The Price Tag for Violating Regulations Just Went Up
June 2015, TruckingInfo.com - Department
The Federal Motor Carrier Safety Administration has a mission statement of reducing the number of commercial motor vehicle crashes, and the injuries and fatalities associated with them.
One way to achieve this goal is to identify high-risk motor carriers through FMCSA’s Compliance, Safety, Accountability enforcement program. Carriers that pose the greatest safety risk will find themselves subject to an FMCSA investigation, or audit, of their compliance records.
FMCSA issues fines and penalties as a result of these audits as further leverage to promote highway safety. Both motor carriers and their employees could face monetary penalties based on violations of the Federal Motor Carrier Safety Regulations or Hazardous Materials Regulations.
The minimum and maximum dollar amounts for these fines are routinely adjusted to reflect inflation, and the latest change became effective June 2. In some cases, it’s a hefty increase. The maximum fine has gone from $11,000 to $16,000 for egregious hours of service violations, for instance, and the maximum hazmat fine has gone up from $50,000 to $75,000.
A few of the categories of fines appearing in Appendix B to Part 386 have been provided below. For a comprehensive look at all the affected violations, you’ll find the entire Federal Register notice at www.jjkeller.com/tmc.
Some in the transportation industry ask themselves, “How much is this going to cost me if we violate this regulation?” They may try to rationalize breaking rules based on the potential fines. However, the true cost often goes well beyond the check that is written to the federal government.
Once an enforcement case is settled, 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. This exposure may have a negative impact on a company’s brand. For example, in most cases, brokers and shippers will examine a motor carrier’s safety record before contracting with it. Most insurance providers are actively monitoring their customers’ safety records, and a motor carrier’s rates may be affected.
Another area of concern might be a carrier’s ability to attract qualified commercial drivers and truck technicians. With a tight labor market, quality applicants will probably go to organizations that have a corporate safety culture that is reflected in their safety rating. The fines associated with a past enforcement case might dissuade many from even applying to a motor carrier.
How a motor carrier fared during an audit and the amount it was penalized by the FMCSA is also available in the event of any lawsuits against the company. Just imagine an attorney calling into question the condition of your vehicles or the aptitude of your staff based on a fine from the FMCSA. Such actions could result in claims of negligent hiring or negligent entrustment for drivers, technicians, dispatchers, and the like.
Fines for violating the safety regulations have a range, and a motor carrier is not automatically penalized with the highest dollar amount in a Settlement Agreement with the FMCSA. One factor that is taken into consideration when assessing fines is a motor carrier’s “good faith efforts” to correct deficiencies. By applying new administrative procedures (i.e., safety management controls) going forward, you may be able to limit your monetary penalties and possibly reduce your liabilities.
Kathy Close is an editor in Transportation Publishing for J.J. Keller and Associates with expertise in transportation security, DOT drug and alcohol testing, driver qualification, and the Compliance, Safety, Accountability enforcement model.