DOL updates civil penalties; OSHA maximums up by 78 percent
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Tuesday, July 5, 2016

DOL updates civil penalties; OSHA maximums up by 78 percent

By Pamela Wolf, J.D. The Department of Labor has issued an interim final rule to adjust the amounts of civil penalties assessed or enforced under its regulations. Those adjustment amounts pertain to regulations enforced by the ETA, the WHD, and OSHA, among other agencies. A separate interim final rule was jointly issued by the DOL’s WHD and the Department of Homeland Security (joint rule) to adjust civil penalties for violations under the H-2B Program for temporary non-agricultural workers. Both interim final rules are scheduled for publication in the Federal Register on July 1. Inflation Adjustment Act. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act), requires that agencies adjust civil monetary penalties with an initial catch-up adjustment, followed by annual adjustments for inflation. The catch-up calculation and subsequent annual adjustments must be based on the Consumer Price Index for all Urban Consumers. The DOL was required to publish its interim final rules by July 1, 2016, with new penalty levels effective no later than August 1, 2016. H-1B visa program. Section 212(n)(2)(C) of the Immigration and Nationality Act (INA) and existing ETA regulations at 20 CFR 655.810(b) govern the imposition of civil money penalties for certain violations of the H-1B visa program that are enforced by the WHD. These authorities provide three levels of penalties. Paragraph 2(b) involves violations of the H-1B visa program. The following penalty adjustments are made by the DOL’s interim final rule:
  • Section 655.810(b)(1) is revised to increase the maximum penalty for violations specified therein from $1,000 to $1,782 per violation.
  • Under Section 655.810(b)(2), which provides for a civil money penalty for certain willful violations specified therein and for discrimination against an employee, as described in 20 CFR 655.801(a), the maximum penalty for violations is increased from $5,000 per violation to $7,251 per violation. Conforming changes to reflect the adjusted civil money penalty amount are also made to 20 CFR 655.801(b).
  • Section 655.810(b)(3), which provides for a civil money penalty where an employer has displaced a U.S. worker in the period beginning 90 days before and ending 90 days after the filing of an H–1B petition in conjunction with certain willful violations specified therein, is revised to increase the maximum penalty for violations from $35,000 to $50,578 per violation.
H-2B program adjustments. In a separately filed joint interim final rule, the WHD and the DHS made catch-up adjustments to civil monetary penalties assessed or enforced in connection with employment of temporary nonimmigrant workers under the H-2B program. INA Section 214(c)(14) provides for imposition of civil money penalties for a substantial failure to meet the terms and conditions of employing an H-2B nonimmigrant worker, or for a willful misrepresentation of a material fact in a petition for an H-2B nonimmigrant worker. The penalty is found at 29 CFR 503.23. Applicable violations include those related to wages, impermissible deductions, prohibited fees and expenses, and improper refusal to employ or hire U.S. workers, among others. Under Section 503.23(b), (c), and (d), the maximum civil money penalty is increased from $10,000 to $11,940 per violation. The Departments invite comments on the calculations outlined in the joint rule. The increased penalty levels will apply to all penalties assessed after the effective date, August 1, 2016, for associated violations that occurred after November 2, 2015. Therefore, violations occurring on or before November 2, 2015, as well as assessments made prior to August 1, 2016, whose associated violations occurred after November 2, 2015, will continue to be subject to the civil monetary penalty amounts currently set forth in the regulations in 29 CFR part 503 (2015). WHD penalty adjustments. The interim final rule also made adjustments to civil monetary penalties administered by WHD to enforce provisions of the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), the INA, the FLSA, and the FMLA, among other laws, including those discussed below. MSPA violations. Section 503(a)(1) of the MSPA and existing regulations at 29 CFR 500.1(e) authorize the Secretary of Labor to impose a civil money penalty of not more than $1,000 per violation on persons who violate the MSPA or any regulation under it. The final interim rule revises Section 500.1(e) to increase the maximum penalty for violations of the MSPA or MSPA regulations from $1,000 to $2,355 per violation. H-2A Program adjustments. INA Section 218(g)(2) authorizes the Secretary to impose appropriate penalties to assure employer compliance with the terms and conditions of employment under the H-2A visa program for temporary agricultural employment of aliens in the United States. Regulations at 29 CFR part 501 and 20 CFR part 655 govern the program. Section 501.19(a) of those regulations provides for imposition of civil money penalties for each violation of the work contract, or the obligations imposed by 8 U.S.C. 1188, 20 CFR part 655, subpart B, or the regulations in 29 CFR part 501. Section 501.19(c) through (f) provides the maximum civil money penalty amounts for various violations. The maximum civil penalties for violations of those sections are revised under the interim final rule as follows:
