On Jan. 2, 2018, the Department of Labor (DOL) issued a final rule that increases the civil penalty amounts that may be imposed on employers under various federal laws. The final rule increases the civil penalty amounts associated with:
- Failing to file an annual Form 5500 under the Employee Retirement Income Security Act (ERISA);
- Repeated or willful violations of minimum wage or overtime requirements under the Fair Labor Standards Act (FLSA);
- Willful violations of the poster requirement under the Family and Medical Leave Act (FMLA); and
- Violations of the poster requirement under the Occupational Safety and Health Act (OSH Act).
The increased amounts apply to civil penalties that are assessed after Jan. 2, 2018.
Employers should become familiar with the new penalty amounts and review their pay practices, benefit plan administration and safety protocols to ensure compliance with federal requirements.
The 2015 Inflation Adjustment Act (Act) includes provisions to strengthen civil monetary penalties under various federal laws in order to maintain their deterrent effect. The Act required federal agencies, including the DOL, to adjust the civil monetary penalties with an initial “catch-up” adjustment. The DOL made this initial adjustment in July 2016. Federal agencies are also required to make subsequent annual adjustments for inflation, no later than Jan. 15 of each year.
The DOL’s final rule implements the 2018 annual adjustments for civil penalties assessed or enforced by the DOL, including penalties under the FLSA, FMLA, OSH Act and ERISA. The increased penalty amounts became effective on Jan. 2, 2018, and may apply for any violations occurring after Nov. 2, 2015.
The updated maximum penalty amounts are shown in the table below.
|Wage and Hour|
|Repeated or willful violations of minimum wage or overtime requirements (FLSA)||Up to $1,925 for each violation||Up to $1,964 for each violation|
|Violations of child labor laws||Up to $12,278 for each employee subject to the violation||Up to $12,529 for each employee subject to the violation|
|Violations of child labor laws that cause death or serious injury to an employee under age 18||Up to $55,808 for each violation (doubled to $111,616 if the violation is repeated or willful)||Up to $56,947 for each violation (doubled to $113,894 if the violation is repeated or willful)|
|Willful failure to post FMLA general notice||Up to $166 for each separate offense||Up to $169 for each separate offense|
|Violations of the Employee Polygraph Protection Act (EPPA)||Up to $20,111 for each violation||Up to $20,521 for each violation|
|Failure to file an annual report (Form 5500) with the DOL (unless a filing exemption applies)||Up to $2,097 per day||Up to $2,140 per day|
|Failure of a multiple employer welfare arrangement (MEWA) to file an annual report (Form M-1) with the DOL||Up to $1,527 per day||Up to $1,558 per day|
|Failure to furnish plan-related information requested by the DOL
*Under ERISA, administrators of employee benefit plans must furnish to the DOL, upon request, any documents relating to the employee benefit plan.
|Up to $149 per day, but not to exceed $1,496 per request||Up to $152 per day, but not to exceed $1,527 per request|
|Failing to provide the annual notice regarding CHIP coverage opportunities
*This notice applies to employers with group health plans that cover residents of states that provide a premium assistance subsidy under a Medicaid or CHIP program.
|Up to $112 per day for each failure (each employee is a separate violation)||Up to $114 per day for each failure (each employee is a separate violation)|
|For 401(k) plans, failure to provide blackout notice or notice of right to divest employer securities||Up to $133 per day||Up to $136 per day|
|Failure to provide Summary of Benefits and Coverage (SBC)||Up to $1,105 per failure||Up to $1,128 per failure|
|Employee Safety – OSH Act|
|Violation of posting requirement||Up to $12,675 for each violation||Up to $12,934 for each violation|
|Other-than-serious violation||Up to $12,675 per violation||Up to $12,934 for each violation|
|Serious violation||Up to $12,675 for each violation||Up to $12,934 for each violation|
|Willful violation||Between $9,054 and $126,749 per violation||Between $9,239 and $129,336 per violation|
|Uncorrected violation||Up to $12,675 per day until the violation is corrected||Up to $12,934 per day until the violation is corrected|