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OSHA Introduces Reduced Penalties for Small Businesses and Quick Fixers

Manufacturing shop owner using her cell phone and looking confidently at camera.

The Occupational Safety and Health Administration (OSHA) is giving small businesses a big break. On July 14, OSHA updated its guidance to reduce penalties for employers with 25 employees or fewer, employers who fix problems fast, and employers with clean OSHA histories.

OSHA Penalty Adjustments Now Available for Small Businesses

As a Texas business owner, understanding how OSHA calculates penalties can help you prepare for inspections and potentially reduce financial exposure when OSHA citations are issued. 

OSHA considers four main factors when adjusting penalties downward from their base amounts:

  1. Size Reduction (Up to 70-80% reduction): The most significant potential reduction is based on your company's maximum number of employees. Small businesses with 25 or fewer employees can receive substantial penalty reductions – up to 70% for serious and other-than-serious violations, and up to 80% for willful-serious violations. Size reductions are available for employers with up to 250 employees.
  2. Good Faith Efforts (Up to 25% reduction): OSHA may reduce penalties by up to 25% if your company demonstrates genuine efforts to maintain workplace safety and comply with OSHA standards. This includes having written safety programs, conducting training, and showing commitment to employee protection.
  3. History (Up to 20% reduction): Companies with clean OSHA records – meaning no previous serious, willful, or failure-to-abate violations – can receive up to a 20% penalty reduction.
  4. Quick-Fix Reduction (Up to a 15% reduction): OSHA's newest penalty reduction program rewards employers who immediately correct violations discovered during inspections. This abatement incentive program encourages rapid hazard correction to prevent employee injuries.

How Penalty Reductions Are Applied

These adjustments are calculated once per employer, not per violation. However, OSHA Area Directors can withhold any of these reductions at their discretion if applying a reduction would not “advance the deterrent goal” of the OSH Act.

Important Limitations on Penalty Reductions

The type of violation significantly affects which reductions apply:

  • Repeated violations: Only size reductions apply
  • Willful violations: Only size and history reductions apply
  • Serious violations classified as high severity/greater probability: Only size and history reductions apply

Understanding the Quick-Fix Program

The Quick-Fix reduction applies to violations that are corrected quickly – either immediately or within 5 days (for more complex fixes) – after discovery by an OSHA officer. This program recognizes that immediate action to protect workers deserves penalty relief.

Quick-Fix Applies To:

  • All employers regardless of size or industry
  • "Other-than-serious," "low-gravity serious," or "moderate-gravity serious" violations
  • Both safety and health violations that can be abated quickly
  • Permanent and substantial corrections (not temporary fixes)

Quick-Fix Does NOT Apply To:

  • High-gravity serious, willful, repeated, or failure-to-abate violations
  • Violations related to fatalities or serious injuries
  • Easily corrected violations that show poor safety management (like turning on available ventilation or directing workers to use readily available hard hats)

When Are OSHA’s New Penalty Reduction Guidelines Effective?

Penalties issued before July 14, 2025 will be calculated under the previous policy.

Any penalties issued July 14, 2025 or later will be calculated under the new policy, even if the investigation was open when the policy changed.

Are OSHA’s Penalty Adjustments Available in My State?

The changes apply to employers in states covered by the federal OSHA guidelines. If a state plan applies to your business, you should check your state’s OSHA-approved plan.

How Do the New OSHA Penalty Guidelines Impact My Business?

Small businesses have the most to gain from OSHA’s new penalty reduction guidelines through preparation and consistent, good-faith safety efforts. Consider these proactive steps to take advantage of OSHA's penalty reduction program:

  • Maintain accurate records of your employee count and document seasonal variations in workforce to support your size reduction eligibility
  • Maintain written safety program with documented training records, safety meetings, and OSHA 300 logs
  • Train employees and supervisors to prioritize safety and immediately address hazards when identified
  • Keep spare parts inventory (machine guards, safety equipment) to easily correct violations due to equipment or PPE hazards; keep basic tools and materials ready for quick repairs

Hendershot Cowart: Your Partner in OSHA Defense and Compliance

The attorneys at Hendershot Cowart P.C. understand OSHA and your small business. If you are currently involved in an OSHA investigation or facing penalties, we can immediately step in to advocate for the best possible outcome for your business – including negotiating all available discounts and penalty reductions.

Call (713) 783-3110 or contact us online to discuss your OSHA matter. We serve employers in all states under federal OSHA jurisdiction, including Texas, Louisiana, Oklahoma, Arkansas, and Colorado.