On January 13th, 2023, the U.S. Department of Labor (DOL) made annual adjustments to civil monetary penalties for 2023. In brief, these penalties are assessed or enforced by the DOL and are pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act). The final rule was effective January 15th, 2023. Earlier, the DOL renewed a bi-agency memorandum of understanding in a joint effort to prevent employee misclassification.

Background of the Inflation Adjustment Act

The Inflation Adjustment Act made civil monetary penalties (CMPs) more effective by ensuring they remain a deterrent over time. Indeed, outdated penalties lose effectiveness over time and require regular inflation adjustments to keep pace with the cost of living. With this intention, the Inflation Adjustment Act amended the original Federal Civil Penalties Inflation Adjustment Act of 1990. Specifically, the Inflation Adjustment Act allows yearly evaluation of CMPs. Additionally, it grants the DOL the authority to impose those penalties on employers that violate the various employment laws the DOL enforces. Furthermore, the Inflation Adjustment Act provides a cost-of-living formula for the annual adjustments to CMPs. These adjustments are effective January 15 of each year and apply to penalties assessed after that date.

2023 Adjustments for Civil Monetary Penalties

The DOL’s final rule for the 2023 inflation adjustments to civil monetary penalties was published in the federal register on January 14. Accordingly, the final rule went into effect on January 15. Specifically, the 2023 adjustments affect penalties for violations in regards to the:

  • Employee Polygraph Protection Act (EPPA),
  • Fair Labor Standards Act (FLSA),
  • Family & Medical Leave Act (FMLA),
  • Immigration & Nationality Act (INA),
  • Migrant and Seasonal Agricultural Worker Protection Act (MSPA),
  • Occupational Safety and Health Act (OSH Act),
  • United States-Mexico-Canada Agreement (USMCA),
  • Walsh-Healey Public Contracts Act (PCA), and
  • Other contracted work.

Forthwith, the inflation adjustments cover several penalties for violations of labor laws that apply to a wide range of employers. In particular, the following violations and subsequent adjustments to civil monetary penalties may be of interest:

  • Penalties for violations of the EPPA have increased from $23,011 to $24,793.
  • Violations of child labor standards under the FLSA increased from $14,050 to $15,138.
  • Willful violations of FMLA posting requirements carry a penalty of $204, up from $189.
  • Meanwhile, penalties for the violation of Section 5(a)(1) of the OSH Act, also known as the General Duty Clause, as well as associated posting requirements, increased from $14,502 to $15,625 per day.

Space Saver-1 (SS1) All-On-One State and Federal Labor Law Poster

Indeed, some increases in civil monetary penalties deal with violations regarding various federal posting requirements. For that reason, employers must ensure compliance with the associated posting requirements and with the labor laws that they outline. Personnel Concepts pioneered the Space Saver-1 (SS1) All-On-One State and Federal Labor Law Poster in 1989 to help employers in that goal. In fact, its introduction created the entire labor law compliance poster industry! The state-specific SS1 posters are attorney-reviewed and updated throughout the year by the compliance research team. Furthermore, each SS1 poster comes with a “We Pay the Fine” Guarantee of up to $40,000.