Last year Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act to help the 
effectiveness of fines for civil penalties. The new law requires agencies to annually adjust civil penalties for inflation and put “catch up” rules in place to make up for lost time since the last period of adjustments.
Department of Labor Laws
There are a number of laws that fall under the Department of Labor (DOL) that will be affected by the newly established penalty increases set to hit on August 1, 2016. Requirements affected pertain to a number of laws including the most common ones listed below:
- Fair Labor Standards Act (FLSA)
- Family and Medical Leave Act (FMLA)
- Employment Retirement Security Income Act (ERISA)
- Occupational Safety and Health Act (OSHA)
Violations that have resulted in civil penalties that have taken place after the November 2, 2015 are affected and will be assessed in August 2016.
“Civil penalties should be a credible deterrent that influences behavior far and wide,” said U.S. Secretary of Labor Thomas E. Perez. “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.”[i]
Outdated Penalties
Though now adjusted for inflation, the increase is capped at 150% of the current penalty amount. This will level out some penalties that are outdated due to inflation. For example, OSHA maximum penalty amounts have not changed since 1990 and will see an increase of nearly 80% raising serious violations from $7,000 to $12,471.
OWCP’s penalty for failing to report a termination of payments made under the Longshore and Harbor Workers’ Compensation Act has increased only by $10 since 1927. It will now go from $110 to $275.
Employers can expect to see increases in penalties for FLSA minimum wage or overtime pay violations; willful FMLA posting requirement violations; Children’s Health Insurance Program (CHIP) benefits notice violations; Failure to file Form 5500 violations as well as violating OSHA posting requirements among others.
Compliance Tracking
As if compliance tracking is not already a mine field, increased penalties leave employers at increased risk and liability. It is now even more critical to have your organization’s legal experts or third party compliance experts get a handle on which laws will affect you.
These increased penalties provide the Department of Labor with inducement to pursue violations and assess penalties. In the case of an investigation, being delinquent with the new rulings will not fare well for employers.
Staying on top of the new compliance requirements is no easy task—but one that all employers are scrambling to get a handle on this summer.
How EPAY Can Help with the Department of Labor’s New Rule
Ensure compliance with the new Department of Labor penalty rules. By leveraging our unified human capital management system and professional services, we’ll help you stay compliant with DOL reporting changes. Schedule a personalized demonstration today.
[i] https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=32745