New rules to adjust civil penalty amounts

By |  June 30, 2016

The U.S. Department of Labor (DOL) announced two interim final rules to adjust its civil penalties for inflation based on the last time each penalty was increased.

According to DOL, the first rule will cover the majority of penalties, which are assessed by the Mine Safety & Health Administration, the Occupational Safety & Health Administration, the Office of Workers’ Compensation Programs, the Employee Benefits Security Administration, and the 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.

“Civil penalties should be a credible deterrent that influences behavior far and wide,” says Thomas E. Perez, U.S. secretary of labor. “Adjusting our penalties to keep pace with the cost of living can lead to significant benefits for workers and can level the playing field for responsible employers who should not have to compete with those who don’t follow the law.”

The new method will adjust penalties for inflation, although 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.

According to DOL, Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act in 2015 to advance the effectiveness of civil monetary penalties and to maintain their deterrent effect. According to DOL, the new law directs agencies to adjust their penalties for inflation each year using a more straightforward method than previously available, requiring agencies to publish “catch-up” rules this summer to make up for lost time since the last adjustments.

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.

Kevin Yanik

About the Author:

Kevin Yanik is editor-in-chief of Pit & Quarry. He can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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