On July 1, 2016, the Department of Labor (DOL) issued an interim final rule, effective August 1, 2016, to adjust the amounts of civil penalties as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. In order to improve the effectiveness of civil monetary penalties, maintain their deterrent effects, keep pace with inflation and promote compliance with the law, Congress enacted legislation requiring agencies to adjust the levels of civil monetary penalties with catch-up adjustments as well as annual adjustments to account for inflation. Future adjustments will be made by January 15 of each year, starting in 2017.
The interim final rule made adjustments to the civil monetary penalties enforced by the Employee Benefits Security Administration (EBSA) under the Employee Retirement Income Security Act of 1974 (ERISA). The adjustments apply to penalties assessed after August 1, 2016, whose violations occurred after November 2, 2015.
Some highlights of the new penalty amounts for ERISA violations include:
A full chart with all the penalty adjustments may be found in Appendix 1 of the Interim Final Rule.
The following five agencies are impacted by these changes: the Employee Benefits Security Administration, the Mine Safety and Health Administration, the Occupational Safety and Health Administration, the Office of Workers' Compensation Programs, and the Wage and Hour Division. The Office of Management and Budget (OMB) ensures uniform implementation of the adjusted penalties across agencies and that no adjustments exceed the statutory cap of 150 percent of the existing penalties.