OSHA Expands Small Business Eligibility for Penalty Reductions
OSHA has issued updated enforcement guidance aimed at easing compliance burdens for small and mid-sized businesses, and the changes may benefit ILMA members.
OSHA’s Field Operations Manual (FOM) now includes new procedures for how penalties are assessed and collected. The revisions expand eligibility for penalty reductions and reward prompt hazard abatement, aligning with OSHA’s stated goal of improving workplace safety while minimizing the financial impact on smaller operations.
Key Updates
- Employers with 25 or fewer employees may now qualify for a 70% penalty reduction, a significant increase from the previous threshold of 10 employees.
- A 15% penalty reduction will be available to employers who take immediate corrective action to fix the identified hazard.
- A 20% penalty reduction is available to employers never before inspected by federal OSHA or a state plan and employers inspected in the past five years without receiving any serious, willful or failure-to-abate violations.
These updated penalty policies apply immediately to all new inspections and open investigations where penalties have not yet been issued. The policy does not apply to penalties issued before July 14, 2025.
Key Takeaways
Lubricant manufacturers with fewer than 25 employees or a clean OSHA inspection history may benefit from significant reductions in penalties, especially if they take immediate steps to correct violations. Members should consult with their safety managers or legal counsel to determine eligibility under the new policy.
Overall, this is another indication that occupational safety regulation may increasingly incorporate mechanisms for regulatory relief for good-faith actors, particularly small businesses. In the announcement, Deputy Secretary of Labor Keith Sonderling stated:
All employers should be offered the opportunity to comply with regulations that help maintain a safe working environment. 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. By lowering penalties on small employers, we are supporting the entrepreneurs that drive our economy and giving them the tools they need to keep our workers safe and healthy on the job while keeping them accountable.
For more information on OSHA’s updated policy, visit the Penalties and Debt Collection Policy. For more information or to discuss how this change may affect your operations, please contact ILMA General Counsel at jleiter@bmalaw.net or ILMA Regulatory Counsel at jroman@bmalaw.net.