OSHA’s New Small Business Penalty Playbook
What July’s Update Means for Roofing Contractors
by Trent Cotney, Partner, Adams & Reese, LLP
(Editor’s Note: Trent Cotney, partner at Adams & Reese, LLP, is dedicated to representing the roofing and construction industries. Cotney is General Counsel for the Western States Roofing Contractors Association and several other industry associations. For more information, contact Cotney at (866) 303-5868 or go to www.adamsandreese.com.)
Small businesses got some unexpected relief on July 14 when the Occupational Safety and Health Association (OSHA) quietly rewrote the penalty chapter of its Field Operations Manual and issued a companion press release. The changes don’t lower the statutory maximums, those are still $16,550 per serious item and $165,514 for willful or repeat violations, but they do expand and sweeten the discounts small employers can claim if they run into trouble during an inspection.
For three decades OSHA granted its deepest size reduction, 70%, to companies with ten or fewer employees. That threshold has leapt to 25 employees. If you have even one day in the past year when the firm’s combined headcount hit 26, you lose the benefit, but anyone beneath that line starts every penalty calculation at roughly one-third of face value. The agency’s own data shows that many construction citations in 2024 were issued to firms in the 11 to 25 employee band and those companies are now eligible for tens of millions of dollars in aggregate relief.
OSHA has also formalized a new Quick-Fix incentive. If the compliance officer observes a hazard that can be corrected on the spot or within five calendar days, extendable to 15 in complex cases, you can shave an extra 15% off the proposed penalty. Think loose guardrails, untagged extinguishers, or unprotected skylight openings: fix it, show photographic proof or a receipt, and watch the numbers drop.
The revision revives a carrot that many inspectors forgot existed: a 25% good-faith reduction for employers that can demonstrate an effective safety and health management system. OSHA explicitly states that the program need not be a glossy ISO-45001 binder; field-training records, documented daily huddles, and near-miss logs will do. Roofing contractors who already maintain Toolbox Talks or use mobile apps, such as the Western States Roofing Contractors Association’s safety app, have most of the paperwork in hand; they simply need to present it before the closing conference.
A fourth discount rewards shops that either have never been inspected or have gone five years without a serious, willful, or failure-to-abate citation. Those employers automatically receive a 20% penalty reduction unless the area director overrides it for cause. For companies that fall just outside the twenty-five-employee cutoff, combining the good-faith and history reductions can still chop a serious citation’s cost by nearly half.
The July update did not loosen OSHA’s multipliers for repeat or willful violations: those remain five and ten times the gravity-based penalty, respectively. Small employers can also not invoke good-faith credits on willful, repeat, failure-to-abate, or high-gravity serious items. In other words, the new policy is a lifeline for first-time or low-gravity mistakes, not a shield against chronic non-compliance. Roofers cited for a third fall-protection offense, for example, will still feel the full penalty sting.
Recognizing that even a reduced fine can strain cash flow, Area Directors are encouraged to offer installment agreements and no longer require Washington approval for routine schedules, though complex plans may still need higher sign off.
First, audit your head-count records. Count every employee, full-time, part-time, and temporary, on the highest-employment day in the past 12 months. If the total is 25 employees or less, document it; that snapshot is your ticket to the 70% size reduction. Second, document quick fixes. Equip foremen with smartphone checklists so they can send time-stamped photos of corrected hazards before the compliance officer leaves the site. Third, refresh your safety program binder. Include signed orientation sheets, weekly toolbox agendas, and any third-party training certificates to maximize the good-faith credit. Fourth, pull a five-year inspection history. If your company has a serious violation within that window, the 20% history reduction disappears. Fifth, schedule an informal conference early. Penalty reductions are discretionary until the final order; the sooner you discuss eligibility, the better.
Remember, Cal/OSHA and the other state-plan programs must adopt provisions at least as effective as the federal rule but are not bound to carbon-copy it and can be more restrictive.
OSHA’s July 2025 update signals a pragmatic shift, which reserves full fines for bad actors, gives smaller contractors financial breathing room to fix hazards, and rewards companies that build real safety systems. Roofing companies that invest a few hours in documentation and quick repairs can now cut potential penalties by half or more without sacrificing accountability. Spend the time and your balance sheet will thank you.
