diff --git a/x/emissions/abci.go b/x/emissions/abci.go
index 8e009356a0..96be4ae613 100644
--- a/x/emissions/abci.go
+++ b/x/emissions/abci.go
@@ -22,6 +22,14 @@ func BeginBlocker(ctx sdk.Context, keeper keeper.Keeper) {
 	observerRewards := sdk.MustNewDecFromStr(keeper.GetParams(ctx).ObserverEmissionPercentage).Mul(blockRewards).TruncateInt()
 	tssSignerRewards := sdk.MustNewDecFromStr(keeper.GetParams(ctx).TssSignerEmissionPercentage).Mul(blockRewards).TruncateInt()
 
+	// TODO : Replace hardcoded slash amount with a parameter
+	// https://github.com/zeta-chain/node/pull/1861
+	slashAmount, ok := sdkmath.NewIntFromString(types.ObserverSlashAmount)
+	if !ok {
+		ctx.Logger().Error(fmt.Sprintf("Error while parsing observer slash amount %s", types.ObserverSlashAmount))
+		return
+	}
+
 	// Use a tmpCtx, which is a cache-wrapped context to avoid writing to the store
 	// We commit only if all three distributions are successful, if not the funds stay in the emission pool
 	tmpCtx, commit := ctx.CacheContext()
@@ -30,7 +38,7 @@ func BeginBlocker(ctx sdk.Context, keeper keeper.Keeper) {
 		ctx.Logger().Error(fmt.Sprintf("Error while distributing validator rewards %s", err))
 		return
 	}
-	err = DistributeObserverRewards(tmpCtx, observerRewards, keeper)
+	err = DistributeObserverRewards(tmpCtx, observerRewards, keeper, slashAmount)
 	if err != nil {
 		ctx.Logger().Error(fmt.Sprintf("Error while distributing observer rewards %s", err))
 		return
@@ -63,7 +71,12 @@ func DistributeValidatorRewards(ctx sdk.Context, amount sdkmath.Int, bankKeeper
 // NotVoted or Unsuccessful votes are slashed
 // rewards given or slashed amounts are in azeta
 
-func DistributeObserverRewards(ctx sdk.Context, amount sdkmath.Int, keeper keeper.Keeper) error {
+func DistributeObserverRewards(
+	ctx sdk.Context,
+	amount sdkmath.Int,
+	keeper keeper.Keeper,
+	slashAmount sdkmath.Int,
+) error {
 
 	rewardsDistributer := map[string]int64{}
 	totalRewardsUnits := int64(0)
@@ -114,13 +127,6 @@ func DistributeObserverRewards(ctx sdk.Context, amount sdkmath.Int, keeper keepe
 		}
 		if observerRewardUnits < 0 {
 
-			// TODO : Replace hardcoded slash amount with a parameter
-			// https://github.com/zeta-chain/node/pull/1861
-			slashAmount, ok := sdkmath.NewIntFromString(types.ObserverSlashAmount)
-			if !ok {
-				continue
-			}
-
 			keeper.SlashObserverEmission(ctx, observerAddress.String(), slashAmount)
 			finalDistributionList = append(finalDistributionList, &types.ObserverEmission{
 				EmissionType:    types.EmissionType_Slash,
diff --git a/x/emissions/abci_test.go b/x/emissions/abci_test.go
index 07240d1450..a4a66b34a0 100644
--- a/x/emissions/abci_test.go
+++ b/x/emissions/abci_test.go
@@ -153,6 +153,7 @@ func TestBeginBlocker(t *testing.T) {
 }
 
 func TestDistributeObserverRewards(t *testing.T) {
+	keepertest.SetConfig(false)
 	observerSet := sample.ObserverSet(4)
 
 	tt := []struct {
@@ -286,8 +287,9 @@ func TestDistributeObserverRewards(t *testing.T) {
 			ctx = ctx.WithBlockHeight(100)
 
 			// Distribute the rewards and check if the rewards are distributed correctly
-			err = emissionsModule.DistributeObserverRewards(ctx, tc.totalRewardsForBlock, *k)
+			err = emissionsModule.DistributeObserverRewards(ctx, tc.totalRewardsForBlock, *k, tc.slashAmount)
 			require.NoError(t, err)
+
 			for i, observer := range observerSet.ObserverList {
 				observerEmission, found := k.GetWithdrawableEmission(ctx, observer)
 				require.True(t, found, "withdrawable emission not found for observer %d", i)