The Department of Labor (DOL) has announced plans to make it easier for small businesses to reduce fines they may incur for violating workplace safety regulations.
What’s changed. More small businesses will be eligible to receive a 70% penalty reduction from the Occupational Safety and Health Administration (OSHA) when they “invest resources in compliance and hazard abatement,” according to a DOL press release.
This reduction was previously available to employers with 10 or fewer employees. It now applies to businesses with up to 25 workers.
Employers that act immediately “to address or correct a hazard” may be eligible for a 15% penalty reduction, according to new guidelines published in OSHA’s field operations manual.
The DOL is also easing penalties for businesses without a significant history of OSHA inspections. Employers that have been inspected by a federal or state OSHA plan in the last five years, but have “had no serious, willful, or failure-to-abate violations,” can apply for a 20% penalty reduction. Those that have never been inspected are also eligible for this reduction.
“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,” Deputya of Labor Secretary Keith Sonderling said in a statement. The idea behind lowering penalties for some employers, he added, is to help drive the economy while holding business owners accountable for ensuring worker safety.
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What this means for HR. Employers facing OSHA fines issued after July 14 may now seek out these additional reduced penalties.
HR teams should note, though, that states with their own OSHA plans may opt not to implement these changes being taken at the federal level right away, according to attorneys with Fisher Phillips.
The policy change comes as the Trump administration is proposing to slash OSHA’s budget by 8% in fiscal year 2026, and have the agency perform nearly 10,000 fewer worksite inspections compared to FY2023.
Some workplace and safety experts expressed concerns that further reducing OSHA penalties will disincentivize employers from protecting the health and safety of their workers in accordance with state and federal laws.
Already, some businesses have proven adept at navigating the penalty reduction system: A 2023 investigation by the Boston CBS News affiliate found that many Massachusetts-based companies cited for worker deaths received penalty reductions. Meanwhile, Seattle-based Cascade PBS reported that more than one-third of health and safety penalties issued in Washington state were lowered after businesses appealed them.