The EEOC has issued a final rule raising the penalty for violations of the notice posting requirements in Title VII, the ADA, and GINA from $210 to $525. The adjustment comes as a result of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 to require that each federal agency, not later than July 1, 2016, and not later than January 15 of every year thereafter, issue regulations adjusting for inflation the maximum civil penalty that may be imposed pursuant to each agency's statutes. The final rule is scheduled for publication in the Federal Register on June 2.
The last time the EEOC adjusted the penalty was on March 19, 2014, through a final rule that raised the then-maximum penalty per violation from $110 to $210. Period adjustments to the penalty are to be calculated pursuant to the inflation adjustment formula provided in section 5(b) of the 2015 Act and, in accordance with section 6 of the 2015 Act, the adjusted penalty is to apply only to penalties assessed after the effective date of the adjustment.
The EEOC explained this latest adjustment was calculated by comparing the CPI-U for October 2015 with the CPI-U for October 1964, the calendar year during which the amount of the civil monetary penalty was established, resulting in an inflation adjustment factor of 7.64752. The inflation-adjustment factor (7.64752) was multiplied by the civil penalty amount ($100) in the year that the penalty was established to calculate the inflation-adjusted penalty level ($764.752). The inflation-adjusted penalty was then rounded to the nearest dollar ($765). The new inflation-adjusted penalty amount ($765) was then compared with the penalty amount ($210) reported in the prior year’s Agency Financial Report (AFR).
Under the 2015 Act, the adjustment amount cannot exceed 150 percent of the last reported penalty ($210). To achieve an increase of 150 percent, the last AFR reported penalty amount ($210) was multiplied by 2.5, and rounded to the nearest dollar ($525). Finally, the inflation-adjusted penalty amount ($765) was compared with the penalty amount that is 150 percent more than the last reported penalty level ($525). The 2015 Act specifies that if the inflation-adjusted penalty amount ($765) is larger, the 150 percent limit applies, and the increase is limited to 150 percent. Accordingly, the EEOC is adjusting the maximum penalty per violation specified in 29 CFR 1601.30(a) from $210 to $525.
The final rule is effective 30 days after publication in the Federal Register.
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