Last month, the federal Occupational Safety and Health Administration issued updated guidance on penalty and debt collection procedures. According to OSHA, the policy revisions are intended to assist small businesses with addressing safety violations and to reward companies that immediately correct noted safety compliance issues. Under the previous guidance, employers with 10 or fewer workers were eligible for up to a 70% penalty reduction. OSHA will now apply this penalty reduction to companies with up to 25 employees.
In addition, the agency will apply an additional penalty reduction of up to 15% for employers who take steps to immediately address safety violations noted during an OSHA inspection. These measures are consistent with the Trump administration’s focus on cooperative rather than punitive enforcement of OSHA safety regulations, and incentivizing employers to invest in workplace safety measures rather than spending available budgets on government fines.
The new policy applies to all federal OSHA penalties assessed after July 14, 2025. While state OSHA enforcement programs are not bound by the new penalty calculation formulas, many states may follow the federal government’s lead on moving away from assessment of large penalties, especially for smaller businesses.
Even with these changes, OSHA’s penalty calculation formula allows the agency to ratchet up monetary citations in situations where employers do not cooperate with the investigation, fail to follow through on corrective measures, or display indifference over employee exposure to the risk of death or serious injury. Companies looking to qualify for these penalty reduction options should carefully calibrate their responses to OSHA investigations to allow them to claim qualification for these substantial penalty reductions.
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