Small employers will see penalty reductions from the Occupational Safety and Health Administration (OSHA) when they act quickly to correct hazards or have a clean inspection background. Effective July 2025, these changes allow companies with 25 employees or fewer to see benefits from maintaining a dedicated safety program that aligns with OSHA regulations. Below, the Texas labor and employment lawyers from MehaffyWeber explain what you need to know about this update.
Background on the New OSHA Action
Effective July 14, 2025, OSHA updated the Penalties and Debt Collection section of its Field Operations Manual to decrease penalties for employers with fewer than 25 employees. This marks a change that assists a wider range of small businesses, since the previous threshold was 10 workers. Qualifying employers receive a 70% reduction in penalties, opening up greater resources to spend on rectifying identified hazards.
The guidance change also provides a 15% penalty reduction as a reward for companies that act to correct violations immediately after an inspection. In addition, there are decreases based on a clean inspection history and good-faith efforts by an employer. According to the U.S. Small Business Administration’s 2025 Profile for Texas, this could assist over 435,000 small businesses in our state.
Factors That Qualify Your Small Business for New OSHA Penalty Reductions
As a company owner or executive, following OSHA regulations is a critical part of your business’s success plan. Enacting safety protocols, education, and enforcement can be expensive for a small company. The new OSHA guidance strives to reward you for making worker safety a priority, allowing you to direct more funding to maintaining a clean OSHA record.
There are four main factors OSHA can base reductions on:
Company Size
As discussed, the July 2025 changes cut penalties for smaller companies with 25 employees or fewer by up to 70%. However, there are additional reductions of 30% for companies with 26-100 workers, and 10% for those with 101-250 employees. These reductions apply to OSHA penalties for serious and other-than-serious violations, but small businesses may also qualify for an 80% penalty reduction for “willful serious” violations.
Good Faith Actions
If your company demonstrates authentic efforts to adhere to OSHA standards and invest in workplace safety, it could result in a 25% reduction in penalties. These good-faith actions might include conducting training, having written safety plans, posting reminders in appropriate locations, maintaining equipment, and buying new safety gear.
Clean Inspection History
Companies with a 5-year history of no serious, willful, or failure-to-abate violations can receive a 20% reduction in penalties. This benefit also extends to new businesses that have not yet undergone review by either federal or state inspections.
Quick-Fix Reduction
The Quick-Fix Program has been in effect since 1996, providing a 15% reduction in penalties when an employer immediately repairs or fixes a problem that is identified during a federal inspection. To qualify, the company must make the change within 5 calendar days, and it must be a permanent correction, not temporary. Quick-Fix reductions do not apply for high gravity serious, willful, repeated, or failure-to-abate violations.
How These Changes Will Apply to Texas Employers
First, these new reductions only apply to violations recorded after July 14, 2025. If you are facing penalties for inspection issues before that date, these changes will not limit your potential fines. You should also be aware that the new reductions are calculated per company, not per violation.
OSHA has also instituted limitations for certain situations, including:
- If your company has a history of repeated violations, you may only qualify for a reduction based on company size.
- If you have willful violations, OSHA may only apply history and size reductions.
- If you have severe or high-gravity violations that could result in serious injury or death to employees, you may only receive size and history reductions.
Also, the penalty reductions are not automatic. The relevant OSHA Area Director in Texas may deny a reduction if they determine that issuing a reduction would not support OSHA’s main goal of deterring violations and promoting a safety culture.
Actions Your Company Can Take to Benefit From the New OSHA Penalty Reductions
The OSHA penalty changes are intended to incentivize small businesses to focus on workplace safety proactively. By taking time to build a safety program and include it in all department management efforts, you can reduce the number of worker injuries. The secondary result is a lowered risk of violations and fines.
Here are actions we recommend to take advantage of the new reductions:
- Work with agencies, such as Texas’s Occupational Safety and Health Consultation Program (OSHCON), to analyze and improve your existing safety programs.
- Perform regular employee headcounts, including fluctuations from seasonal workers, to support your eligibility for a size penalty reduction.
- “Walk the talk” by encouraging safety consciousness and coaching in your executive, managerial, and supervisory staff members.
- Maintain your tool and repair parts inventory to address problems immediately during inspection to qualify for the Quick-Fix Program reductions.
- Collaborate with a Texas labor and employment law firm to further assess your safety and worker programs and identify potential issues.
Overall, the OSHA penalty changes are beneficial for Texas companies, encouraging compliance without negatively impacting your ability to make necessary expenditures to address problems. Without paying exorbitant fines, you have more capital available to make substantial investments in reducing workplace hazards and promoting a powerful safety culture.
Contact MehaffyWeber to Discuss OSHA Compliance
When you run a business, you need experienced and knowledgeable professionals to help you grow and succeed. At MehaffyWeber, we pride ourselves on offering qualified guidance to companies, both small and large, helping them achieve their goals and comply with necessary regulations.
We manage all aspects of commercial litigation, contract disputes, environmental law, insurance defense, and professional liability cases. We have represented business clients like you since 1946. To discuss your business’s OSHA concerns and move forward with a well-designed plan, arrange a consultation today with our Texas labor and employment lawyers.