On July 14, 2025, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) expanded penalty reductions for small businesses, companies who fix workplace hazards expediently, and employers with good safety records. While OSHA stressed that it would continue to hold employers accountable for unsafe work conditions, the policy updates – outlined in Chapter 6 of OSHA’s Field Operations Manual – certainly signal a pro-employer shift by the agency.
Penalty Reductions for Small Businesses
Aimed in part at reducing burdens on small businesses, the updated policy expanded eligibility for penalty reductions to more companies. Notably, employers with 25 or fewer employees are now eligible for a 70% penalty reduction; this threshold was increased from 10 or fewer employees. “Small employers who are working in good faith to comply with complex federal laws should not face the same penalties as large employers with abundant resources,” Deputy Secretary of Labor Keith Sonderling said in a statement announcing the policy updates. “By lowering penalties on small employers, we are supporting the entrepreneurs that drive our economy and giving them the tools they need to keep our workers safe and healthy on the job while keeping them accountable.”
Incentive to Correct Hazards Quickly
The agency also sought to promote prompt hazard abatement by incentivizing employers with a new “quick-fix” credit. Employers can now earn a 15% reduction in penalties by correcting a hazard within five days of discovery (and protecting employees from exposure to the hazard during that time span). Employers who require more than five days to fix the hazard can be awarded up to 10 additional days, but they must notify their OSHA Compliance Safety and Health Officer within the first five days to explain their corrective action and why they need the additional time. Abatements that takes longer than 15 days will not be eligible for the 15% reduction.
Penalty Reductions for Companies with a Clean Record
The updated policy expands penalty reductions to employers with no history of serious, willful, repeat, or failure-to-abate OSHA violations. Employers can earn a 20% penalty reduction if they have:
- Been inspected by federal OSHA or a State Plan within the past five years and were found to be in compliance or were cited only for other-than-serious violations; or
- Never been inspected by OSHA or a State Plan.
Policy Updates Are Effective Immediately
The updated policy took immediate effect on July 14, 2025 and applies to penalties issued from that point on. Any penalties issued before that date remain under the previous penalty structure. If an investigation was opened before July 14, but penalties were not issued until after that date, the new guidance applies.
Note that the penalty reductions can be combined, with an employer potentially earning all three reductions for a single penalty, where applicable.
The OSHA lawyers at Pappas Grubbs Price PC assist employers with the complex OSHA compliance process and help clients assert their rights throughout the OSHA inspection process. With offices in Houston, Dallas, Austin, and San Antonio, our OSHA defense lawyers have successfully represented hundreds of clients in OSHA investigations and litigation, and we are able to perform 24/7 rapid response on-site coordination with our clients, often arriving before the OSHA inspector. For assistance with your OSHA matter, contact Pappas Grubbs Price.
