The Department of Labor (DOL) has announced the 2024 annual adjustments to civil monetary penalties for a wide range of benefit-related violations. As background, legislation enacted in 2015 requires annual adjustments to certain penalty amounts by January 15th of each year. The increased 2024 penalties are effective after January 15, 2024, and apply to any violations occurring after November 2, 2015.
Health and Welfare Benefit Plans
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Category
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Updated Penalty
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Failure to file Form 5500
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$2,670 per day that the filing is late
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Summary of Benefits and Coverage (SBC)
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$1,406 per failure (which means per participant not receiving an SBC)
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Failure to provide notice of CHIP availability
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$141 per day per participant
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401(k) Plan Penalties
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Category
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Updated Penalty
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Failure to provide notice for auto-enrollment plans
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$2,112 per day
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Failure to provide blackout notices
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$169 per day
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Failure to comply with recordkeeping and reporting requirements
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$37 per day per employee
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Genetic Information Nondiscrimination Act (GINA)
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Category
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Updated Penalty
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Failure to comply with GINA requirements
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$141 per day of noncompliance
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Minimum penalty for non-de-minimus failure to meet genetic information requirements not corrected before notice from DOL
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$20,641 minimum
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Cap on penalties for unintentional failure to meet genetic information requirements
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$688,012 maximum
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Other Penalties
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Category
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Updated Penalty
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Failure to file annual report for MEWAs (including M-1)
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$1,942 per day
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Failure to provide plan documents to DOL within 30 days of request
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$190 per day late (capped at $1,906 per request)
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Penalty Reality
The reality is that the DOL retains discretion to impose lower penalties, and, in certain circumstances, they do. It is, therefore, true that not all violations will result in maximum penalties being applied. That said, out-of-compliance employers should not bank on leniency in the assessment of penalties without a compelling reason for their non-compliance. While a certain measure of penalty moderation has been seen in the past, we think that the DOL’s enforcement efforts will continue to tighten in the future.
References
Federal Civil Penalties Inflation Adjustments
