DOL Adjusts ERISA Civil Monetary Penalties

The Department of Labor’s (DOL) has issued an interim final rule to adjust for inflation the civil monetary penalties enforceable by the agency.

The DOL explains that the Federal Civil Monetary Penalties Inflation Adjustment Act of 1990, required Federal agencies, including the DOL, to adjust their civil monetary penalties for inflation. In 1997 and 2003, the Department adjusted a number of civil monetary penalties enforceable by the Department under Title I of the Employee Retirement Income Security Act (ERISA).

In 2015, the Federal Civil Monetary Penalties Inflation Adjustment Act Improvements Act amended the Inflation Adjustment Act of 1990. The 2015 amendments require federal agencies to issue an interim final rule by July 1, 2016, adjusting their civil monetary penalties for inflation through October of 2015. After this initial “catch-up” adjustment, the agencies must adjust their civil monetary penalties annually for inflation.

The interim final rule sets forth the catch-up adjustments for the penalties enforced by the various agencies in the DOL, including the Employee Benefits Security Administration (EBSA). The rule’s catch-up adjustments apply to penalties assessed after August 1, 2016, whose associated violations occurred after November 2, 2015, the enactment date of the 2015 Inflation Adjustment Act. Violations of Title I of ERISA occurring on or before November 2, 2015, and assessments made on or before August 1, 2016, for violations occurring after November 2, 2015, will continue to be subject to the civil monetary penalty amounts set forth in the DOL’s existing regulations.

Beginning in 2017, the DOL will adjust the new ERISA Title I penalty amounts annually for inflation no later than January 15 of each year. For example, by January 15, 2017, the Department will adjust penalty amounts to reflect any increase in inflation from October, 2015, to October, 2016. EBSA will post any changes to ERISA Title I penalty amounts on its website. Annual inflation adjustments are not subject to notice and rulemaking.