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On July 14th, 2025, the U.S. Department of Labor (DOL) updated its guidance on penalty and debt collection procedures. Specifically, this update was made to the Occupational Safety and Health Administration’s (OSHA’s) Field Operations Manual (FOM). According to the agency, these new procedures will minimize the burden on small businesses and increase quick hazard abatement. Indeed, all employers should be aware of common workplace hazards and know how to address them. Previously, in June, OSHA issued updated guidance on site-specific targeting inspections.
Overview of the Penalties and Debt Collection Policy
In general, the new policy reduces penalties for small employers. Consequently, according to OSHA, this makes it easier for small businesses to invest resources in compliance and hazard abatement. For example, previously, businesses with 10 or fewer employees were eligible for a 70% penalty reduction, provided that all identified hazards were removed or corrected. This reduction will now be expanded to include businesses that employ up to 25 employees. Additionally, the revisions to the penalties and debt collection policy also include new guidelines for a 15% penalty reduction. Chiefly, this is available for employers who immediately take steps to address or correct a hazard.
Furthermore, the update expands the penalty reduction for employers without a history of serious, willful, repeat, or failure-to-abate OSHA violations. Under OSHA’s revised policy, employers are eligible for a 20% penalty reduction if they fall under any of the following categories:
- never been inspected by federal OSHA
- never been inspected by an OSHA State Plan
- have been inspected in the previous five years and had no serious, willful, or failure-to-abate violations
Markedly, the new policies took effect immediately. Penalties issued before July 14th, 2025, will remain under the previous penalty structure. Given that, any open investigations in which penalties have not yet been issued are covered by the new guidance.
Quote from OSHA on the Updated Penalties and Debt Collection Policy
“All employers should be offered the opportunity to comply with regulations that help maintain a safe working environment,” said Deputy Secretary of Labor Keith Sonderling. “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.”
Employer Takeaways
In conclusion, all small businesses with 25 or fewer employees should take note of the updated guidance. With the expansion of employee size for possible penalty reduction, more companies can take advantage of it when all hazards are fixed. Significantly, however, under OSHA’s General Duty Clause, all employers need to provide a workplace to workers that is free from hazards or harm. Hazards should not exist, period! The new guidance, however, does offer some leniency to smaller businesses, which will hopefully take advantage and address any issues that arise. Be that as it may, OSHA hopes that once those issues are corrected, they should never exist again.
