OSHA Penalty Reduction: Informal Conference, Good Faith Credit, and Contesting Citations

Most employers who receive an OSHA citation focus on the wrong number. They look at the total penalty and assume it’s fixed. It’s not. OSHA’s penalty system is built with multiple reduction mechanisms, and knowing how to use them can cut a proposed penalty significantly before a single contested hearing takes place.

The penalty on your citation is a starting point, not a final judgment. What you do in the 15 working days after receipt determines how much of it you’ll actually pay.

How the Penalty Calculation Works

OSHA starts with the statutory maximum for each violation type. For serious violations, that number is $16,550 per instance as of 2024. OSHA adjusts this figure annually for inflation, so verify the current maximum at OSHA.gov each year.

From there, the area director applies a gravity-based reduction. Gravity has two components: severity and probability.

Severity measures how bad the injury could be if the hazard causes an incident. A fall from 40 feet is high severity. A tripping hazard on a flat surface is low severity.

Probability measures how likely the hazard is to cause an injury at all. High probability means the hazard is regularly encountered, workers don’t have protective equipment, and the environment makes an incident likely. Low probability means the exposure is rare, controls are partially in place, or the hazard requires a specific chain of events to produce harm.

High severity plus high probability gets a penalty close to the statutory maximum. Low severity plus low probability can be reduced up to 80% before any other adjustments apply. The area director documents this combination in the citation file, and you can challenge it at the informal conference.

After gravity, three adjustments apply: good faith, employer size, and history.

Good Faith Credit

Good faith credit can reduce the gravity-based penalty by up to 25%. It’s one of the most underused reduction mechanisms, mostly because employers don’t know what it actually requires.

OSHA isn’t looking for a safety poster on the wall and a written policy statement. The credit goes to employers who have a functioning safety program with real documentation behind it. The program has to show management commitment (attendance at safety meetings, a written safety mission statement with signatures), a working hazard identification process (regular inspections with documented findings), employee training records, and evidence that identified hazards get corrected.

If you had none of that before the inspection, you don’t get the credit. If you had a written program but couldn’t produce records showing you actually ran it, expect a partial credit at best.

The good faith credit is calculated before the informal conference reduction. That means maximizing it before you walk into the conference is worth more than trying to negotiate the same ground twice.

Build the documentation now, before any inspection. Completed inspection forms, dated training sign-in sheets, corrective action logs with close-out dates. These records are what justify the credit, and they need to predate the inspection to be credible.

Size Adjustments for Small Employers

OSHA’s size adjustment is automatic and applies to employers with 250 or fewer workers. The tiers are:

• 1-25 employees: 70% reduction
• 26-100 employees: 60% reduction
• 101-250 employees: 30% reduction
• Over 250 employees: no size reduction

These percentages apply after the gravity calculation. A serious violation with a gravity-reduced penalty of $10,000 becomes $3,000 for a 26-100 employee company before good faith and history adjustments are even applied.

The size adjustment is applied to the total number of employees in the entire organization, not just the worksite. If your company has 400 employees across three locations but the inspected site had 20 workers, OSHA counts all 400. If a subsidiary is a separate legal entity, get legal clarity on which employee count governs.

Confirm the area director is using your actual employee count. Mistakes happen, and an inflated count costs you real money.

History Adjustments

OSHA looks at your inspection history over the past three years. A clean record with no previous citations gets you a 10% reduction. Prior serious, willful, or repeat violations in that window increase your penalty by 10%.

The 10% history discount is modest compared to gravity and size. But it stacks with everything else, and losing it because of a prior citation you could have settled or contested is worth thinking about.

History adjustments also feed into the repeat violation classification. A violation is “repeat” if OSHA cited you for the same or substantially similar condition within the past five years. Repeat violations carry a maximum penalty of $165,514 per instance, ten times the serious violation maximum. That classification is worth fighting at the informal conference if the prior citation involved different conditions, a different standard, or a different worksite.

The Informal Conference

The informal conference is the single most effective penalty reduction tool available to employers, and most people don’t understand how powerful it is.

