in-20250618-IR-610250159FRA: DIGEST CALCULATING IOSHA PENALTIES

Final Rule LSA Document #25-159 DIGEST Sec. 1. (a) The penalty structure described in this rule is part of IOSHA's general enforcement policy and shall normally be applied as set forth in this rule. A division director can exercise discretion to depart from the penalty policy in cases where penalty adjustments do not advance the deterrent goal of the Act. The application of penalty adjustments can therefore result in safety orders issued with all applicable adjustments or no adjustments. Except as provided in subsection (b), an inspection must maintain consistent penalty adjustments throughout the recommended safety orders. (b) A decision not to apply the penalty adjustments is normally based on consideration of at least one (1) of the factors listed in this subsection. However, this list is not intended to be exhaustive. If the decision not to apply penalty adjustments is based on considerations other than the factors listed in this subsection, the decision must be fully explained in the case file and approved by the deputy commissioner or their designee. The factors to be considered include the following: (c) Minimum penalties are applied as follows: Sec. 2. (a) The gravity of a violation is the primary consideration in determining penalty amounts. Gravity is the basis for calculating the basic penalty for serious and nonserious violations, and is determined by severity and probability. (b) The first step in classifying an alleged violation as serious or nonserious is based on the severity of the potential injury or illness that could result from the alleged violation. The following categories must be considered in assessing the severity of potential injuries or illnesses: (c) The probability that an injury or illness could occur as a result of the alleged violation has no role in determining the classification of a violation, but does affect the amount of the proposed penalty. Probability is assessed as follows: (d) The gravity-based penalty (GBP) for each violation is determined by combining the severity assessment and final probability assessment. The GBP is an unreduced penalty and calculated in accordance with the procedures described in this rule. For purposes of this rule, the term "unreduced penalty" has the same meaning as GBP. (e) The GBP for serious violations is determined as follows: Severity + Probability = GBP Table 4-1: Serious Violations (f) The GBP for nonserious violations is determined as follows: Table 4-2: Nonserious Violations (g) For some cases, a GBP may be assigned without using the severity and probability assessment procedures outlined in this section when these procedures cannot appropriately be used. In these cases, the assessment assigned and the reasons for doing so must be fully explained in the case file. (h) In egregious cases, violation-by-violation penalties are applied. This occurs when each instance of noncompliance is considered a separate violation, with individual proposed penalties for each violation. These cases must be handled in accordance with the federal Occupational Health and Safety Administration (OSHA) CPL 02-00-080, Handling of Cases to be Proposed for Violation-By-Violation Penalties, dated October 21, 1990. Penalties calculated under this policy may not be proposed without the concurrence of the deputy commissioner. (i) Combined or grouped violations are considered as one (1) violation with one (1) GBP. Multiple violations of a single standard may be combined into one (1) safety order item. When a hazard is identified that involves interrelated violations of different standards, the violations may be grouped into a single item. The following procedures apply to the calculation of penalties for combined and grouped violations: Sec. 3. (a) Penalty adjustments vary depending on an employer's size, determined by the maximum number of employees, good faith, and a history of previous violations. Maximum penalty reductions are generally as follows: (b) After the classification as serious or nonserious, and the GBPs have been determined for each violation, the penalty reduction factors for size, good faith, and history are applied subject to the following limitations: (c) A history reduction of ten percent (10%) is given to employers that have not been issued by IOSHA any serious, knowing, or repeat violations in the past three (3) years. (d) The three (3) year history of no prior safety orders from IOSHA is calculated from the opening conference date of the current inspection. Only safety orders that have become a final order under IC 22-8-1.1-35.6(a) within the three (3) years immediately before the opening conference date shall be considered. (e) A history reduction may not be applied under the following conditions: (f) A good faith penalty reduction is permitted to recognize an employer's effort to carry out an effective safety and health management system in the workplace. A good faith reduction is not related to an employer that immediately corrects or initiates steps to abate a hazard after being informed of a violation by the compliance safety and health officer (CSHO). The following apply to reductions for good faith: (g) A penalty reduction of not more than seventy percent (70%) is permitted for small employers and eighty percent (80%) for serious knowing violations under Table 4-5 in section 5 of this rule. The size of the employer is calculated based on the maximum number of employees of an employer at all workplaces nationwide at any one (1) time during the previous twelve (12) months. (h) Reduction for size may not be given for an alleged violation that could have reasonably contributed to a fatal incident. (i) The rates of size reduction to be applied are as follows: Table 4-3: Size Reduction (j) When an employer with one (1) to