  • Under Section 501.19(c), which provides a civil money penalty for each violation of the work contract or of the H-2A visa program’s statutory or regulatory requirements, the maximum penalty is increased from $1,500 to $1,631 per violation.
  • Under Section 501.19(c)(1), which provides a civil money penalty for each willful violation of the work contract, of the H-2A visa program’s statutory or regulatory requirements, or for each act of discrimination prohibited by Section 501.4, the maximum penalty is increased from $5,000 to $5,491.
  • Under Section 501.19(c)(2), which provides a civil money penalty for a violation of a housing or transportation safety and health provision of the work contract or of the H-2A visa program’s statutory or regulatory requirements that proximately causes the death or serious injury of any worker, the maximum penalty is increased from $50,000 to $54,373 per worker.
  • Under Section 501.19(c)(4), which provides a civil money penalty for a repeat or willful violation of a housing or transportation safety and health provision of the work contract or of the H-2A visa program’s statutory or regulatory requirements that proximately causes the death or serious injury of any worker, the maximum penalty is increased from $100,000 to $108,745 per worker.
  • Under Section 501.19(d), which provides a civil money penalty for failure to cooperate with a WHD investigation, the maximum penalty is increased from $5,000 to $5,491 per investigation.
  • Under Section 501.19(e), which provides that a civil money penalty for laying off or displacing any U.S. worker employed under the circumstances specified therein, the maximum penalty is increased from $15,000 to $16,312 per violation per worker.
  • Under Section 501.19(f), which provides a civil money penalty for improperly rejecting a U.S. worker who is an applicant for employment in violation of the H-2A visa program’s statutory or regulatory requirements, the maximum penalty is increased from $15,000 to $16,312 per violation per worker.
FLSA violations. Section 16(e)(2) of the FLSA and the regulations at 29 CFR 578.3(a) provide for assessment of civil money penalties for any person who repeatedly or willfully violates FLSA Sections 6 (minimum wage) or 7 (overtime). Section 578.3(a) is revised by the final interim rule to increase the maximum penalty for a repeated or willful violation of Sections 6 or 7 from $1,100 to $1,894 per violation. Conforming changes to reflect the adjusted maximum civil money penalty amount are made to Section 579.1(a)(2). Additionally, historical information about penalties for repeated or willful violations of Sections 6 or 7 contained in 29 CFR 578.1 is revised to reflect passage of the Inflation Adjustment Act and its requirement to make civil money penalty adjustments annually. FMLA penalty adjustments. Section 109(b) of the FMLA, as amended, and existing 29 CFR 825.300(a)(1) provide for assessment of a civil money penalty for each willful violation of the FMLA’s posting requirement. Section 825.300(a)(1) is revised by the final interim rule to increase the penalty for violations from $110 to $163 for each separate offense. OSHA violations. Section 17(a) of the OSH Act, 29 U.S.C 666(a), provides civil penalties for employers that willfully or repeatedly violate Section 5 requirements, any standards, rules or orders promulgated under Section 6, or applicable regulations. The final interim rule adjusts the penalty of not more than $70,000 for each violation, but not less than $5,000 for each willful violation, to a maximum penalty of $124,709 for willful and repeated violations, and the minimum penalty to $8,908 for willful violations. The updates are set out in Section 1903.15(d)(1) and (2). The final interim rule also makes these adjustments:
  • For serious violations under Section 17(b), which provides that employers who have received a citation for a serious violation of Section 5 requirements, any standard, rule, or order promulgated under Section 6, or applicable regulations, the maximum civil penalty is increased from $7,000 per violation is increased to $12,471. The update is set out in Section 1903.15(d)(3).
  • For other-than-serious violations under Section 17(c), which provides that employers who have received a citation for a violation Section 5 requirements, any standard, rule, or order promulgated under Section 6, or applicable regulations, where the violation is determined not to be of a serious nature, the maximum civil penalty is increased from $7,000 for each violation to $12,471 for each day during which such failure or violation continues. The update is set out in Section 1903.15(d)(4).
  • For violations under Section 17(d), which provides that any employer who fails to correct a violation for which a citation has been issued under Section 9(a) within the period permitted for the correction, the maximum civil penalty is increased from $7,000 for each day during which such failure or violation continues, to a maximum penalty of $12,471. The update is set out in Section 1903.15(d)(5).
  • For violations of a posting requirement under Section 17(i), the maximum civil penalty of $7,000 for each violation is increased to $12,471. The update is set out in Section 1903.15(d)(6).
In a press release, the DOL acknowledged that OSHA maximum penalties, which have not been raised since 1990, are increasing by 78 percent. Resources. In conjunction with the interim final rules, the DOL has issued a fact sheet and a list of each agency’s penalty adjustments. Comments. Comments on both interim final rules must be submitted within 45 days following publication in the Federal Register.

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