dol, osha, epa, and ftc fine increases - august 3, 2016
TRANSCRIPT
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DOL, OSHA, EPA and
FTC Fines Increase
August 1, 2016
Presented by:
Eric Schmitz
Senior Vice President,
KPA Product and Business Development
Kathryn Carlson
Vice President,
KPA HR Management Products
and
Ryan Lane
Director,
KPA Sales & Finance Compliance
and
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A comprehensive solution for Environmental Health & Safety, HR
Management, and Sales & Finance Compliance.
• 8/10 of the largest dealership groups in the
country count on KPA.
• KPA has been endorsed by 26 national and
state dealer associations
• Founding member of the Clean Auto Alliance.
A little bit about KPA – KPA delivers Environmental Health & Safety, HR
Management, and Sales & Finance Compliance programs with a vision of
creating a Better Workplace, Better Workforce, and a Better World. Over 6,500
clients across 48 states look to KPA as their compliance partner providing
solutions through a combination of innovative software, interactive training, and
onsite consulting, resulting in increased production and profits for your business.
KPA minimizes risks and maximizes profit for
6,500 dealers nationwide.
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PRESENTERS
Kathryn Carlson
Vice President,
KPA HR Management Products
Ryan Lane
Director,
KPA Sales & Finance Compliance
Eric Schmitz
Senior Vice President,
KPA Product and Business Development
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Questions?
If you have questions during the presentation, please submit them using the “Questions” feature
Questions will be answered at the end of the webinar
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Federal Civil Penalties Increase August 1, 2016
The FCPIA of 1990 requires agencies to adjust statutory
civil penalties for inflation and to have a deterrent,
compliance-promoting effect.
• November 2, 2015, the 2015 Adjustment Act was signed into law
that amended the FCPIA by adding two requirements:
1) A one time catch-up provision to adjust penalties to account
for inflation (increases are capped at 150% of penalties in
effect November 2, 2015)
2) Beginning January 15, 2017, agencies must annually review
statutory civil penalties and make adjustments to account for
inflation
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Federal Civil Penalties Increase August 1, 2016
Federal agencies affected by the increase include:
• Occupational Safety and Health Administration (OSHA)
• Environmental Protection Agency (EPA)
• Employment and Training Administration
• Office of Workers' Compensation Programs
• Office of the Secretary
• Wage and Hour Division
• Employee Benefits Security Administration
• Federal Trade Commission (FTC)
Let’s talk about some of these agencies!
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EPA Penalties Increase – Across All Statutes
Penalties will increase for more than 65 environmental
statutes.
• Statutes with varying increases include:• CWA
• CERCLA
• All other EPA penalties are increasing evenly across all
statutes
• Policies for imposing penalties take into account:• Seriousness of violation
• Good faith effort to comply
• Economic benefit by non-compliance
• Violator’s ability to pay
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Summary of Penalty Inflation Adjustments
Penalties are not determined by percentage. Refer to table
below for a summary of monetary ranges.
EPA-40CFR-Sec 19.4-Table 2-Penalties-Page 12
Environmental StatuteRange of Current
Penalties
Range of Penalties After Nov. 2nd, 2015 and Assessed After
Aug. 1st, 2016
Clean Air Act (CAA) $5,000 - $200,000 $8,908 - $356,312
Clean Water Act (CWA) $1,000 - $125,000 $1,782 - $257,848
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
$25,000 - $75,000 $53,907 - $161,721
Resource Conservation and Recovery Act (RCRA) $5,000 - $25,000 $14,023 - $93,750
Safe Drinking Water Act (SDWA) $2,500 - $1,000,000 $9,375 - $1,311,850
Toxic Substances Control Act (TSCA) $5,000 - $25,000 $8,908 - $37,500
Emergency Planning an Community Right-to-Know Act (EPCRA)
$25,000 - $75,000 $53,907 - $161,721
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OSHA Penalties Increase 78%
• August 1, 2016 – Maximum increase up to 78%
• Violations after November 2, 2015 subject to new penalties
STATE PLAN STATES - Required to adopt maximum penalty levels that are at
least as effective as Federal OSHA
Type of ViolationCurrent Maximum Penalty
(per violation)New Maximum Penalty
(per violation)
• Serious• Other than Serious
