OSHA Reduces Penalties for Small Businesses to Boost Safety and Compliance

On July 14, 2025, the U.S. Department of Labor updated OSHA’s Field Operations Manual to ease penalty and debt collection procedures for small businesses and encourage prompt hazard correction. This update gives more flexibility to small businesses working in good faith to comply with federal safety requirements. 

The revised policy introduces increased penalty reductions for small businesses, broadens eligibility for historically compliant employers and encourages swift hazard abatement to support safer workplaces without imposing undue financial strain. 

Key updates to OSHA’s penalty procedures include: 

• Expanded small business relief: Employers with up to 25 workers are now eligible for a 70% penalty reduction, an option previously limited to those with 10 or fewer employees. 

• Encouraging prompt action: A new 15% penalty reduction is available for employers who take immediate corrective action to address identified hazards. 

• Recognition of compliance history: Employers with no prior serious, willful, repeat or failure-to-abate violations — including those never inspected or last inspected over five years ago without major findings — may now qualify for a 20% reduction. 

This policy update takes effect immediately and applies to open cases where penalties have not yet been issued. Any penalties issued before July 14, 2025, will follow the previous guidelines. While OSHA may withhold penalty reductions that conflict with the goals of the Occupational Safety and Health Act, the Department of Labor’s new approach is designed to encourage compliance while acknowledging the resource constraints small businesses often encounter. These changes are outlined in OSHA’s July 2025 update to its Field Operations Manual. 

For more information, visit OSHA’s updated Field Operations Manual.