The Cost of Noncompliance: OSHA, DOT, EPA Penalties Increase for 2023Jan 23, 2023
As required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, federal agencies must publish “catch-up” rules that adjust the level of monetary penalties assessed for various violations — and then make annual adjustments no later than January 15 each year after that. The penalty adjustments recently published by the Occupational Health and Safety Administration (OSHA), the Department of Transportation (DOT), and the Environmental Protection Agency (EPA) are summarized below.
OSHA’s maximum for an “other-than-serious” violation jumps to $15,625
OSHA published its new civil penalty amounts on December 20, 2022. OSHA’s maximum penalties for serious and other-than-serious violations will increase from $14,502 to $15,625 per violation. The maximum penalty for willful or repeated violations will increase from $145,027 per violation to $156,259.
The 2023 cost-of-living adjustment multiplier that OSHA uses is based on the Consumer Price Index for All Urban Consumers for October 2022 (not seasonally adjusted). This number is 1.07745. To compute the 2023 annual adjustment, the Department multiplied the most recent penalty amount for each applicable penalty by the multiplier, 1.07745, and rounded to the nearest dollar.
OSHA state plans must adopt maximum penalties at least as punitive as those established by federal OSHA. Currently, 22 state plans cover private-sector, state, and local government workers. Seven state plans cover only state and local government workers.
DOT increases penalties by 7.745 percent, and plans to monitor airlines more closely
The Federal Motor Carrier Safety Regulations (FMCSR) published the adjusted penalties for DOT on January 6, 2023. The penalty tables reflect a 7.745 percent increase for violations of specific rules of individual agencies, including the Office of the Secretary of Transportation (OST), Federal Aviation Administration (FAA), and Pipeline and Hazardous Materials Safety Administration (PHMSA). The DOT uses the same formula as OSHA to increase all fines.
Also of note, the DOT’s Office of Aviation Consumer Protection (OACP), a unit within the Office of the General Counsel, issued a “Notice Regarding Investigatory and Enforcement Policies” on January 3, 2023, announcing a “robust enforcement program… to protect the rights of the traveling public, particularly given the unprecedented increase in air travel service complaints received by the Department against airlines and ticket agents since the start of the COVID-19 pandemic.”
The Department has received unprecedented air travel service complaints over the past two years. “After a complaint spike of 569 percent in 2020 (102,561 complaints compared to 15,332 complaints received in 2019), complaints have slowed but remain far above pre-pandemic numbers. In 2021, OACP received 49,958 complaints against airlines and ticket agents (a 226 percent increase compared to 2019). During the first six months of 2022, OACP received 28,550 complaints, a 300 percent increase from 7,161 complaints in the first six months of 2019.”
The DOT believes it is necessary to “recalibrate the penalties” imposed on airlines and ticket agents for “violations of consumer protection, civil rights, and economic licensing requirements.”
We’ll have to wait and see what happens.
EPA has broad discretion in how penalties are accessed
The EPA’s environmental statutes typically set out a penalty structure with a “per day” penalty assessment and a maximum statutory penalty. Some statutes allow for civil judicial enforcement that does not carry a maximum statutory penalty.
Under the 2023 rule, the new maximum EPA civil penalties are:
Clean Air Act (Daily) $55,808 – $117,468
Maximum (per violation) $446,456
Clean Water Act (Daily) $25,847 – $64,618
Maximum per violation $323,081
Recovery Act (Daily) $70,752 – $117,468
CERCLA and EPCRA* (Daily) $67,544
Maximum (per violation) $202,635
In the summary of the final rule published in the Federal Register on January 12, 2023, the EPA describes its penalty policies will “take into account several fact-specific considerations, e.g., the seriousness of the violation, the violator’s good faith efforts to comply, any economic benefit gained by the violator as a result of its noncompliance, and a violator’s ability to pay.”
If you have any questions or concerns about the civil penalty policies of the federal government— or have been assessed a penalty for any reason — don’t hesitate to contact Orr & Reno for assistance.
About the Author: James Laboe