OSH Act Penalty Reductions Expanded to Support Small Businesses
The Occupational Health and Safety Administration has issued updated guidance on the penalty structure in Section 7 of the Occupational Safety and Health (OSH) Act. The OSH Act was signed into law in 1970 to ensure safe and healthful working conditions for employees in the United States. In addition to setting workplace safety and health standards, it established the Occupational Health and Safety Administration (OSHA). OSHA is authorized to enforce compliance with the OSH Act and can issue penalties for violations.
The penalties imposed by OSHA are intended to deter future violations and ensure that employers maintain a safe and healthful working environment. To ease the burden on small businesses and to promote the swift resolution of workplace hazards, OSHA has previously applied a 70% reduction in penalties for very small businesses with 10 or fewer employees.
The new policy, detailed in the Penalties and Debt Collection section of OSHA’s Field Operations Manual, expands the penalty reductions for small employers to include businesses that employ up to 25 employees. The aim is to make it easier for small businesses to invest in resources for hazard abatement and ensure future compliance. The new policy includes a 15% penalty reduction for employers who take immediate steps to address or correct a hazard, and expands the penalty reduction for employers without a history of serious, willful, repeat, or failure-to-abate OSH Act violations. Employers will be eligible for a 20% penalty reduction if they have never had an inspection by a federal OSHA or OSHA State Plan, or if they have had an inspection in the past 5 years that uncovered no serious, willful, or failure-to-abate violations.
The new policy was adopted with immediate effect on July 14, 2025, and covers inspections initiated prior to that date that have not yet resulted in a penalty. The previous penalty structure will apply to any penalties imposed prior to that date. It should be noted that OSHA retains the right to withhold penalty reductions when they do not advance the goals of the OSH Act.
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“All employers should be offered the opportunity to comply with regulations that help maintain a safe working environment,” said Deputy Secretary of Labor Keith Sonderling. “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. 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.”
