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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
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.
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
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
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
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!
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
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
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
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
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
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?
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
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
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
UDAP Examples
The list goes on and on….
