Posts Tagged ‘penalties’

What’s odd about this picture?

Tuesday, August 13th, 2013

Delaine Davis has been sentenced to 4 to 6 years in Wyoming Women’s Center jail. Her crime was workers’ compensation fraud of $11,072. She knowingly collected workers comp benefits while being gainfully employed in another job. In addition to her jail term, she was ordered by Judge Marvin L. Tyler to pay $11,072 in restitution to the State of Wyoming.

Is it just us, or does that penalty seem a little harsh? Perhaps there are some extenuating circumstances that contributed to the sentence that weren’t revealed in news reports. Certainly, we would agree that fraud is bad and should be punished – we have no argument with that. Apparently, Ms. Davis willfully violated the law. She should indeed be required to pay restitution and suffer some punishment for her crime — but 4 to 6 years seems pretty steep to us — particularly in contrast to the “up to 6 month” jail penalty for a willful violation resulting in a worker fatality under OSHA’s general duty clause:

(e) Any employer who willfully violates any standard, rule, or order promulgated pursuant to section 6 of this Act, or of any regulations prescribed pursuant to this Act, and that violation caused death to any employee, shall, upon conviction, be punished by a fine of not more than $10,000 or by imprisonment for not more than six months, or by both; except that if the conviction is for a violation committed after a first conviction of such person, punishment shall be by a fine of not more than $20,000 or by imprisonment for not more than one year, or by both.

In looking further into the data, we turned up this SHRM article: Report Finds OSHA Resources Lacking, Penalties Weak, which notes that:

“The median penalty for a fatality investigation conducted in FY 2012 was $5,175 for federal OSHA, and the median current penalty for the state OSHA plans combined was $4,200, according to OSHA enforcement data.

Criminal enforcement under the OSH Act has been and remains exceedingly rare, the report said.

Only 84 cases have been prosecuted since 1970, with defendants serving a total of 89 months in prison. During this time there were more than 390,000 workplace fatalities, according to Labor Department data. In FY 2012 13 cases were referred for possible criminal prosecution.”

Fraud is serious business and we all pay the price. Wyoming has chosen to wield a pretty big stick in doling out punishment, noting that “Workers’ compensation is intended to help workers injured on the job, We won’t stand for people who defraud and abuse this important program.” OK. But when it comes to protecting workers and keeping them safe, the state takes less of a hard line and more of a courtesy approach to safety, generally favoring carrots over penalties. This hasn’t produced great results: While there have been some small improvements of late, Wyoming has a pretty ignominious record when it comes to worker fatalities. Except for the most recent year, Wyoming has consistently ranked as the worst or the next-to-the-worst state for worker fatalities over the past decade.

Young workers + injuries + labor law violations = huge penalties

Monday, July 9th, 2012

Every summer, we beat the drum about the moral mandate of keeping young workers safe. But as with many things, the morale mandate all too often speaks to employers in a soft voice while money shouts in a big voice. So if “doing the right thing” isn’t enough of a reason to keep kids safe, there’s also a big economic incentive in the form of penalty avoidance for employers to toe the line when it comes to safety and strict adherence to youth labor laws: if a young worker is injured, the employer may be subject to steep additional penalties if labor law violations are present. These penalties are “uninsurable” – that is, they will be out-of-pocket for the employer since the insurer is not on the hook for penalties related to an employer’s labor law violations.
In Denmark v. Industrial Manufacturing Specialists, Inc., the Alabama Court of Civil Appeals recently upheld double compensation for an injured 16 year old worker due to the employer’s child labor laws violations. The youth was a part-time worker who was working with a coworker to load a 1,300-pound metal bar stock onto a table so that it could be cut by a band saw when the load fell on the youth, crushing him and causing internal injuries and a fractured ankle. Even though the youth was not actually engaged in the prohibited activity (use of the band saw), “The court found a nexus between the task the worker was performing at the time of the accident and the manufacturer’s violation of the child labor laws. Therefore, the worker was entitled to double compensation for his injury.”
Before employing minors, it is essential to know and obey child labor laws, particularly in regards to prohibited work. Employers who fail in this charge may wind up paying double compensation and/or fines if an injury occurs. There are federal laws governing the employment of minors in both non-farm work and in agricultural work, but employers need to know the governing state law because the Department of Labor states that, “Where state law differs from federal law on child labor, the law with the more rigorous standard applies.”
Laws cover such matters as minimum age, prohibited work by age cohort, whether work permits are needed, and restrictions on the hours of work allowed. Here are some compliance resources for employers. As with most laws, ignorance of the law is not a defense.

