The settlement, announced Thursday, ended a federal investigation into allegations that Lowe's had violated safe practices to prevent lead pollution.
In addition, the agency's investigation found that the company did not ensure that repair areas during improvements on three homes were properly contained and cleaned.
Under the settlement, Lowe's will pay the largest-ever fine imposed under the federal Lead Renovation, Repair and Painting Rule and will implement a corporate-wide program for its 1,700 stores to ensure that its contractors comply with lead-safety rules.
Cynthia Giles, an assistant EPA administrator, said the agreement "sends a clear message to all contractors and the firms they hire," a view also echoed by some consumer health advocates.
Amanda Manna, a spokeswoman for Lowe's, said the chain has "an aggressive compliance program." She noted that the EPA found only several contractors out of thousands used by Lowe's who violated the standards.
Lowe's will implement a checklist to document that its contractors have complied with the rule, as well as suspend contractors who violate it.
"Since a lot of the discrepancies are really about documenting and record-keeping practices," Manna said, "we have created this new record-keeping checklist for contractors that integrates existing record forms into a centralized document."
Ruth Ann Norton, who heads an initiative to prevent childhood lead poisoning, said she hoped that the agreement will influence other home-improvement firms, such as
But she criticized the fine as too low, noting that a study has shown that the economic cost of a child who is poisoned by lead is about twice as much.
And she noted that the EPA does not have a mechanism to make sure the work of contractors is safe, pointing out that Maryland will require post-renovation testing for lead dust in 2015.
Lead-based paint has been off the market since 1978, but it remains on the walls of many older residences and can create hazardous dust during renovations.
Because children are particularly vulnerable to lead poisoning, a federal rule places certain requirements on repairs in homes, child-care centers and preschools built before 1978. A federal survey in 2005-06 found that nearly 35% of all homes nationwide have lead-based paint.
Pregnant women also are vulnerable to lead poisoning, which affects the nervous system. High levels of exposure to the toxic substance can slow development in children and can lead to miscarriages and premature births.
The federal investigation, which began in 2011, uncovered violations of the lead-safety rule by contractors used by Lowe's stores from Alton, Ill., to Rochester, N.Y. The EPA examined records at stores where complaints had been lodged and expanded its efforts across a sampling of other stores.
The settlement with the EPA and the Justice Department is the first to tackle the practices on a "systemwide basis," said Robert G. Dreher, an acting assistant attorney general.
"This settlement also establishes an important principle: Big-box home-improvement retailers are responsible for compliance with the law by the contractors they hire to install their products," Dreher said in a conference call with reporters.
"Lowe's uses thousands of contractors across the country, and these actions will enhance compliance among them," he said.
Anne Havemann, a policy analyst at the Center for Progressive Reform, said she was worried that the EPA was giving a priority to large-scale enforcement moves, largely ignoring smaller-scale violators. Under its most recent strategic plan, Havemann said, the agency plans to roll back its enforcement, focusing on the largest cases.
The Lowe's settlement comes two months after the EPA won $274,000 in civil penalties through settlements with 35 renovation firms.
"These kinds of smaller violations are likely to fall through the cracks under EPA's new plan," Havemann said.