WISHA Interim Operations Memorandum #97-5-D
 

WISHA Interim Operations Memorandum
#97-5-D
Reduction of Penalties During WISHA Reassumptions

Approved:
Michael Wood, Senior Program Manager
Policy & Technical Services

Date Issued:
May 26, 1997

Background

The Board of Industrial Insurance Appeals (BIIA) exercises jurisdiction over citations issued by the Department of Labor and Industries (L&I) pursuant to the Washington Industrial Safety and Health Act (WISHA). However, L&I frequently reassumes jurisdiction over appealed citations, as authorized by RCW 49.17.140.

One frequent topic of discussion during such a reassumption is the amount of the penalty assessed. This interim memo, which will remain in place until appropriate guidance can be provided in the WISHA Administration Manual, provides direction to regional hearings officers (RHOs) and other staff involved in reassumptions regarding reduction of WISHA penalties.

Policy

  1. When should a penalty be reduced or eliminated? As a general rule, penalties may be reduced or eliminated only when one of the following circumstances applies:

    2. a. the violation on which the penalties were based was in error (or was classified as in error);

    b. the penalty was not calculated in accordance with L&I regulations, WISHA Compliance Manual guidelines, and any other applicable policy guidance (in such cases, adjustments in the penalty would be limited to the amount in error);

    c. the department receives additional facts that affect violation classification or penalty calculation and the supervisor, inspector or Compliance Manager concur as to the validity of the facts and their effect on violation classification or penalty amount (in such cases, any adjustment in the penalty only to the exent justified by the additional facts);

    d. the employer agrees to take extra steps as part of a Reassumptions Settlement Agreement (RSA) made in accordance with WISHA Interim Memorandum #97-5-C and other applicable WISHA policies.

    NOTE: Penalty reductions for "extra steps" taken by employers cannot be made in the absence of an RSA.

    e. the employer provides a copy of an order of bankruptcy;

    f. the employer demonstrates substantial financial hardship by allowing the RHO to review the company's most recent federal tax return, including the most recent amended return, if any (if the company is a proprietorship, partnership, limited liability corporation or "S" corporation, the most recent individual federal tax returns, including any amendments, must also be reviewed for each owner).

    If the employer is a public entity, substantial financial hardship must be evidenced by the most recent annual financial statement conducted by an independent auditor. The public employer must also submit all independently-audited statements that cover a shorter period if they were completed after the most recent annual statement.

    If there is any doubt establishing financial hardship for either a public or private employer in the absence of an order of bankruptcy, the RHO should contact the WISHA Reassumptions Program Manager for assistance.

    NOTE: Penalty reductions due to bankruptcy or financial hardship may be addressed as part of an RSA.

  2. What about violations where proof may be a problem? If the RHO is satisified that a serious hazard existed to which employees were exposed but is reasonably certain that L&I will not be able to prove the violation to the satisfaction of the BIIA or the courts he or she may reduce the penalty to as little as the minimum required by the WISHA Compliance Manual, provided that the hazard has been or will be abated in a timely manner.

    3. NOTE: Such a penalty reduction cannot be made without an RSA that includes the employer's agreement not to appeal and employer verification of the abatement of any hazards (see WIM #97-5-C).

  3. Who must be consulted before a penalty reduction is made? Before the RHO reduces a penalty for any reason, he or she must take the following steps:

    4. a. The RHO must consult with involved WISHA compliance staff. If possible, this consultation should be with the appropriate supervisor. If the supervisor is unavailable, he or she should consult with the inspector. If time does not permit consultations with either the supervisor or the inspector -- or if there is a significant disagreement -- the Compliance Manager must be consulted.

    Regions may adopt policies to facilitate such communication or to require additional communication as appropriate.

    b. The RHO also must consult any employee or employee representative who attended the informal conference, or who has request to be kept informed about the particular citation or other issues under appeal.

    c. If the matter is a major case (see Section 5 of WIM 97-5-C), the RHO must contact the Compliance

    Manager and WISHA Coordinator to ensure that the proposed penalty is consistent with statewide compliance efforts. The penalty must be adjusted to conform to the recommendation of the WISHA Coordinator in such cases.