News

Be Prepared: Civil Penalties to Rise Starting August 1

By: Brooke Frankel Dickerson

Submitted by Firm:
Arnall Golden Gregory LLP
Firm Contacts:
Edward Cadagin, Henry M. Perlowski, Teri A. Simmons
Article Type:
Legal Update
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Effective August 1, OSHA, EPA and the Department of the Interior, among other federal agencies, are all raising the ranges of civil penalties assessed under their respective programs. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended in 2015, requires federal agencies to adjust penalty amounts for inflation. The 2015 amendment requires agencies to implement a one time “catch-up” to account for inflation dating back to when the penalty was enacted, although any increase is capped at 150% of the value as of November 2, 2015. Penalties will continue to rise as the law requires agencies to revisit penalty ranges annually. This growth is in contrast to the relative stable penalty amounts that have been reflected in various regulatory penalty policies.

OSHA penalties, for violations of employee health and safety requirements, have not changed since 1990. As a result of the 2015 amendment, however, they will significantly increase by 78%.

Penalties under many environmental statutes such as the Superfund law (CERCLA) and the Clean Water Act are also set to rise considerably. In fact, EPA increased more than 65 types of environmental penalties. Together with OSHA and EPA, various agencies in the Department of the Interior, including the Fish and Wildlife Service, raised their penalty amounts for all violations occurring after November 2, 2015 for which a penalty has not been assessed by August 1, 2016. The Pipeline and Hazardous Materials Safety Administration, though, elected to apply its adjusted civil penalties only to violations occurring after August 1, 2016.

Many statutes mandate the imposition of designated civil penalties, and the details of the adjustments vary by agency. Although there is still an opportunity to comment on many of the penalty increases, a company’s best bet to avoid high fines is to be prepared for surprise inspections by (1) training employees how to respond, (2) having all required paperwork in order and available, and of course, (3) understanding the legal requirements and complying with those that apply to the facility.

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