The Occupational Safety and Health Administration wrote off nearly $100 million in fines as uncollectible during the past three fiscal years, according to Bloomberg Law.
The rate of outstanding debt reflects about 20% of cited employers who do not pay their penalties. In response, this year, OSHA will start targeting those employers with follow-up inspections. It also recently began increasing attempts to collect the fines.
During fiscal years 2018-20, OSHA had annually closed out an average of 4,600 cases after attempts to collect fines failed. During fiscal years 2015-17, OSHA closed out an average of 1,834 cases annually for nonpayment, with uncollected fines for the three years totaling $23.45 million.
Some agency officials and former OSHA officials reportedly cited reasons for the jump in bad debt cases, including small employers avoiding paying fines by changing identities and a Treasury Department software change that led to collection notices going unmailed.
Under the agency’s new collection initiative, OSHA headquarters will produce a monthly list of employers who have not paid fines on time and distribute the list to area offices. The bad debt cases will be added to lists of employers to be inspected as part of emphasis programs—such as preventing construction falls—or on a separate list if none of the emphasis programs apply to the employer.
OSHA also is boosting attempts to contact employers. Previously, demand letters were sent 30 and 60 days after inspection results became final. OSHA now also will send a letter at the one-week milestone and telephone the employer after two weeks have passed.
If OSHA does not collect a fine within 120 days, the bad debt case is forwarded to the Treasury Department, which has about two years to collect the fines. In accordance with federal debt collection guidelines, if the debt is not collected within about two years, OSHA is notified of the unpaid debt, and the inspection case typically is closed.
In rare circumstances, OSHA may ask the Department of Treasury and the Department of Justice to file a federal debt collection lawsuit against an employer—often if a large fine is involved or a local OSHA office believes a business can be found.
