OSHA’s New Penalty Reduction Policy

On July 14, 2025, OSHA announced a series of important updates to its penalty reduction policies. These changes are designed to support small businesses, encourage swift hazard correction, and reward the companies that have a strong compliance history. By expanding eligibility for penalty reductions and clarifying how employers can qualify, OSHA is aiming to promote safer workplaces while reducing the financial burden on organizations that act in good faith.

You can read OSHA’s full announcement here.

What’s Changed?

To encourage proactive compliance and recognize good-faith efforts, OSHA has updated its penalty reduction framework with three major adjustments that benefit small employers and those who respond quickly to violations.

First, the definition of a “small employer” has been expanded. Previously, only businesses with 10 or fewer employees could qualify for the maximum 70% penalty reduction. Now, that threshold has increased to 25 or fewer employees, allowing more organizations to benefit from significant penalty relief. This update is especially beneficial for small and family-run businesses that may not have dedicated safety personnel but are committed to maintaining a safe workplace.

Second, OSHA has formalized and expanded its Quick-Fix penalty reduction, which allows employers to receive an additional 15% deduction if they immediately abate a hazard identified during an inspection. To qualify, the abatement must be completed within five business days (or up to 15 days with OSHA approval) and must be permanent and well-documented. This means temporary fixes won’t cut it. Employers need to show that the root of the hazard has been addressed and that supporting documentation (like repair records or photo evidence) is available. This reinforces OSHA’s preference for prompt, responsible action over prolonged disputes and delayed fixes.

Third, OSHA is now offering a Clean History credit of up to 20% for employers with no serious, repeat, or willful violations in the past five years. Or, in some cases, those who haven’t undergone an OSHA inspection at all. This incentivizes companies to maintain long-term compliance and rewards those with a demonstrated commitment to safety.

Combined, these three incentives (small business status, quick abatement, and clean history) can be layered to result in penalty reductions of up to 80–85% for qualifying employers. It’s a move by OSHA to shift enforcement from punitive to preventative, with a greater focus on collaboration and corrective action.

Important Considerations

These updates represent a meaningful shift in OSHA’s approach to enforcement, especially for small businesses with limited resources. That said, these changes do not equal a free pass. OSHA’s authority to issue citations and enforce standards remains fully intact, and penalties will still be applied when warranted.

Employers should also be aware that:

• Quick-fix incentives require quick action. Abatement must be permanent, complete, and well-documented within a tight five-day window, or else you risk losing the reduction.
• Not all states may implement these changes right away. States with their own OSHA-approved plans are not required to adopt these federal-level updates immediately, so applicability may vary.
• Critics are raising concerns. Some safety advocates caution that further reducing penalties could disincentivize employers from fully protecting worker health and safety, potentially undermining compliance with state and federal laws.
• Reduced inspections may limit accountability. While the new approach rewards good behavior, some experts worry that fewer inspections, combined with lighter penalties, may reduce deterrence over time.

Employers facing OSHA citations issued after July 14, 2025 should review their eligibility for these reductions, act quickly, and document thoroughly.

Conclusion

OSHA’s updated guidelines signal a more flexible, collaborative approach to enforcement; one that rewards smaller employers and those who take quick, documented action to protect their workers. For many businesses, this is an opportunity to reinforce safety protocols, build stronger relationships with regulators, and reduce the risk of costly fines.

Now is a great time to revisit your internal safety processes and confirm whether your business might qualify for these expanded reductions. If your company has fewer than 25 employees, a clean history, or the ability to correct hazards immediately during an inspection, these credits could significantly reduce your exposure to costly penalties.

At Walden, we help businesses across industries stay ahead of OSHA compliance by offering tailored safety audits, training programs, and regulatory support. Whether you need to assess eligibility, strengthen your EHS program, implement corrective actions, or prepare for an inspection, Walden can help. Reach out today at 860-846-4069 to speak with one of our EHS experts.