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U.S. Department of Labor | June 30, 2016
WASHINGTON – In
2015, Congress passed the Federal Civil
Penalties Inflation Adjustment Act Improvements Act to advance the
effectiveness of civil monetary penalties and to maintain their deterrent
effect. The new law directs agencies to adjust their penalties for
inflation each year using a much more straightforward method than previously
available, and requires agencies to publish “catch up” rules this summer to make
up for lost time since the last adjustments.
As a result, the U.S. Department of Labor announced today two
interim final rules to adjust its penalties for inflation based on the last
time each penalty was increased.
“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.”
The first
rule will cover the vast majority of penalties assessed by the department’s
Employee Benefits Security Administration,
Mine Safety and Health Administration, Occupational Safety and Health Administration, Office of Workers’ Compensation Programs,
and Wage and Hour Division. The second rule will be issued jointly
with the Department of Homeland Security to adjust penalties associated with
the H-2B temporary guest worker program.
Under the 2015
law, agencies are directed to publish interim final rules by July 1, 2016. The
department will accept public comments for 45 days to inform the publication of
any final rule.
The new
method will adjust penalties for inflation, though the amount of the increase is capped at 150 percent of the existing
penalty amount. The baseline is the last increase other than for
inflation. The new civil penalty amounts are applicable only to civil penalties
assessed after Aug. 1, 2016, whose associated violations occurred after Nov. 2,
2015.
The rules published under the 2015 law will modernize some
penalties that have long lost ground to inflation:
– OSHA’s maximum penalties, which
have not been raised since 1990, will increase by 78 percent. The top penalty
for serious violations will rise from $7,000 to $12,471. The maximum penalty
for willful or repeated violations will increase from $70,000 to $124,709.
– OWCP’s penalty for failure to report
termination of payments made under the Longshore and Harbor Workers’
Compensation Act, has only increased $10 since 1927, and will rise from $110 to
$275.
–
WHD’s
penalty for willful violations of the minimum wage and overtime provisions of
the Fair Labor Standards Act will increase from $1,100 to $1,894.
A Fact Sheet on the Labor
Department’s interim rule is available here. A list of each agency’s individual penalty adjustments is available here.
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Media Contacts:
Amy Louviere, 202-693-9423, louviere.amy@dol.gov
Release Number: 16-1380-NAT
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