> SpaceX was fined $18,475 by OSHA for two safety violations, one of which was rated the highest penalty level of “serious” and a maximum gravity of 10.
Am I reading this right? One of the two safety violations was rated the maximum gravity of 10, yet could not have had a penalty of more than $18,475? That is not even couch money for a company the size of SpaceX. I really hope I'm missing some critical piece of info which makes this all make sense. Someone please assuage my concerns here.
A serious violation is not the highest penalty level. It's the highest that you can get (are likely to get) on the first pass. If you don't correct the flaw in your operations, they can come back and give you a "Willful violation" which is an order of magnitude larger.
Serious or even willful OSHA penalties on the scale of $7,000 or $70,000 are pretty insignificant to a large-scale operation. However, OSHA citations, used as evidence of negligence in a lawsuit, are enormously significant.
That's why when OSHA gets involved at a jobsite, smart companies choose to immediately shut down the work in question until an outside contractor can verify that the flaw has been corrected. The OSHA inspector can be tasked with interviewing employees and getting court orders so that the courts can eventually shut down a facility, but you never, ever want it to go that far.
I don't follow, $7k-70k is still nothing to the likes of SpaceX. Why are human lives valued so little? Why aren't organization size and resources taken into account when computing the violation penalty amount?
If you fine too much, you change the incentives to prioritize cover-ups and legal fights. OSHA's goal is to reduce the likelihood of workplace injuries. That usually means working with the companies and employees, not imposing ruinous fines that result in layoffs or factory closures.
OSHA penalties are laughably low. Willful and repeated violations only cost a maximum of $150k/per incident, while serious but non-willful/first time violations are capped at about $14k/incident. The real money can be in workers comp/lawsuits, but those damages are capped based on expected lifetime earnings or, if you're lucky, a multiple of expected lifetime earnings. What's really messed up is that courts typically use your demographics to calculate your expected lifetime earnings (e.g. if you're black you will get a smaller settlement than a white person because statistically black people earn less than the average person over their lifetimes). When I first read that I thought it could not possibly be true, that there had to be some vitiate that made it make sense, but it's just how it's typically done.
Globally, protections for blue collar workers are crap. The US actually has pretty good worker protections all things considered (like, even compared to Europe).
A $150K penalty could potentially ruin a small company. It's pocket change for SpaceX. Penalties should be proportionate to the assets or market cap of the offender, so that all offenders feel the same pain.
I agree with this. The penalties should be sized such that every company feels that safety is their top priority without any company being driven out of business for a properly addressed accident.
I took a minute to look. $14,502 is the highest fine for an accidental violation, however you can also be charged that amount per date for failure to fix the violation, and the penalty increases 10x to $145k for violations that are willful or repeated.
This seems fair-ish to me. Accidents happen, and we want to disincentivize them, but we want to disincentivize negligence even more. To make monetary disincentives effective, I would argue that it'd be better to assess penalties as a % of profit rather than as a flat fee, so big companies pay more than small companies. But we have the same issue with traffic citations. Someone rich pays the same speeding fee as someone poor, so it's not as effective as a disincentive.
More importantly, we should keep in mind that it's not like OSHA violations are the only possible monetary compensation. For example, SpaceX may be liable for a civil lawsuit from the victim or his family.
> I would argue that it'd be better to assess penalties as a % of profit rather than as a flat fee, so big companies pay more than small companies.
On the day when that rule goes into effect, Wall Street's lawyers & financial engineers will have already shuffled all the even-slightly-risky jobs into a maze of little break-even subcontractors, shell companies, and subsidiaries.
Yeah that kind of stuff is always going to happen. It's super tough to plug every single loophole and stop every single infraction, so we have to accept that that's not the goal. Hell, when you make murder illegal, murders commit their crimes in secret. Still, you accomplish the goal of making it much less common, and that's a win.
It's worth noting a bigger company typically has more potential osha violations. A 10 person shop might be ruined by a single willful violation, but you have to screw up pretty bad to get that willful violation. On the otherhand if you have a 10,000 person company and only one or two things are wrong, you're clearly making a serious effort to comply. If the cost of a single violation scaled with company size, then in practice organizations above a certain level of complexity would just not be possible to operate. Maybe there is something to be said for discouraging overly large corporate entities that can't keep track of of all their constituent parts, but it's very different from a trust fund baby paying to turn off speed limits.
Should really also reflect the company involved. That is peanuts to SpaceX, fine should be in the millions. But, your point on possible civil lawsuits makes sense. As a legal fine, though for a corporation last worth $100B, not enough.
> violations was rated the maximum gravity of 10, yet could not have had a penalty of more than $18,475
OSHA isn't a punitive organization. That said, OSHA violations frequently convert into civil damages. This seems fairer than the government getting a check.
Also, OSHA violations aren't restricted to safety incidents. Once an incident occurs, OSHA can go back and assess fines for each violation that didn't result in an injury.
There is a maximum of $14,502 per violation. If you are trying to maintain a decently safe workplace, I think a that is probably roughly appropriate for a serious mistake in safety. I believe if you have many ways in which your workplace is unsafe it would build up pretty quick.
Willful or Repeated violations cost 10x more. And failing to fix something costs 14k per day.
OSHA's primary purpose is not punitive. It is to ensure that organizations create and follow safety procedures. OSHA is not a silver bullet. Nothing is. Sometimes things just suck. I cannot assuage your concerns.
I don't want this to sound like normalizing a safety deficit. It's not OK. But the incident happened and that sucks. OSHA can't immediately fix things and that sucks. Punitive damages don't immediately fix things and that sucks; they add some motivation, but they don't directly fix anything.
Am I reading this right? One of the two safety violations was rated the maximum gravity of 10, yet could not have had a penalty of more than $18,475? That is not even couch money for a company the size of SpaceX. I really hope I'm missing some critical piece of info which makes this all make sense. Someone please assuage my concerns here.