The U.S. Department of Labor announced that its agencies will begin adjusting their penalties for inflation.
Maximum penalties issued by the Occupational Safety and Health Administration (OSHA), which have not been raised since 1990, will increase by 78 percent. The top penalty for serious violations will rise from $7,000 to $12,471. The maximum penalty for willful or repeated violations will increase from $70,000 to $124,709.
The new civil penalty amounts are applicable only to civil penalties assessed after Aug. 1, 2016, where the associated violations occurred after Nov. 2, 2015.
The Federal Civil Penalties Inflation Adjustment Act Improvements Act that was passed in 2015 directs agencies to adjust their penalties for inflation each year using a more straightforward method than previously available, and requires agencies to publish “catch up” rules this summer to make up for lost time since the last adjustments.
“Civil penalties should be a credible deterrent that influences behavior far and wide,” said U.S. Secretary of Labor Thomas E. Perez. “Adjusting our penalties to keep pace with the cost of living can lead to significant benefits for workers and can level the playing field responsible employers who should not have to compete with those who don’t follow the law.”
The changes are being introduced in two rules. The first rule will cover the vast majority of penalties assessed by the department’s Employee Benefits Security Administration, Mine Safety and Health Administration, Office of Workers’ Compensation Programs, and Wage and Hour Division as well as OSHA.
Among the other penalties being raised is OWCP’s penalty for failure to report termination of payments made under the Longshore and Harbor Workers’ Compensation Act, which has only increased $10 since 1927, and will rise from $110 to $275. Also, WHD’s penalty for willful violations of the minimum wage and overtime provisions of the Fair Labor Standards Act will increase from $1,100 to $1,894.
The second rule will adjust penalties associated with the H-2B temporary guest worker program.
The new method will adjust penalties for inflation, though 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.
On July 1, the labor department opened a 45-day public comment period on the rules.
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