| The U.S. Department of Labor just overhauled OSHA’s penalty guidelines to give small employers and safety-conscious businesses a financial break. Effective immediately, the new policy: -significantly increases penalty reductions for small businesses -offers new incentives for employers who quickly fix hazards -rewards companies with clean safety records However, the agency still made clear in Monday’s announcement that it will maintain enforcement authority and hold employers accountable if they maintain unsafe work conditions. The new policy applies only to penalties issued on or after July 14, 2025. What Changed The new policy, issued July 14, updates Chapter 6 of OSHA’s Field Operations Manual (“Penalties and Debt Collection”) and includes three major penalty reduction opportunities: –Small Business Relief Employers with 25 or fewer employees are now eligible for a 70% penalty reduction (up from the previous cap of 10 employees). –Quick Hazard Correction Incentive A new 15% reduction is available for employers that immediately fix a hazard identified during an inspection. –Clean History Credit Employers are now eligible for a 20% reduction if: -They’ve never been inspected by OSHA or a state OSHA plan; or -They’ve been inspected in the past five years but had no serious, willful, repeat, or failure-to-abate violations. These reductions can be combined, meaning small, proactive, and historically compliant employers could see penalties reduced by over 80% in some cases. Red Flag Tips 5 Steps Employers Should Consider Now *Reassess workforce size regularly. Confirm whether your business qualifies for the ≤25 employee threshold. This count may fluctuate throughout the year, so monitor staffing closely. *Create a “quick fix” response plan. Train supervisors to act fast on any hazard identified by OSHA or internal audits. Immediate abatement must be clearly documented to qualify for the 15% reduction. *Review inspection history. If your business has avoided OSHA violations over the past five years, or has never been inspected, you could be entitled to a 20% discount. Prepare documentation as necessary to prove your compliance. *Strengthen compliance systems. Use this as an opportunity to refresh workplace safety protocols, enhance training, and document hazard mitigation efforts. Compliance has never before been so valuable. *Prepare to negotiate. If facing an OSHA citation, work with your FP Workplace Safety counsel to leverage your eligibility for reductions, especially if you’re correcting hazards proactively and operating in good faith. Key Final Points State plan adoption may vary. Not all states will implement these changes immediately. Employers in state-plan jurisdictions should check for localized guidance or timelines. Discretion still matters. OSHA can deny reductions in egregious or repeat violation cases. You will want to maintain clear records to show good-faith efforts and a culture of safety. HR NETwork now has a safety consultant to assist with and provide safety services to our clients. If you need a referral to our safety consultant or want more information about this Alert, please reach out to your HR Business Partner. |
HR Alert: OSHA Slashes Penalties for Small Employers – How You May Benefit
07/25/2025
By: HR NETwork Inc
