Across the breadth of the federal government, departments and regulatory agencies have a new weapon against misbehavior. It’s called inflation.
Federal law mandates an annual adjustment based on the annual inflation rate in all civil penalties to maintain their deterrent value. The adjustment from 2022 to 2023 was published in the January 6 Federal Register and, by law, was effective immediately, without opportunity for public comment. This occurs every year, most often without notice, until, that is, the rate of inflation skyrockets.
Technically, the Office of Management and Budget compared the October 2021 Consumer Price Index for All Urban Consumers to the same gauge for October 2022. It then required all federal civil penalty minimums and maximums to be multiplied by that percent change and applied beginning this year.
Anyone who lived through this last year would not be surprised at the OMB result – inflation was at a 40-year high, and now, so too is the adjustment in civil penalties. Effective immediately, penalties have gone up a whopping 7.745%.
That includes the civil penalties levied by the Federal Motor Carrier Safety Administration. For example, an FMCSA out-of-service (OOS) order against a truck driver brought a $2,072 penalty last year but will incur a $2,232 penalty in 2023. The motor carrier allowing that OOS operation paid $20,719 in 2022 but faces a $22,324 fine this year.
Basic math tells us that percentage adjustments can increase large numbers significantly. A motor carrier found hauling hazardous materials after receiving an “unsatisfactory” safety rating will now pay nearly $100k per violation. And should that illegal hazmat at operation result in death or serious illness/injury, the tab is edging close to a quarter million dollars.
The true cost of unsafe practices often goes well beyond the check that is written to the federal government. Once an enforcement case settles, it becomes a matter of public record. The general public has access to the details of the case on FMCSA’s website — including the violations and fines paid by a motor carrier. Customers, insurers, drivers, and other employees can see the violations and resulting penalties.
Do these high civil penalties really occur? In fiscal year 2022, FMCSA closed over $3.55 million worth of enforcement cases. Now, adjust that figure by 7.745% for an estimate of what penalties fiscal year 2023 enforcement activity may impose.
Again, the civil penalty amounts were adjusted to maintain their deterrent value. That deterrence is magnified by the transparency of the FMCSA website – everyone can see who has been fined. The solution? Stay safe and compliant – and let FMCSA levy those penalties on other operators.
The PrePass blog and podcasts are published as a public service of PrePass®, the most reliable and technologically advanced weigh station bypass and electronic trucking toll payment platform in North America. PrePass also includes INFORM™ Safety and Tolling software for improving truck safety scores and lowering toll costs.