On July 14, the U.S. Department of Labor updated its guidance on penalty and debt collection procedures, outlined in the Penalties and Debt Collection section of OSHA’s Field Operations Manual, to help minimize the burden on small businesses and increase prompt hazard abatement. The new policy expands penalty reductions for small employers, making it easier for small businesses to invest resources in compliance and hazard abatement.

As the DOL news release states, “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.”

The new guidance includes:

• A penalty reduction of 70%, previously for businesses of 10 or fewer employees, expanded to include businesses of up to 25.
• New guidelines for a 15% penalty reduction for employers who immediately take steps to address or correct a hazard.
• A penalty reduction of 20% for 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.

The new polices 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.

Read ABC general counsel Littler’s analysis to learn more.