Back in May, the Department of Labor released new guidelines to update the Fair Labor Standards Act. The guidelines updated the minimum salary requirement for the white collar overtime exemption. However, it seems this won’t be the end of changes for FLSA. In November, the Bipartisan Budget Act of 2015 passed. In the act, Congress directed various agencies to update their penalties to adjust for inflation.
The penalty increases go into effect August 1st, 2016 but they affect violations dating back to when the Bipartisan Budget Act was passed. That’s 9 months ago, in November of 2015. These initial adjustments are large, catch-up adjustments as most penalties haven’t been updated for inflation since the 1990s to early 2000s. After this year, the penalties will be increased each year according to the Consumer Price Index.
So how much are these increases, exactly?
A full list can be found here, but the highlights:
- The FLSA increase will raise the penalty by over 70%, from $794-$1,100 to $1,894.
- Child Labor penalties will increase from $11,000 to $12,080, with penalties for child labor that results in a minor’s serious injury or death increasing from $50,000 to $54,910 (and that can be doubled for willful and repeated violations).
- OSHA penalties will increase by over 78%. Serious violation penalties will increase from $7,000 to $12,471, with willful and repeated violations increasing from $70,000 to $124,709.
- For failure or refusal to file the following forms, the penalty increase per day is:
- Form 5500 | from $1,100 to $2,063 per day
- Form M-1 | from $1,100 to $1,502 per day
- Failure to provide requested documentation to the Secretary of Labor, from $110 to $147 per day, with a maximum of $1,472 per request
Reviewing for compliance should be a regular exercise, but if it isn’t, this increase is a reminder to check this list of increases and be sure your company is compliant. These are just the intermediary increases. The Department of Justice is accepting comments until August 29th, 2016, after which the final ruling will be announced.