Department of Labor civil money penalties to increase in August

Last November Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Inflation Adjustment Act).  This new law requires federal agencies to adjust their civil monetary penalties for inflation every year.  It also directed each agency to release an interim final rule to adjust their penalties for inflation since the last time the penalties were increased, and to publish these new penalties no later than July 1, 2016, to take effect on August 1.     As a result, the Department of Labor (DOL) has published two interim final rules to adjust its penalties for inflation.  One DOL-only rule covers almost all penalties assessed by a number of DOL’s agencies including the Wage and Hour Division.  We discuss the increases in civil penalties under OSHA in a separate post here.   A second rule published jointly with the Department of Homeland Security adjusts the penalties associated with the H-2B temporary guest worker program.

The new penalty amounts are applicable only to civil penalties assessed after August 1, 2016, for violations occurring after November 2, 2015, the date the 2015 Inflation Adjustment Act was enacted.  Going forward, agencies are required to adjust their penalties for inflation before January 15 every year.

There are 22 different civil money penalties assessed by DOL’s Wage and Hour Division for various statutes that are impacted by these changes.  For example, the penalties for failure to comply with the Family and Medical Leave Act posting requirement rose from the current $110 to $163, an increase of $53, or 48%.  The maximum penalty for repeat and/or willful FLSA wage violations increases from the current $1100 to $1894, a 72% increase.  Increases to penalties for the various FLSA Child Labor provisions are in the 10% range.  A complete list of all DOL civil money penalties and the new figures can be found on their website.

The Department of Labor’s longer Interim Final Rule covers most of the penalties it assesses with the exception of H-2B guestworker regulations violations.   There have been conflicting legal decisions about DOL’s authority to independently issue H-2B regulations.  So to ensure that there is no question about the authority for the regulations to implement the Inflation Adjustment Act, DOL and the Department of Homeland Security jointly issued a separate Interim Final Rule  to adjust the H-2B penalties enforced by the Wage and Hour Division.  The new maximum H-2B penalties effective on 8/1/16 are 12% higher than the current ones.

Comments on the DOL-only rule may be sent via http://www.regulations.gov, by typing in “Department of Labor Federal Civil Penalties Inflation Adjustment Act Catch-Up Adjustments” (in quotes) in the Comment or Submission search box.   For the Joint DHS-DOL rule, search instead for “Department of Homeland Security and Department of Labor Federal Civil Penalties Inflation Adjustment Act Catch-Up Adjustments.” Comments must be submitted by August 15, 2016.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.