By David Slaughter, JD, Senior Legal Editor
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Get Your Report Now!Maximum penalties for violating many employment and benefits laws were increased, some of them substantially, by the U.S. Department of Labor (DOL) in a department-wide rule published July 1 (81 Fed. Reg. 43429).
The increases were made to implement the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. This law directed agencies to adjust their penalties for inflation each year using a much more straightforward method than previously available, and it required agencies to publish “catch-up” rules this summer to make up for lost time since the last adjustments.
“Civil penalties should be a credible deterrent that influences behavior far and wide,” said DOL Secretary Thomas Perez in a statement. “Adjusting our penalties to keep pace with the cost of living can lead to significant benefits for workers and can level the playing field responsible employers who should not have to compete with those who don’t follow the law.”
Prior law also had required that penalties be adjusted for inflation, but imposed various caps and rounding rules that, in practice, kept them from doing so, according to the DOL. As a result, some of the new increases are significant.
For example, the Wage and Hour Division’s maximum penalty for willful minimum wage and overtime violations under the Fair Labor Standards Act (FLSA) will rise from $1,100 to $1,894. The maximum penalty for failing to post Family and Medical Leave Act (FMLA) notices will increase from $110 to $163.
The affected Employee Retirement Income Security Act (ERISA) penalties apply to a number of notice, reporting, and plan administration requirements. For example, the maximum penalty for failing to file a Form 5500 increases from $1,100 to $2,063 per day, and failing to provide a Summary of Benefits and Coverage required by the Affordable Care Act (ACA) now carries a penalty of up to $1,087 (formerly $1,000). Both maximum and minimum penalties under the Genetic Information Nondiscrimination Act (GINA) were raised as well.
The DOL has compiled a chart of the penalty adjustments. The new penalty amounts will apply to civil penalties assessed by the agency after August 1, for violations that occurred after November 2, 2015. The DOL is accepting public comments on the interim final rule until August 15.
|  David A. Slaughter, JD, is a Senior Legal Editor for BLR’s Thompson HR products, focusing on benefits compliance. Before coming to BLR, he served as editor of Thompson Information Services’ (TIS) HIPAA guides, along with other writing and editing duties related to TIS’ HR/benefits offerings. Mr. Slaughter received his law degree from the University of Virginia and his B.A. from Dartmouth College. He is an associate member of the Virginia State Bar.
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