Here’s how it works. After receiving citations and proposed penalties, you have 15 working days to request an informal conference with the area director. This deadline runs from the date you receive the citation, not the date it was issued. Send the request in writing, and do it early. Conferences typically happen 5-10 days before the 15-day deadline for contesting, so requesting one on day 14 leaves you no room.

At the conference, you sit down with the area director or a compliance officer and discuss the citations. You can challenge:

• Whether the violation actually existed
• Whether OSHA applied the right standard
• Whether the severity and probability assessments were accurate
• Whether your abatement speed and quality reduce the exposure going forward

The area director has full authority to reduce penalties, reclassify violations, and withdraw citations entirely without going to the Occupational Safety and Health Review Commission. This is not an appeals process. It’s a negotiation, and OSHA area directors use it to resolve cases efficiently.

Bring documentation. Photos showing the condition before and after abatement. Training records. Inspection logs. Maintenance schedules. Anything that changes the gravity picture or supports your version of what actually existed.

Don’t go in adversarial. The conference works because OSHA wants to close cases. Showing up with a cooperative, documented abatement story gives the area director what they need to reduce the penalty. Showing up with accusations of bad faith from the inspector kills that dynamic.

Abatement Documentation and Why Speed Helps

Moving fast on abatement doesn’t just make the workplace safer. It directly influences what happens at the informal conference.

An employer who corrects the cited condition within 48 hours and brings photos, a corrective action report, and updated procedures to the conference is telling a different story than one who shows up with a plan to abate someday. Area directors notice. Fast, thorough abatement is evidence that the violation was an anomaly, not a pattern.

Document the correction in writing. Date it. Include photos of the before and after condition. Note who did the work and what procedure they followed. If you updated your safety program, bring the revised document.

If the abatement date on the citation is unrealistic, the informal conference is where you fix that, too. Requesting a reasonable abatement date isn’t weakness. Requesting it with a documented plan showing the steps and timeline is professional. Missing an abatement date triggers daily failure-to-abate penalties of up to $16,550 per day. That number escalates fast.

Contesting Citations: When It Makes Sense

Filing a Notice of Contest sends your case to the Occupational Safety and Health Review Commission (OSHRC). You have 15 working days from receipt of the citation to file. After that, the citation becomes a final order and the penalty is locked in.

Contest when you have a real defense:

• The violation didn’t occur. OSHA’s evidence is wrong or incomplete.
• The standard cited doesn’t apply to your operation or the conditions present.
• The classification is wrong. Serious was cited when the violation wasn’t likely to cause death or serious physical harm.
• The abatement date is genuinely impossible given lead times, contractor availability, or equipment delivery.

Don’t contest as a strategy to delay payment. OSHRC cases take 12 to 36 months to resolve. During that time, you still need to abate the hazard. And if you lose, you generally pay closer to the original proposed penalty, without the informal conference reductions you might have negotiated.

The informal conference and the Notice of Contest are not mutually exclusive. You can request an informal conference and still file a Notice of Contest before the 15-day deadline if you don’t reach an agreement. Doing both preserves your options.

Willful, Repeat, and Serious: How Classification Changes Everything

The violation classification controls the statutory maximum, which determines how high the penalty can go before reductions apply.

Serious violations carry a maximum of $16,550 per instance. “Serious” means there’s a substantial probability the hazard could cause death or serious physical harm, and the employer knew or should have known about it.

Willful violations max out at $165,514 per instance. OSHA classifies a violation as willful when the employer intentionally disregarded the requirements of the OSH Act or acted with plain indifference. A willful classification is a serious accusation. Challenge it at the informal conference with evidence showing you didn’t know about the condition or that you had a good faith belief your actions were legal.

Repeat violations also max out at $165,514. The “substantially similar” test for repeat violations is broader than most employers expect. OSHA doesn’t require the exact same standard to be cited twice. If you got cited for inadequate fall protection on a roof in 2022 and then get cited for inadequate fall protection in a different location in 2026, that’s potentially a repeat.

Other-than-serious violations max at $16,550 but often carry proposed penalties well below that because gravity assessments are lower. They’re still worth contesting if the classification is wrong.

Reclassifying a willful to a serious at the informal conference is worth more than almost any other outcome. It cuts the maximum by 90% before any other reductions apply.