OSHA Lowers Penalties for Small Businesses to Ease Compliance Burdens and Promote Hazard Abatement

The Occupational Safety and Health Administration (OSHA) has updated guidance in its Occupational Safety and Field Operations Manual. The adjusted guidance  reduces non-compliance penalties for small business while encouraging investments in hazard abatement.  

Under the new guidance for small businesses: 

• Penalties for non-compliance with certain standards apply to companies with up to 25 employees rather than those with 10 or more employees. 
• Penalty reductions of up to 70% apply to certain types of citations. 
• A 15% penalty reduction applies to small companies that immediately take steps to address or correct a workplace occupational health and safety hazard. 
• Employers who have never been inspected by federal OSHA or an OSHA State Plan, and companies that have been inspected in the previous five years and had no serious, willful, or failure-to-abate violations, are eligible for a 20% penalty reduction. 

The new policies are effective immediately. Citations issued before July 14, 2025, remain under the previous penalty structure. Open investigations in which penalties have not yet been issued are covered by the new guidance. 

Why This Matters for Employers 

• Reduced Financial Pressure: Smaller workplaces have the opportunity to reallocate resources for hazard reduction instead of penalties. 
• Encourages Compliance: A less punitive approach is expected to increase employer willingness to engage proactively with OSHA to improve workplace safety. 
• Risk Remains: Penalty reductions are only available to businesses operating in good faith and committing to immediate corrective action. 

Efforts to ease regulatory burdens for small businesses are part of a broader U.S. Department of Labor shift toward what it refers to as flexible enforcement paired with accountability to balance regulatory costs with safety expectancies. 

What Employers Should Do Now 

• Maintain Compliance Focus: Penalty relief doesn’t excuse unsafe conditions — compliance is still non-negotiable. 
• Prioritize Early Abatement: OSHA incentive structures favor quick hazard fixes over drawn-out dispute processes. 
• Reassess Penalty Risks: Understand how these changes affect liability thresholds and budget planning. 
• Invest wisely: Take steps to invest in safety infrastructure proactively rather than reactively. 

How WorkCare Can Help 

Our incident prevention and ergonomic consulting teams help smaller companies with limited resources by: 

• Identifying high-risk conditions before inspections occur 
• Structuring corrective actions that satisfy OSHA’s good-faith requirements 
• Designing compliance programs that provide defensibility and workforce health value 

Interested in how this shift affects your risk profile? Let’s talk strategy.