Employer Penalties Increase for Federal Law Violations

Employer noncompliance just got more expensive. On Jan. 15, 2020, the Department of Labor (DOL) released its 2020 inflation-adjusted civil monetary penalties that may be assessed on employers for violations of a wide range of federal laws, including:

  • Fair Labor Standards Act (FLSA)
  • Employee Retirement Income Security Act (ERISA)
  • Occupational Safety and Health Act (OSH Act)
What are the 2020 FLSA civil penalties?

The FLSA establishes minimum wage and overtime pay, sets record keeping requirements, and determines youth employment standards. Noncompliance by any of the following practices will be penalized for each infraction:

  • Repeated or willful violations of minimum wage or overtime requirements
    Penalty of up to $2,050 for each violation
  • Violations of child labor laws
    Penalty of up to $13,072 for each employee subject to the violation
  • Violations of child labor laws that cause death or serious injury to an employee under age 18
    Penalty of up to $59,413 for each violation (doubled to $118,826 if the violation is repeated or willful)
What are the 2020 ERISA civil penalties?

ERISA provides a set of standards for retirement and health insurance plans to protect employees. It requires employers to communicate plan information, sets participation and funding standards, outlines fiduciary responsibilities, and provides grievance rights and guarantees of payment. Noncompliance by any of the following practices will be penalized for each infraction:

  • Failure to file an annual report (Form 5500) with the DOL (unless a filing exemption applies)
    Penalty of up to $2,233 per day
  • Failure of a multiple employer welfare arrangement (MEWA) to file an annual report (Form M-1) with the DOL
    Penalty of up to $1,625 per day
  • Failure to furnish plan-related information requested by the DOL
    *Under ERISA, administrators of employee benefit plans must furnish to the DOL, upon request, any documents relating to the employee benefit plan.
    Penalty of up to $159 per day, but not to exceed $1,594 per request
  • Failure to provide the annual notice regarding CHIP coverage opportunities
    *This notice applies to employers with group health plans that cover residents of states that provide a premium assistance subsidy under a Medicaid or CHIP program.
    Penalty of up to $119 per day for each failure (each employee is a separate violation)
  • Failure to provide blackout notice or notice of right to divest employer securities (for 401(k) plans)
    Penalty of up to $141 per day
  • Failure to provide summary of benefits and coverage (SBC)
    Penalty of up to $1,176 per failure
What are the 2020 OSH Act civil penalties?

OSH Act outlines workplace safety and healthful work conditions for employees. Noncompliance by any of the following practices will be penalized for each infraction:

  • Violation of posting requirement
    Penalty of up to $13,494 for each violation
  • Other-than-serious violation
    Penalty of up to $13,494 for each violation
  • Serious violation
    Penalty of up to $13,494 for each violation
  • Willful violation
    Penalty between $9,639 and $134,937 per violation
  • Uncorrected violation
    Penalty of up to $13,494 per day until the violation is corrected
What other laws received an increased civil penalty for 2020?

Several other laws also saw an increase to their civil penalties, including the Family and Medical Leave Act (FMLA) for willful failure to post an FMLA general notice (penalty of up to $176 for each separate offense), the Employee Polygraph Protection Act (penalty of up to $21,410 for each violation), and more.

When is the effective date for the 2020 employer civil penalties?

These increased amounts apply to civil penalties that are assessed after Jan. 15, 2020 for violations that occurred anytime after Nov. 2, 2015.

What should employers do regarding the increased 2020 civil penalties?

To minimize potential liability, employers should review their compliance standards regarding pay practices, benefit plan administration and safety protocols to ensure they are in accordance with applicable federal requirements.

Source: Zywave, Inc.
Published with permission

Employer Penalties 2020

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Brad Fagergren

Author Brad Fagergren

Brad has been a certified Senior Human Resources Professional (SPHR) since 2010. He services both local and multi-state client companies and is our in-house FMLA expert. Outside of work, you might spot Brad mentoring, chaperoning, watching, or participating in sports.

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