ERISA Violations – On June 30, 2016, the US Department of Labor (DOL) issued an interim final rule (IFR) that significantly increases their fines and civil penalties the Department assesses for violations of ERISA, FLSA, FMLA and OSHA. The Labor Department has the authority for moves such as this under the Federal Civil Monetary Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Inflation Adjustment Act).
“Civil penalties should be a credible deterrent that influences behavior far and wide,” Secretary of Labor Thomas E. Perez said in a press release. “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 interim final rule is effective August 1, 2016. After the 45-day comment period on the IFR lapses, the DOL will publish final regulations.
Annual Penalty Adjustments for Inflation
The 2015 Inflation Adjustment Act directs the Department of Labor to adjust penalties annually for inflation. Beginning in 2017, the DOL will adjust penalty amounts no later than January 15 of each year. By January 15, 2017, DOL will adjust penalty amounts to reflect any increase in inflation that occurred between October 2015 and October 2016. Future annual inflation adjustments are not subject to regulatory notice and rulemaking requirements. The DOL will post any changes to penalty amounts on its website.
Increased Penalty Amounts for ERISA Violations
A table of the current penalty amounts enforceable by the Employee Benefit Security Administration (EBSA) and the inflation-adjusted penalty that will go into effect for penalties assessed after August 1, 2016, has been reproduced below. The full Fact Sheet from the DOL is available here.
California Employment Lawyers
Given the increased penalties taking effect in early August, California employers should take the time to conduct audits to ensure compliance with the various employment laws enforced by the DOL. Should you have questions about ERISA or the various laws enforced by the Department of Labor, don't hesitate to contact leading California employment lawyers at Kingsley & Kingsley. Call and speak to an experienced California lawyer toll-free at (888) 500-8469.