Study: Reducing OSHA Penalties Didn't Lead Companies to Fix Hazards
DOL's inspector general said OSHA has not effectively evaluated the impact of $351 million in penalty reductions meant to encourage changes.
The Office of Inspector General of the Labor Department, by way of an audit, sought to answer the question: Has OSHA effectively evaluated the impact of penalty reduction incentives on workplace safety and health?
The audit covered 49,192 federal OSHA inspections of non-federal employers initiated between July 2007 and June 2009. The inspections resulted in 142,187 citations and $523.5 million in penalties that were reduced by $351.2 million (67 percent).
The audit found OSHA has not effectively evaluated the impact of the reductions, which are meant as an incentive for employers to improve workplace safety and health. Small employers received the largest reductions (78 percent) but generally had the worst safety and health history — more inspections, more fatalities, and more high-gravity serious (likely to cause death) and repeat violations. OSHA did not always consider an employer's overall safety and health performance when reducing penalties, in part because its information system cannot effectively track violations company-wide. The audit found 4,791 employers with a history of serious violations had received penalty reductions of $86.6 million. Half of these employers received reductions of $42.6 million on subsequent inspections where a similar standard was violated, indicating the employer's hazard corrections may not have been comprehensive and company-wide.
As much as $127 million (36 percent) in penalty reductions may not have been appropriately granted. Specifically, reductions granted in consideration of the employers' size resulted in what amounts to an entitlement as 98 percent of all citations were reduced at the maximum rate. OSHA can limit size reductions for small employers with the more serious violations, but its use of that policy was minimal and up to $91.8 million of reductions may have been granted inappropriately. Another $2.3 million of reductions exceeded limits set forth in the directives. The auditors said OSHA area directors did not document the justification for reductions resulting from informal settlement agreements, for an estimated 49 percent of reductions or $31.8 million.
Finally, the report says OSHA incorrectly granted history reductions of $1.1 million to employers with prior violations. The auditors made 11 recommendations to Dr. David Michaels, assistant secretary for Occupational Safety and Health, to commit the necessary resources to effectively evaluate the impact of penalty reductions, improve information systems, and revise and implement policies and procedures. OSHA provided comments expressing concerns about some audit findings and recommendations. Based on OSHA's response, OIG clarified two recommendations, but the overall conclusions were unchanged.
To view the report and OSHA's response, go to: