Labor Department to Adjust Civil Penalties for Inflation

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By Christine Pulfrey

Labor Department civil penalties assessed after Aug. 1, 2016, for violations that occurred after Nov. 2, 2015, are to be adjusted for inflation based on the last time each penalty was increased, the department said June 30.

Under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, federal agencies must annually adjust penalties for inflation using a more straightforward method than previously used and must publish catch-up rules this summer to make up for lost time since the last adjustments, the department said in a news release.

The catch-up and subsequent annual adjustments must be calculated based on the consumer price index for urban consumers, said the interim final rule ( RIN 1290-AA31), which was published July 1 in the Federal Register. The adjustment amount is capped at 150 percent of the existing penalty amount.

At least 22 Wage and Hour Division penalties are to rise, including the penalty for willful violations of Fair Labor Standards Act minimum wage and overtime rules, which is to increase to $1,894 from $1,100.

Penalties for violations of the FLSA's child-labor provisions and home-worker provisions also are to increase, as are penalties tied to violations of the Family and Medical Leave Act, Immigration and Nationality Act, Contract Work Hours and Safety Standards Act and the Walsh-Healey Public Contracts Act.

The first of the two interim final rules announced by the Labor Department covers most penalties assessed by the Wage and Hour Division, as well as the Employee Benefits Security Administration, Mine Safety and Health Administration, Occupational Safety and Health Administration, Office of Workers’ Compensation Programs and Wage and Hour Division, a fact sheet said.

The second rule is to be issued jointly with the Department of Homeland Security to adjust penalties associated with the H-2B temporary guest worker program.

The Labor Department deadline for comments on the rule is Aug. 15.

To contact the reporter on this story: Christine Pulfrey To contact the editor responsible for this story: Michael Trimarchi

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