Federal Laws – Hiring Youth & Compliance Assistance
The U.S. Department of Labor’s Wage and Hour Division (WHD) administers and enforces the federal child labor laws. Generally speaking, the Fair Labor Standards Act (FLSA) sets the minimum age for employment (14 years for non-agricultural jobs), restricts the hours youth under the age of 16 may work, and prohibits youth under the age of 18 from being employed in hazardous occupations. In addition, the FLSA establishes subminimum wage standards for certain employees who are less than 20 years of age, full-time students, student learners, apprentices, and workers with disabilities. Employers generally must have authorization from WHD in order to pay sub-minimum wage rates.

Among the FLSA penalties, DOL says that:

Employers are subject to a civil money penalty of up to $11,000 per worker for each violation of the child labor provisions. In addition, employers are subject to a civil money penalty of $50,000 for each violation occurring after May 21, 2008 that causes the death or serious injury of any minor employee – such penalty may be doubled, up to $100,000, when the violations are determined to be willful or repeated.

See more at the Deparment of Labor’s Youth & Labor topic page
State Laws
Many states offer double compensation or other penalties related to an injured youth when there are labor violations. In some instances, penalties can be imposed even when the labor violations aren’t directly related to the injury.
Selected State Child Labor Standards Affecting Minors Under 18 in Non-farm Employment as of January 1, 2012
State Child Labor Laws Applicable to Agricultural Employment
Links to state labor offices
Compliance with labor laws is only one part of the employer’s responsibility: the other is ensuring a safe environment. Young workers are green workers who don’t have the experience, judgement, and work hardening that older workers have. That heightens their risk of injury. It’s important to provide task-specific training with an emphasis on safety. We also encourage the idea of pairing a young worker up with a more experienced mentor. The article Preventing Young Worker Fatalities offers a good list of tips. Also, see our prior posts about young workers for more tips.

OSHA issues largest fine on record to BP

Tuesday, November 3rd, 2009

At the end of last week, OSHA issued $87 million in penalties against BP for failure to make make the changes which were specified in a settlement agreement related to the 2005 explosion at a Texas refinery which killed 15 and injured more than 170 others. The second-highest penalty that OSHA has imposed was in 2005 for $21 million – also issued to BP related to the same explosion.
BP had paid the $21 million fine and agreed to corrective actions to eliminate potential hazards similar to those that caused the 2005 tragedy as part of a settlement agreement with OSHA in September 2005. The penalties were imposed after a 6 month OSHA investigation. BP had recently sought but was denied more time for compliance.
OSHA issued 270 “notifications of failure to abate” previously identified hazards, as well as 439 new willful violations for failures to follow industry-accepted controls. A willful violation is defined by OSHA as an intentional violation of the Act or plain indifference to its requirements.
Unsurprisingly, BP is contesting the fines, stating that they have spent more than $1 billion on modernization and safety and have taken 550 corrective actions. (See BP’s offical response and October 5, 2009 response to OSHA, a 17-page PDF). The company has also gotten support from Texas City’s mayor, Matt Doyle, who has criticized OSHA for the fines, calling OSHA’s actions “one of the biggest affronts to the working men and women of this country” and “an example of intrusion into private business by government.”
Jordan Barab, acting assistant secretary of labor for OSHA, noted that BP had four years to comply with the agreement, and defended OSHA’s actions as protecting the safety of working men and women. While Barab acknowledged that improvements had been made, he noted that some of the most important things had not been addressed, particularly pressure relief and automatic shutdown systems, problems directly related to the accident. “Our experts say BP is 10 years behind where a lot of the leading refineries are when it comes to process safety,” Barab said. “This is a company that should have known better.”