OSHA Exceptions for Small Businesses

OSHA, the Occupational Safety & Health Administration, is a federal agency with over two thousand inspectors who are responsible for enforcing the standards that improve workplace safety and health for employees all across the United States. Since 1970, OSHA has been instrumental in reducing occupational fatalities and on-the-job injuries and illnesses by almost 50 percent. Its mission remains the same as it was the day it was created: to make sure that the safety and health concerns of all American workers are being met.

OSHA offers many resources designed specifically for smaller employers. The agency wants to encourage all businesses to establish safety and health programs and to find and fix hazards to prevent workplace injuries and illnesses.

For small business owners, OSHA offers a free consultation service that includes help in identifying workplace hazards and establishing or improving safety and health management systems companywide. It also offers many services designed to help small businesses cope with OSHA rules and regulations.

There are exceptions to the OSHA regulations for some small businesses. For example, there is a partial exemption for employers with 10 or fewer employees. Small businesses of that size do not have to keep OSHA injury and illness records unless OSHA or the Bureau of Labor Statistics (BLS) informs them in writing that they must keep records.

In addition to small businesses with less than 10 employees, businesses in certain industries are also exempt from OSHA’s regulations. If your business establishment is classified in a specific low-hazard retail, service, finance, insurance, or real estate industry, you do not need to keep OSHA injury and illness records unless the government asks you to. However, all employers must report to OSHA any workplace incident that results in a fatality or the hospitalization of three or more employees.

Business establishments classified in agriculture; mining; construction; manufacturing; transportation; communication, electric, gas, and sanitary services; or wholesale trade are not eligible for the partial industry classification exemption.

OSHA considers the size of the employer, among other factors, when determining the penalty to be proposed for any violation. The agency has always had detailed procedures in place for making this determination; they are currently embodied in Chapter IV of the Field Inspection Reference Manual (FIRM; OSHA Instruction CPL 2.103), which is conveyed to and followed by all compliance staff.

The FIRM provides that proposed penalties will be reduced by the following percentages in considering employer size:

• a 60 percent penalty reduction may be applied if an employer has 25 employees or fewer
• 40 percent if the employer has 26-100 employees
• 20 percent if the employer has 101-250 employees