OSHA Increases Eligibility for Reduced Fines
To help encourage smaller companies to comply with regulations and invest resources into compliance and abatement, OSHA and the U.S.
To help encourage smaller companies to comply with regulations and invest resources into compliance and abatement, OSHA and the U.S. Department of Labor made some updates to their penalty reduction eligibilities.
⚡ TL;DR: Effective July 14, 2025, OSHA expanded penalty reduction eligibility: companies with 25 or fewer employees now qualify for 70% reductions (previously only 10 or fewer), companies with 26–100 employees can get 30% reductions, and 101–250 employee companies can get 10% reductions. Additional 15–20% reductions are available for immediate corrective action, first-time inspected facilities, or clean compliance history. These changes apply only to violations found after July 14, 2025.
New OSHA Penalty Reduction Guidelines
25 or Fewer Employees – The main change has been to add companies of 25 or fewer employees to eligibility for a 70% reduction in penalties. Until now, the reduction was only available to companies of 10 or fewer.
26-100 Employees – If your company has 26-100 employees you may be eligible for a 30% reduction.
101-250 Employees – Companies with 101-250 employees may be eligible for a 10% reduction.
Immediate Action – If you take immediate action to correct a hazard, you may be eligible for a 15% reduction in penalties.
Newly Inspected Companies – If your company has never been inspected by federal OSHA or a state OSHA agency you will be eligible for a 20% reduction in penalties.
Historical Compliance – If your company has not had a serious, willful or failure-to-abate violation within the past 5 years, you will also be eligible for a 20% reduction.
⚠️ The Pain Frame: All changes in reduction criteria apply only to violations found after July 14, 2025. Companies cited before this date receive no retroactive reduction benefit. More importantly: the expanded reductions only apply if your company qualifies. Facilities in the Severe Violator Enforcement Program, companies with fatality-related citations, or operations with egregious violations receive zero reductions regardless of size. Even with the expansion, a company in the SVEP facing a $165,514 willful violation for machine guarding pays the full amount with no discount.
When Reductions May Not Be Available
In their press release, OSHA said they still have the right to withhold reductions if they don’t advance the goals of OSHA. According to the OSHA Field Operations Manual, the following instances may NOT be eligible for a penalty reduction:
The citation is related to a fatality or a catastrophe; The violation is considered egregious or novel; Your company has received a willful or repeat violation within the past 5 years related to a fatality; Your company has failed to follow the reporting requirements for a fatality, inpatient hospitalization, amputation or loss of an eye; Your company is either in the Severe Violator Enforcement Program, or the citation meets the requirements for inclusion in the program; Your company has numerous recordkeeping violations related to a large number or rate of injuries and illnesses; The proposed failure to abate notification is based on a previous citation and the employer failed to submit abatement verification for that; Your company has not paid past OSHA penalties to the point it was referred to debt collection; or Your company has not responded to previously issued citations.
For more information on how OSHA handles inspections and citations, you can consult the OSHA Field Operations Manual.
Understanding the boundaries: The expanded penalty reductions are valuable for companies that are actively correcting hazards and maintaining good compliance history. But they create a perverse incentive — some facilities view reductions as a substitute for prevention, assuming “We’ll just take the reduction if we get cited.” This is expensive strategy. A company with 50 employees facing a $16,550 serious violation receives a 30% reduction under the new rule = $11,585 cost. Repeat this across multiple violations and you’re at $35,000–$50,000+ in settlement. Build a compliant program now, and the inspection cost is zero. Many facilities assume they can afford the penalty; few realize that one inspection triggers audit scrutiny of all similar hazards, resulting in multiple citations.
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Frequently Asked Questions
Q: Does my company with 50 employees qualify for the 30% penalty reduction if we are cited?
A: Yes, if the violation was found after July 14, 2025, you qualify for a 30% reduction if you meet the criteria. But note: the reduction is discretionary. OSHA can withhold reductions if the violation involves fatalities, is egregious, or if your company is in the Severe Violator Enforcement Program. Also, the 30% reduction only applies to the specific violation cited — not to failure-to-abate penalties if you miss the correction deadline. A company facing a $16,550 serious violation would pay approximately $11,585 after the 30% reduction, not the full amount.
Q: Can I combine multiple penalty reductions (size + immediate action + clean history)?
A: The reductions stack in some cases, but not all. The size-based reduction (70%, 30%, or 10%) applies as the base. Additional reductions for immediate action (15%) or clean history (20%) may apply in addition, but OSHA documentation must be consulted for specific stacking rules. The safest approach is to work with your compliance team to understand the actual penalty exposure in your facility’s specific situation.
Q: If our company has never been inspected, do we automatically get a 20% reduction on future citations?
A: You qualify for the 20% reduction on violations found after July 14, 2025, provided the violations don’t fall into the exclusion categories (fatalities, egregious violations, SVEP membership, etc.). However, never being inspected is not a defense against compliance obligations. Many “new to OSHA” companies discover they have significant violations during first inspections. The reduction helps with the penalty, but the corrective action requirement still applies.
💰 Dollar Anchor: A typical manufacturing facility with 75 employees facing three serious violations (machine guarding, fall protection, and recordkeeping) would settle at approximately $50,000–$70,000 without reductions. With the 30% small company reduction, that same case costs $35,000–$49,000. However, a compliant facility with a robust hazard management program faces zero violations and zero penalties — the actual cost difference between prevention and reactive compliance is $35,000+. Prevention is always cheaper than paying for reductions.
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Frequently Asked Questions
Q: What are the new OSHA penalty reduction eligibilities for small companies?
OSHA expanded penalty reduction eligibility effective July 14, 2025. Companies with 25 or fewer employees are now eligible for a 70% penalty reduction (previously limited to 10 or fewer). Companies with 26-100 employees may receive 30% reductions, and companies with 101-250 employees may receive 10% reductions. Additional reductions of 15-20% are available for immediate corrective action, first-time inspected companies, or those with no serious violations in the past 5 years.
Q: What actions can earn additional OSHA penalty reductions?
Companies can earn additional reductions through: (1) taking immediate action to correct hazards (15% reduction), (2) never having been inspected by federal or state OSHA (20% reduction), and (3) maintaining clean compliance history with no serious, willful, or failure-to-abate violations within the past 5 years (20% reduction). These reductions encourage small businesses to invest in compliance and rapid hazard correction.
Q: When will OSHA not grant penalty reductions?
OSHA may withhold penalty reductions for citations involving fatalities or catastrophes, egregious or novel violations, willful or repeat violations related to fatalities, failure to report occupational injuries, membership in OSHA’s Severe Violator Enforcement Program, numerous recordkeeping violations, failure to submit abatement verification, unpaid past penalties, or failure to respond to previous citations.
Q: What is the OSHA Severe Violator Enforcement Program and how does it affect penalty reductions?
The OSHA Severe Violator Enforcement Program targets employers with histories of serious violations or willful violations. Companies in this program are ineligible for penalty reductions. Employers can avoid or exit this program by achieving strong safety compliance records, maintaining effective safety management systems, and demonstrating commitment to workplace hazard elimination across their operations.
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