twenty-five (25) employees has at least one (1) serious violation of high gravity or multiple serious violations of moderate gravity showing a lack of concern for employee safety and health, the CSHO may recommend that only a partial reduction in penalty may be permitted for size. If the division director approves the partial reduction, the justification is to be fully explained in the case file. (k) The total size reduction normally equals the sum of the reductions for each factor. The following table gives an overview of the percent of penalty reductions that apply to serious, nonserious, and repeat violations, and may be used for determining appropriate reduced penalties for serious and nonserious violations: Table 4-4: Penalty Table (l) Starred figures (*) in Table 4-4 represent penalty amounts not normally proposed for high gravity serious violations because no reduction for good faith is made in those cases. These amounts may occasionally apply to nonserious violations where the division director has determined a high unreduced penalty amount to be warranted. Sec. 4. (a) Repeat violations must be evaluated as serious or nonserious, based on current workplace conditions, and not on hazards found in an earlier case. (b) A GBP must be calculated for repeat violations based on facts noted during the current inspection. (c) Only the reduction factor for size, appropriate to the facts at the time of the reinspection, may be applied. (d) The amount of an increase to a proposed penalty for repeat violations is determined by the size of the employer's business as follows: (e) For a repeat, nonserious violation that otherwise has no initial penalty, a GBP penalty of two hundred dollars ($200) is proposed for the first repeat violation, five hundred dollars ($500) for the second repeat violation, and one thousand dollars ($1,000) for a third repeat violation. These penalties are not subject to the penalty increase factors discussed in subsection (d). (f) For repeated instances of regulatory violations, the initial penalty is multiplied by two (2) for the first repeat violation and five (5) for the second repeat violation. If the division director determines that it is necessary to achieve the proper deterrent effect, the initial penalty may be multiplied by ten (10). Sec. 5. (a) Knowing violations are classified as serious or nonserious. There may be no reduction for good faith, and the total penalty, after reductions, may not be less than the statutory minimum. (b) The reduction factors for size for serious knowing violations are applied as shown in the following table. This chart helps lessen the impact of large penalties for small employers with not more than fifty (50) employees. For violations that are not serious knowing, Table 4-4 in section 3 of this rule is used: Table 4-5: Serious Knowing Penalty Reductions (c) The reduction factor for history is applied, and the proposed penalty determined, from the following table: Table 4-6: Penalties to be Proposed for Serious Knowing Violations (d) For regulatory violations determined to be knowing, the GBP penalty is multiplied by ten (10). Sec. 6. (a) Failure to correct penalties are proposed when: (b) A GBP for unabated violations is to be calculated for failure to correct a serious or nonserious violation based on the facts noted on reinspection. This recalculated GBP, however, may not be less than that proposed for the item when originally issued. The division director may reduce or eliminate the daily proposed penalty when the CSHO believes and documents in the case file that the employer has made a good faith effort to correct the violation and had an objectively reasonable belief that it was fully abated. (c) Egregious cases are handled under the OSHA CPL 02-00-080, Handling of Cases to be Proposed for Violation-By-Violation Penalties, dated October 21, 1990. (d) In instances where no penalty was initially proposed, an appropriate penalty shall be determined after consulting with the division director. In no case may the GBP be less than one thousand dollars ($1,000) per day. (e) Only the reduction factor for size, based on the circumstances noted during the reinspection, may be applied to arrive at the daily proposed penalty. (f) The daily proposed penalty is multiplied by the number of calendar days the violation has continued unabated, except as follows: (g) When a safety order has been partially abated, the division director may authorize a reduction of twenty-five percent (25%) to seventy-five percent (75%) to the amount of the proposed penalty calculated as outlined in subsection (f). (h) When a violation consists of multiple instances and the follow-up inspection reveals that only some instances of the violation have been corrected, the additional daily proposed penalty must take into consideration the extent of the abatement efforts. (i) When an employer continues to fail to correct a violation and it becomes appropriate to issue a second failure to correct violation for the same hazard, there may be no reduction in penalty, and the penalty is issued at seven thousand dollars ($7,000) per day for not more than thirty (30) days. Sec. 7. (a) GBPs for regulatory violations, including posting requirements, may be reduced for size and history, excluding knowing violations. (b) Penalties for violating posting requirements are proposed as follows: (c) Penalties for abatement verification regulation violations are proposed as follows: (d) Penalties for injury and illness records and reporting violations are proposed as follows: Sec. 8. (a) If an employer is issued a safety order for failing to provide access to records as required under 29 CFR 1910.1020 for inspection and copying by: (b) This does not preclude the use of violation-by-violation or per employee penalties where higher penalties are appropriate.