The price of HR compliance goes up again!

Fines have been increased according to inflation.
Fines have been increased according to inflation.

I mentioned the other day that OSHA was increasing the amount they could now fine you. Well their partner in the Department of Labor decided that was a good idea and jumped on the bandwagon!

Effective August 1, 2016

The DOL’s so called Interim Final Rule will take effect on August 1, 2016.  The adjusted levels will apply to all penalties USDOL assesses after that date, and for FLSA violations that occurred after November 2, 2015. Backdating penalties, how nice of them. Up to this point the maximum penalty that could be fined was $1000 per incident. Citing that this was established in 1990 and it has not adjusted due to inflation, the DOL says the maximum amount that can be charged per incident is $1782. Currently for willful violations the DOL could charge $5000 per willful violation. That has been changed to $7251.
Thirdly, according to the release, the regulation allowed for:

 “a civil money penalty, not to exceed $35,000 per violation, where an employer displaced a U.S. worker employed by the employer 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.”

That penalty will now be $50,758.
Child labor violations have also gone up, according to Caroline Brown of Fisher Phillips. A standard child labor violation will now be $12,080 and a violation that results in a serious injury or death will be $54,910. If the violation were willful that will be doubled to $109,520. That is some serious money.

Why the odd amounts?

These odd amounts come from the Federal Civil Penalties Inflation Adjustment Act, enacted by Congress in 2015. According to attorney Amanda Weaver of Williams Mullen,The 2015 law directed agencies, such as OSHA, [and the DOL] to adjust their penalties for inflation each year using a much more straightforward method than previously available. The law also required agencies to publish “catch up” rules this summer to make up for lost time since the last adjustments. Agencies were directed to publish interim final rules by July 1, 2016.” Apparently inflation rose about 70% since 1990, hence the odd amounts. Someone followed the rule to the dollar.

All done in advance of the change in the Overtime rule

Of course all this increase in fines, and even back dating, has all been done in advance of the new rules on who is eligible for overtime going into effect on December 1, 2016. I suspect the government is planning on making some money as people complain about their employers.
Or am I just being cynical?

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