Smart Benefits: Penalties for DOL Violations Increase Aug. 1

Smart Benefits: Penalties for DOL Violations Increase Aug. 1

On June 30, the Department of Labor (DOL) announced an interim final rule to adjust for inflation civil penalties assessed by the Employee Benefits Security Administration, Occupational Safety and Health Administration, and Wage and Hour Division, among others.

Examples of the increases include:

•    OSHA: The maximum penalty for failure to meet the posting requirements, serious violations, and other-than-serious violations will increase from $7,000 to $12,471. 
•    ERISA: Failure to issue SBCs will incur a maximum penalty of $1,087, up from $1,000, failure of a fiduciary to make a proper distribution from a defined benefit plan will increase from a max of $10,000 to $15,909, and the maximum penalty essentially doubles to $2,063 per day for failure/refusal to properly file a plan’s annual report 
•    WHD’s maximum 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 and will rise from $110 to $163 for FMLA violations. 

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A list of all civil penalty changes is available here. The new amounts are applicable only to civil penalties assessed after Aug. 1, 2016, whose associated violations occurred after Nov. 2, 2015.   

The department will accept public comments for 45 days from publication of the interim rule to inform the publication of any final rule.

Rob Calise is the Managing Director, Employee Benefits. of Cornerstone|Gencorp, where he helps clients control the costs of employee benefits by focusing on consumer driven strategies and on how to best utilize the tax savings tools the government provides. Rob serves as Chairman of the Board of United Benefit Advisors, and is a board member of the Blue Cross & Blue Shield of RI Broker Advisory Board, United HealthCare of New England Broker Advisory Board and Rhode Island Business Healthcare Advisors Council. He is also a member of the National Association of Health Underwriters (NAHU), American Health Insurance Association (AHIA) and the Employers Council on Flexible Compensation (ECFC), as well as various human resource associations. Rob is a graduate of Bryant University with a BS in Finance.