The Hidden Impact of an OSHA Citation

Contractor receiving worrying phone call while on a job site.

This blog was updated in January 2024, to reflect the annual increases in civil penalties for OSHA violations published by The U.S. Department of Labor (DOL) on January 8, 2024, effective January 15, 2024.

Workplace accidents and OSHA inspections put a lot on the line for employers, especially if they lead to citations. If your business has recently received a citation, it is in your best interests to act immediately; you have rights and options to raise a defense, mitigate penalties, and defend against what can be a devastating impact.

Far too many employers resign themselves to accepting OSHA citations and penalties without exploring available options, and many others make problems worse by mishandling them altogether.

OSHA's Maximum Penalties for Citations

OSHA citations come with penalties that have a far-reaching impact on employers, their reputations, and the future of their businesses. These consequences may lead many employers to seek legal support and representation to defend against citations for OSHA violations. 

As of January 12, 2024, the following maximum OSHA penalty amounts apply:

  • Serious / Other-Than-Serious / Posting Requirements - $16,131 per violation
  • Failure to Abate Prior Violation – $16,131 per day beyond the abatement date
  • Willful / Repeated Violations - $161,323

Why Shouldn't I Just Pay the OSHA Penalty?

Fines alone can be substantial, especially if employers have a history of violations, previous citations, or issues that have made them subject to OSHA’s Severe Violator Enforcement Program or criminal violations.

However, the price of fines issued by OSHA is not the only burden employers may face. Ancillary costs and other consequences – such as reputational harm and the cost of abatement – can also have a significant impact on a business’s bottom line and solvency and damage the employer's ability to acquire future business.

Other hidden and not-so-hidden consequences of an OSHA citation include:

  • Costs associated with abatement – Employers are required by law to certify full and complete abatement of alleged hazards, which means they must first determine what, according to OSHA, should be done to abate the condition noted in the violation. In some cases, this can be as straightforward as employee training. Often, however, OSHA requires substantial changes in materials, equipment, and practices used by employers. Not only do these changes inherently cost time and money, they may also impact employers through slowed or reduced rates of production, which directly affects revenue.
  • Risks of future litigation – OSHA citations create the potential for collateral litigation, including civil lawsuits related to liability, workers’ compensation, personal injury or wrongful death lawsuits, indemnification proceedings, and more. They can also open the door to parallel inspections and sanctions from other regulatory authorities, including the Environmental Protection Agency (EPA). These matters are fact-specific, but they can be substantially impacted by OSHA citations.
  • Repeat citations – OSHA’s repeat citation policy allows the agency to classify new violations involving similar hazards as repeat violations, which carry fines of up to $161,323. This can significantly impact employers, especially when companies operate multiple locations and facilities.
  • Willful citations – Violations classified as willful allege employers intentionally and knowingly disregarded regulations. OSHA dedicates additional resources to handling willful citations, which can not only result in significantly enhanced fines, punitive damages, and criminal violations but also future risks involving increased oversight (i.e. more frequent inspections and citations) and company reputation. In some cases, willful violations may have criminal implications, especially if they result in catastrophes and/or death.
  • Competition/loss of contracts – Reputation is not only important to shareholders, employees, and consumers but also to contractors and other companies with whom employers conduct business. Poor safety records can play an important role in competing for new business and retaining current contracts, which is why citations can put companies at a disadvantage and threaten their bottom line. In highly competitive industries, this can be magnified, as some companies decline projects involving businesses with even “serious” violations.

The far-reaching impact of an OSHA citation helps illustrate that even when penalties associated with a citation seem insignificant or manageable, they can end up being extremely costly. As such, assessing the cumulative impact of penalties, fines, and future consequences is critical to evaluating options and making informed decisions, such as whether or not a citation should be contested, strategies formulated for re-classification and mitigation of consequences, or settled for reasonable terms.

Regarded as one of Texas’ leading law firms in OSHA standards and defense, Hendershot Cowart P.C. is prepared to help Texas employers and others nationwide immediately following workplace accidents, inspections, and citations. Discuss your particular situation with a member of our team by calling (713) 909-7323.

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  • What Is OSHA's Definition of a “Willful” Work Safety Violation? Read More

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