Approximately 12 percent of all OSHA inspections performed by federal and 18(b) state plan states since January 1988 resulted in the need for some type of penalty debt collection effort. These efforts were needed more often within certain classes of employers and for fatality/catastrophe inspections. Willful violators of OSHA regulations were four times more likely to require debt collection activities. Timely and guaranteed payment of penalties could be achieved if the government were to implement certain administrative procedures.Under current OSHA policy, penalties for uncontested citations become due and payable 15 working days following the employers receipt of the Citation and Notification of Penalty. If the employer enters into an Informal Settlement Agreement with the Area Office, penalties are due 15 working days following the last dated signature unless a different due date is specified as part of the agreement. Due dates for contested penalties are dependent upon whether the case is resolved by a Formal Settlement Agreement, Administrative Law Judge decision, OSHRC decision or a court judgment and range between 30-90 days following resolution. Once a case becomes a final order or is resolved, unpaid penalties become delinquent 30 calendar days after the due date.
Examination of employer OSHA debt records during the period January 1, 1988 through April 1, 1994 revealed that approximately 12 percent of all inspections required some form of debt collection effort. These actions might include sending one or more demand letters, referral to a debt collection agency or referral to the Regional Solicitors office for legal action. Further analysis of the data revealed that construction and manufacturing employers were more likely than other classes of employers to be delinquent in payment of their penalties. Analysis by fatality/catastrophe inspection indicated that 16 percent of these resulted in employer debt. Most significantly, analysis by inspections with one or more proposed willful violations revealed 49 percent debt occurrences, over four times greater than the average for all inspections during the same time period.
Failure by the government to aggressively combat late or nonpayment of OSHA penalties is unfair to employers who pay their penalties when due and is inconsistent with sound public policy. Delinquent employers are given a competitive advantage and therefore are more likely to survive economic downturns. In the same stroke, responsible marginal companies may be driven out of business. It is unlikely that Congress intended the agency to favor companies who have little regard for worker safety.
Several administrative options can be implemented by OSHA to reduce nonpayment of penalties. First, the agency could report all uncollected debt to the Internal Revenue Service as unreported income. The IRS could in turn include these employers within their audit schedule. It is not unreasonable to assume that employers who shirk their responsibilities in one area of business may also have a similar attitude when it comes to paying taxes. Alternatively, the IRS could be directed to garnish tax refunds from delinquent employers.
Second, there could be mandatory OSHA registration for construction sites as is currently required in Ontario, Canada. Information provided might include corporate officer personal identification, company financial and insurance information, and for construction sites, owner/architect information. Contractors could be required to produce their OSHA registration and post a penalty payment bond before building or construction permits are issued.
A third option might be the prohibition of federal or state funded contract awards to employers with outstanding penalties. One of OSHA’s fiscal year 1994 goals is to implement an executive order that would mandate corporate health and safety performance be considered for all federal contracts exceeding $1M. This could easily be expanded to include penalty payment histories.
Finally, all delinquent employers could agressively be reported to TRW, Dun & Bradstreet and other private credit reporting bureaus.
Copyright 1997 OSHA DATA (tm), Maplewood, NJ.
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