$7,000 Up to $12,471
• Failure to Abate$7,000 per/day beyond
abatement dateUp to $12,471 per/day
beyond abatement date
• Willful• Repeat
$70,000 Up to $124,709
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OSHA Inspection & Violations
Big Lots Stores, Inc., MA
• OSHA investigated injury resulting in hospitalization
• Boxes of patio furniture and stock in the stockroom fell and struck
the Asst. Manager
• Violations:
• Material storage too high and unstable, aisles and exits blocked
Violations Current Penalty Total PenaltyUnder New
Rule - Potential
Under New Rule - Estimate
Max. Penalty
Repeat (x2) Up to $70,000 per/violation
$66,000 Up to 78% increase
$117,480
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OSHA Inspection & Violations
Lloyd Industries, Inc., PA
• OSHA inspected facility due to employee complaint
• Violations include “Serious” and “Willful”
• Machine Guarding, Electrical, General Duty Sec. 5(a)(1)
* Current penalty is $507,000 – Employer is contesting violations *
Under new rule potential penalty could be $902,460
Violations Current Penalty Total PenaltyUnder New
Rule - Potential
Under New Rule - Estimate
Max. Penalty
Serious (x8) Up to $7,000 per/violation
$17,000 Up to 78% increase
$30,260
Willful (x7) Up to $70,000 per/violation
$490,000 Up to 78% increase
$872,200
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OSHA Top Ten Serious / Willful Violations for 2015
#Standard
(Fed/OSHA Code)Total
Violations
1 * Fall Protection (1926.501) 6,173
2 * Scaffolding (1926.451) 4,281
3 Hazard Communication (1910.1200) 3,180
4 Lockout/Tagout (1910.147) 2,739
5 * Ladders (1926.1053) 2,512
6 Respiratory Protection (1910.134) 2,250
7 Machine Guarding (1910.212) 2,242
8 Powered Industrial Trucks (1910.178) 2,182
9 Electrical Wiring Methods (1910.305) 1,976
10 Electrical-General Reqs (1910.303) 1,557
Top 10 “Serious”– Up to
$12,471 per/violation
#Standard
(Fed/OSHA Code)Total
Violations
1 * Fall Protection (1926.501) 161
2 * Asbestos (1926.1101) 47
3 * Excavations (1926.652) 44
4 * Scaffolding (1926.451) 38
5 Lockout/Tagout (1910.147) 37
6 Machine Guarding (1910.212) 35
7 P-R Confined Space (1910.146) 22
8 * Specific Excavation Reqs (1926.651)
12
9 * Fall Protection-Steel Erection (1926.760)
11
10 Respiratory Protection (1910.134)
10
Top 10 “Willful”– Up to
$124,709 per/violation
*** Construction Standard
*** Construction Standard
How might these apply to your organization?
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EBSA Penalties Increases
• Employment Retirement Income Security Act
• August 1, 2016 Violations after November 2, 2015 subject
to new penalties
Type of ViolationCurrent Maximum
Penalty (per violation)New Maximum Penalty
(per violation)
Failure to furnish reports $11 per participant Up to $28 per participant
Failure or refusal to file annual report (Form 5500). Section 502(c)(2
$1,100/day Up to $2,063/day
Failure to provide Summary of Benefits Coverage to participant or beneficiary of group health plan. Section 715
$1,000/participant or beneficiary
Up to $1,087/participant or beneficiary
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WHD Penalties Increase 72%
• Because penalties are normally assessed on a per-
employee basis, employer liability may escalate quickly if
noncompliant pay practices affect a number of employees
Type of ViolationCurrent Maximum Penalty
(per violation)New Maximum Penalty
(per violation)
First-tier penalty may be imposed for each employee who was the subject of any child labor violation.
$11,000 per employee subject to a violation
$12,080 per employee subject to a violation
Repeatedly or willfully violates the law’s minimum wage or overtime requirements [29 U.S.C. §216(e)(2)].
$1,100/dayUp to $1,894 per
employee subject to a violation
FMLA failure to post$110 per violation Up to $163 per violation
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FTC UDAP Enforcement
FTC:
• The nation’s top consumer cop that directly regulates dealers
• Very proactive lately - taking action without customer complaints
• Consent orders typical initial penalty but quick to impose monetary penalties
• Violations of $16,000 per day per incident prior to August 1st 2016
• Now $40,000 maximum civil penalty per violation per day
250% increase in Maximum Civil Penalties
• “Protecting consumers in the auto marketplace remains a top priority for the FTC,
if auto dealers are not following the rules of the road, we will step in to apply the
brakes.” Jessica Rich: Director of Consumer Protection-FTC
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UDAP Examples
The list goes on and on….