The U.S. Department of Labor has updated its guidance on penalty and debt collection procedures, in its Occupational Safety and Health Administration’s Field Operations Manual in an effort to minimize the burden on small businesses and increase prompt hazard abatement. In announcing the update, Deputy Secretary of Labor Keith Sonderling commented that, “[s]mall 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.”  

The new policy, as outlined in the Penalties and Debt Collection section of the manual, increases penalty reductions for small employers, making it easier for small businesses to invest resources in compliance and hazard abatement. For example, a penalty reduction level of 70%, which was previously only applicable for businesses with 10 or fewer employees, will now be expanded to include businesses who employ up to 25 employees. The revisions also include new guidelines for a 15% penalty reduction for employers who immediately take steps to address or correct a hazard. 

Additionally, the updated policy expands the penalty reduction for employers without a history of serious, willful, repeat, or failure-to-abate OSHA violations. Under OSHA’s revised policy, employers who have never been inspected by federal OSHA or an OSHA State Plan, as well as employers who 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. Penalties issued before July 14, 2025, will remain under the previous penalty structure. Open investigations in which penalties have not yet been issued are covered by the new guidance. 

OSHA retains the right to withhold penalty reductions where penalty adjustments do not advance the goals of the Occupational Safety and Health Act. 

In light of these changes, employers should consider taking the following next steps: 

• Evaluate and Enhance Safety Protocols: Conduct a thorough review of current safety protocols and identify areas for improvement. Implementing enhanced safety measures not only helps in qualifying for the 15% penalty reduction but also ensures a safer working environment. 

• Develop a Comprehensive Training Program: Invest in a comprehensive training program for employees to ensure they are well-informed about safety regulations and recommended best practices. Taking a proactive approach can help in maintaining a clean safety record, making the company eligible for the 20% penalty reduction. 

• Establish a Regular Inspection Schedule: Set up a regular inspection schedule to identify and address potential hazards promptly. This proactive measure can help the company qualify for increased penalty reductions and demonstrate a commitment to maintaining a safe workplace.