The Department of Labor (DOL) issued a final rule (January 2, 2018) that increases the DOL civil monetary penalties for violations of the Employee Retirement Income Security Act (ERISA) and other federal laws such as the Fair Labor Standards Act (FLSA), Family Medical Leave Act (FMLA) and Occupational Safety and Health Act (OSHA). The increased amounts apply for penalties assessed after January 2, 2018 (for any violations that occurred after November 2, 2015.)
Examples of Actions Subject to DOL Fines
- Failure to file Form 5500 or M-1 (MEWAs).
- Failure to provide a Summary of Benefits and Coverage (SBC).
- Failure to furnish information required by the DOL
- Repeated violations of minimum wage or overtime requirements under FLSA
- Willful violations of the poster requirement under the FMLA or OSHA.
Action Steps for Employers
Employers should become familiar with the new penalty amounts and review their benefit plan administration, pay practices and safety protocols to ensure they are in compliance with federal requirements.
The 2015 Inflation Adjustment Act (Act) included provisions to strengthen civil monetary penalties under various federal laws in order to maintain their deterrent effect. The Act required an initial “catch-up” adjustment in 2016, and since 2017 has required the DOL and other federal agencies to adjust their civil monetary penalties annually for inflation, no later than January 15th, and to post these changes on their websites. (Click here for a prior article about the Inflation Adjustment Act and DOL increases in 2016.)
Matrix of Penalty Amounts
The following matrix lists the increased penalties that apply to group health and welfare plans under ERISA, pursuant to the Inflation Adjustment Act. The full matrix on the DOL website also includes many penalties that apply to retirement plans, and to employers pursuant to other laws administered by the DOL. Click here for the regulations.
|Description of ERISA Violations Subject to Penalty||ERISA Section||2017 Penalty Amount||2018 Penalty Amount|
|Form 5500. Failure to file||ERISA §502(c)(2) (5500)||Up to $2,097 per day||Up to $2,140 per day|
|Form M-1. Failure to file by multiple employer welfare arrangement (MEWA)||ERISA §502(c)(5)||Up to $1,527 per day||Up to $1,558 per day|
|Failure to furnish information requested by DOL under ERISA § 104(a)(6)||ERISA 502(c)(6)||Up to $149 per day not to exceed $1,496 per request||Up to $152 per day not to exceed $1,527 per request|
|SBC. Failure to provide Summary of Benefits Coverage. Public Health Services Act section 2715(f), as incorporated into ERISA § 715 and 29 CFR 2590, 715-2715(e).||ERISA § 715 (SBC)||Up to $1,105 per failure||Up to $1,128 per failure|
|CHIP. Employer failure to inform employees of CHIP coverage opportunities under ERISA § 701 (f)(3)(B)(i)(I)- each employee a separate violation||ERISA §502(c)(9)(A) (CHIP)||Up to $112 per day||Up to $114 per day|
|GINA. Failure by any group health plan sponsor, or any health insurance issuer, to meet the requirements of ERISA §§ 702 (a)(1)(F), (b)(3), (c) or (d); or § 701; or § 702(b)(1) with respect to genetic information||ERISA 502(c)(10) (B)(I) (GINA)||$112 per day during non-compliance period||$114 per day during non-compliance period|
|GINA. Minimum penalty for de minimis violations of GINA (genetic information requirements) not corrected prior to notice from DOL.||ERISA §502(c)(10) (C)(i) (GINA)||$2,790 minimum||$2,847 minimum|
|GINA. Minimum penalty for non de minimis violations that are not corrected prior to notice from DOL.||ERISA §502 (c)(10) (C) (ii) (GINA)||$16,742 minimum||$17,084 minimum|
|GINA. Cap on unintentional failures to meet genetic information requirements||ERISA §502(c)(10) (D)(iii)(II)||$558,078 maximum||$569,468 maximum|
|Description of Non-ERISA Violations Subject to Penalty||Cite||2017 Penalty Amount||2018 Penalty Amount|
|FLSA. Repeated or willful violations of overtime or minimum wage requirements.||FLSA||Up to $1,925 per violation||Up to $1,964 per violation|
|FMLA. Willful failure to post FMLA general notice.||FMLA||Up to $166 per violation||Up to $169 per violation|
|OSHA. Violation of posting requirements.||OSHA||Up to $12,675 per violation||Up to $12,934 per violation|
|Violations of Employee Polygraph Protection Act (EPPA)||EPPA||Up to $20,111 per violation||Up to $20,521 per violation|