On June 30, 2016, the U.S. Department of Labor (USDOL) announced that the majority of wage and hour, safety, and benefits compliance matters, in addition to select immigration issues, will be subject to increased penalties on August 1, 2016.
During the announcement, the USDOL reminded employers that penalties existed to “encourage greater compliance” of federal law, and that the penalties were increased to keep pace with inflation (they had not been raised in decades). These new civil penalty amounts will be applicable only to penalties assessed after August 1, 2016, but will be retroactive to violations that occurred after November 2, 2015.
Fair Labor Standards Act (FLSA)
- Minimum Wage and Overtime: The maximum penalty for repeated or willful violations is expected to increase to approximately $1,894/violation.
- Child Labor Penalties: Each policy violation will increase to approximately $12,080. Violations resulting in serious injury or death to a minor could increase to $54,910 (or doubling to $109,820 for repeat offenders).
Occupational Safety and Health Administration (OSHA)
- Maximum OSHA penalties will increase by 78%.
- Maximum penalties for serious violations will rise from $7,000 to $12,471 and the maximum for willful or repeated violations will rise from $70,000 to $124,709.
Employee Retirement Income Security Act (ERISA)
- Failures to Provide Information to Participants and Beneficiaries: Be aware that though seemingly nominal, these penalties can compound quickly as a per person per day fine. Failure to deliver timely information to participants on health plans, retirement plans and multi-employer plans are all subject to penalty increases.
- Failures to Provide Information to the Government: Failures to timely file information with the government are assessed and penalized daily. Penalties are increasing from $1,100/day to up to $2,063/day depending on the type of violation.
- Failures With Respect To Genetic Information: For plans that discriminate based on participants or beneficiaries genetic information, penalties will increase to $110/participant during the period of violation.
- Failures that apply to poorly funded plans: Though not widely applicable, these penalties could prove taxing to those plans already under financial stress. Fines per penalty will rise to $1,296 per failure.
Immigration and Nationality Act (INA)
- Interim final rules announced, increasing civil penalties for certain violations of the INA, nonimmigrant visa program and The Migrant and Seasonal Agricultural Worker Protection Act.
- Employment-Related Violations Under the INA: Penalties for violations in connection with I-9 Forms will increase up to $2,156 per form. Knowingly hiring, recruiting, referring or retaining unauthorized employees can result in a maximum penalty of $21,563 for multiple offenses.
- Nonimmigrant Visa Program Violations:
- H-1B visa program violators could incur fines up to $7,251/violation depending upon severity. In instances where a U.S. worker is displaced during a 90 day period pre/post filing of an H-1B petition, employers could be fined upwards of $50,758/violation.
- H-2B visa program penalties will increase to $11,940/violation.
- H-2A visa program penalties can increase up to $5,491/violation. Violations resulting in death or serious injury of an H-2A worker could result in fines up to $108,745/violation depending on frequency, with additional potential penalties for lack of cooperation with a resulting investigation.
- D-1 visa program penalties will increase to $8,908/violation.
- Penalties of The Migrant and Seasonal Agricultural Worker Protection Act could increase to $2,355/violation.
In order to protect your business, we recommend that you review your company’s relevant policies in a timely manner to ensure you are not at risk of incurring hefty penalty increases due to non-compliance.
This summary is not a comprehensive listing, but is representative of the more significant findings. Please contact us if you have any questions about these penalties or your risk of exposure.
As always, our mission is to keep you fair, square, and legal in all areas.
Susan E. Crocker