Employer gets no reduction in OSHA fines for financial hardship: Ruling

An administrative law judge of the Occupational Safety and Health Review Commission ordered a flax grain seed handling employer to pay workplace safety fines totaling $4,750 after the employer failed to provide sufficient documentation to prove the company deserved an additional penalty reduction because of its alleged financial hardships.

The U.S. Occupational Safety and Health Administration inspected North Dakota Innovations Inc.’s worksite in Tappen, North Dakota, on Feb. 15, and issued a citation and notification of penalty alleging seven serious and three other-than-serious violations of the Occupational Safety and Health Act, according to review commission documents in Secretary of Labor v. North Dakota Innovations Inc. OSHA applied a 70% reduction for size because the company has fewer than 10 employees, with final proposed penalties totaling $8,315.

The employer timely contested the citations, but in a July pretrial conference clarified that he only wanted to contest the penalty amounts and later withdrew his notice of contest as it related to the citations and classifications of the alleged violations, according to review commission documents. During the conference, the employer raised inability to pay as a part of the challenge to the penalty amount, claiming that the company had barely made payroll and various monthly payments with its current workload, had already spent $15,000 on electrical work to abate the citations and that any penalty higher than $400 would be “financially disastrous,” according to the ruling.

The law judge ordered the employer to produce a list of documents necessary to consider reducing the penalty based on financial hardship, specifically signed tax returns and financial statements for the last three years and bank statements from the last year. But the employer only provided four months of bank statements covering April through July of 2018 as well as various annual lease payments for industrial equipment and stated that no further documentation would be produced, according to review commission documents.

The employer “bears the burden to prove that it warrants a further reduction in penalties due to its inability to pay beyond the reduction it has already received in its size reduction credit,” the law judge stated in the decision. “An unsubstantiated claim of inability to pay will not be considered by the court.”

But the law judge viewed several factors in the employer’s favor in assessing lower penalties, including that there was no demonstrated history of non-compliance with relevant statutes and that the employer had a written safety plan and hired a safety consultant to help implement it to provide a safe work environment.

“Although violations of safety standards were present, (the employer) was at least attempting to achieve compliance with OSHA standards and willingly cooperated throughout the inspection,” the law judge stated.

The law judge’s decision became a final order of the commission on Tuesday.

A company spokesperson could not be immediately reached for comment.