1, the interim final rules for Civil Monetary Penalty Inflation Adjustment were published for EPA and OSHA.

The action is mandated by the Federal Civil Penalties Inflation Adjustment Act and its amendments, which required agencies to review their statutory civil penalties every four years, and specifies the formula for adjusting statutory such penalties to “reflect inflation, maintain the deterrent effect of statutory civil penalties, and promote compliance with the law.” Note that a 2015 amendment requires agencies, beginning January 15, 2017, to make subsequent adjustments for inflation on an annual basis. 

EPA’s table is here. Civil penalties for violations of the Toxic Substances Control Act, Clean Water Act, Clean Air Act and other statutes will increase by over 50% in many cases, to more than double in others.

OSHA’s table is here (see page 33). For willful or repeated violations, the minimum civil penalty will rise from $5000 to $8,908, and the maximum will rise from $70,000 to $124,709. Maximum civil penalties for serious, other-than-serious, posting requirement and failure to abate violations will rise from $7,000 to $12,471. 

For these “catch-up adjustment” rules, the new statutory maximum or minimum penalty levels will apply to all statutory civil penalties assessed on or after August 1, 2016, for violations that occurred after November 2, 2015. Current levels will apply to (1) violations that occurred on or before November 2, 2015, and (2) violations that occurred after November 2, 2015, where the penalty assessment was made prior to August 1, 2016.

Neither EPA nor OSHA is required to seek the maximum allowable penalty for a given case. As EPA states, agency policies guide enforcement personnel to consider factors such as the seriousness of the violation, a violator’s good faith efforts to comply, any economic benefit gained by a violator as a result of noncompliance and a violator’s ability to pay.

For more information, please contact Marie Gargas.

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