Oregon to Assess Highest-in-Nation OSHA Penalties of up to $250,000 Per Violation

For many years, Oregon has been among the states that issued the lowest workplace safety penalties per violation. Not anymore. Effective May 24, 2023, Oregon passed a new law (SB 592A) turning its workplace safety penalties on their head, taking Oregon from the state with some of the lowest OSHA penalties to the highest in the country. The new law revamps Oregon OSHA workplace inspections, investigations, and fines. Notably, the new law significantly increases the amounts of civil penalties for violations of the Oregon Safe Employment Act, even surpassing federal OSHA penalties, and expands scenarios where Oregon OSHA will conduct a comprehensive “wall-to-wall” inspection of a worksite.

The new law provides the following:

• Investigations. The Director of the Department of Consumer and Business Services (“DCBS”) is granted unrestricted latitude to make a decision “[t]o conduct a comprehensive inspection of any place of employment as deemed necessary by the department based upon the prior violation history of the place of employment,” regarding any state OSHA violation.
• Investigations involving repeat or willful violations and fatalities. Requires OR OSHA to conduct a “comprehensive [follow up] investigation of the place of employment” within one year of the original closing conference whenever an accident investigation reveals that the violation caused or contributed to a work-related fatality at the place of employment or three or more willful or repeated violations have occurred within a one-year period.
• Penalties. Significantly increases civil penalty amounts that may be assessed against employers that violate OSHA requirements.
• Reporting. Requires Director of DCBS to submit an annual report to the Oregon Legislative Assembly summarizing information related to penalties assessed, appeals filed with DCBS, and department inspections of places of employment.

OR OSHA’s new minimum and maximum penalties.

The increased penalty amounts are notable.[1] The maximum penalties for Willful or Repeat violations resulting in an employee death are almost $100,000 more than the federal OSHA maximum, which is the most significant change in Oregon’s penalty amounts.

 

Type of Violation	Prior Oregon Penalty Structure	New Oregon Penalty Structure Effective May 24, 2023	Federal Penalties for 2023[2]
“Serious” Violation[3]	$300 minimum, $13,500 maximum per violation	$1,116 minimum, $15,625 maximum, for each violation	$15,625 maximum, per violation
“Serious” Violation Caused or Contributed to Employee Fatality	$3,750 minimum, $13,500 maximum per violation	$20,000 minimum, $50,000 maximum, for each violation	$15,625 maximum, per violation
Other Than Serious Violation	$0 minimum, $390 maximum per violation	$15,625 maximum, for each violation	$15,625 maximum, for each violation
“Willful” or “Repeated” Violations	$200 minimum for repeat violation, $9,753 minimum for willful violation, Maximum for both $135,653 per violation	$11,162 minimum, $156,259 maximum, for each violation	$156,259 maximum,  per violation
Willful or Repeated Violation Caused or Contributed to Employee Fatality	N/A	$50,000 minimum, $250,000 maximum,  for each violation	$156,259 maximum,  per violation
Failure to Correct Violation After Receiving Citation (a/k/a Failure to Abate)	$50 minimum for other than serious violations, and $100 minimum for serious violations	Maximum $15,625 for each day during which the violation continues	$15,625 maximum for each day beyond the abatement date

The Legislature Will Be Watching - Annual Reporting Requirement For OR OSHA

The new law requires the Director of DCBS to submit an annual report to the Legislative Assembly. The first such report is required to be submitted no later than September 15, 2024. 

The report must include:

• The total number and amount of penalties assessed by the department;
• The total number of appeals of citations, violations and penalty assessments filed with the department; and
• The total number of inspections completed by the department, along with the scope of the inspections and the circumstances that led to the inspections.

The Take-Away Points For Employers

Not only does SB 592 massively increase potential minimum and maximum penalties for Oregon employers – to the highest levels of any safety agency in the country – it also includes provisions that will expose Oregon employers to additional comprehensive inspections. Comprehensive inspections are by nature more time-consuming, more disruptive, and more likely to find alleged deficiencies in Company safety programs.  Consequently, Oregon OSHA is more likely to issue additional citations each comprehensive inspection than would a partial scope inspection. The increase in penalties combined with an increase in citations issued by OR OSHA has the potential to result in a greater percentage of employers contesting citations and challenging OR OSHA’s enforcement and findings. Decreasing collaboration between the agency tasked with enforcing employee safety laws and the employers implementing the regulations may be an unintended downside of this new law. OR OSHA and the Oregon Attorney General’s office are already backlogged with cases coming out of the COVID-19 pandemic, when OR OSHA was among the most aggressive enforcers of state COVID-19 policies.

Ultimately, it is unclear whether other state plans or federal OSHA will take the same approach. The United States Congress has, over the years, considered raising OSHA penalty maximums – most recently in 2021, with a proposal to increase maximum penalties to $700,000 per willful or repeat (or failure to abate) violation. Though the Democratic House’s proposal never became law, Oregon’s recent legislation shows that safety agencies across the country are pressing forward and sharpening the claws of OSHA state plan agencies, especially in states under Democratic control.

Because of this renewed vigor from Oregon OSHA, employers would be wise to work with outside counsel and ensure that their safety programs, including the mandatory Accident Prevention Program, comply with Oregon law.

 

[1] The new law also permits the Director of DCBS to adjust penalties for inflation each January.

[2] Federal OSHA increased its maximum civil penalty amounts for 2023 by 7.7% effective January 17, 2023 to adjust for inflation. Federal OSHA also provides that “States that operate their own Occupational Safety and Health plans are required to adopt maximum penalty levels at least as effective as Federal OSHA’s.”

[3] Penalties for “serious” violations could be increased by up to 30% (with a ceiling of $13,653) based upon violation history and lack of good faith or down by up to 100% (with a floor of $100) based upon good faith, size, lack of history, and “immediate correction.”