[Federal Register Volume 81, Number 127 (Friday, July 1, 2016)]
[Rules and Regulations]
[Pages 43429-43461]
[FR Doc No: 2016-15378]

Vol. 81

Friday,

No. 127

July 1, 2016

Part IV

Department of Labor

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29 CFR Part 5

41 CFR Part 50-201

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Employment and Training Administration

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20 CFR Part 655

 Office of Workers' Compensation Programs

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20 CFR Parts 702, 725, 726

 Wage and Hour Division

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29 CFR Parts 500, 501, 530, et al.

 Occupational Safety and Health Administration

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29 CFR Parts 1902, 1903

 Employee Benefits Security Administration

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29 CFR Parts 2560, 2575, 2590

 Mine Safety and Health Administration

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30 CFR Part 100

 Department of Labor Federal Civil Penalties Inflation Adjustment Act
Catch-Up Adjustments; Final Rule

Federal Register / Vol. 81 , No. 127 / Friday, July 1, 2016 / Rules
and Regulations

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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 655

Office of Workers' Compensation Programs

20 CFR Parts 702, 725, 726

Office of the Secretary

29 CFR Part 5

41 CFR Part 50-201

Wage and Hour Division

29 CFR Parts 500, 501, 530, 570, 578, 579, 801, 825

Occupational Safety and Health Administration

29 CFR Parts 1902, 1903

Employee Benefits Security Administration

29 CFR Part 2560, 2575, 2590

Mine Safety and Health Administration

30 CFR Part 100

RIN 1290-AA31

Department of Labor Federal Civil Penalties Inflation Adjustment
Act Catch-Up Adjustments

AGENCY: Employment and Training Administration, Office of Workers'
Compensation Programs, Office of the Secretary, Wage and Hour Division,
Occupational Safety and Health Administration, Employee Benefits
Security Administration, and Mine Safety and Health Administration,
Department of Labor.

ACTION: Interim final rule; request for comments.

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SUMMARY: The U.S. Department of Labor is issuing this interim final
rule to adjust the amounts of civil penalties assessed or enforced in
its regulations. The Federal Civil Penalties Inflation Adjustment Act
of 1990 as amended by the Federal Civil Penalties Inflation Adjustment
Act Improvements Act of 2015 (Inflation Adjustment Act) requires
agencies to adjust the levels of civil monetary penalties with an
initial catch-up adjustment, followed by annual adjustments for
inflation. The Department is required to calculate the catch-up and
subsequent annual adjustments based on the Consumer Price Index for all
Urban Consumers. The Department must publish the interim final rule by
July 1, 2016, and the new penalty levels are effective no later than
August 1, 2016.

DATES: This interim final rule is effective August 1, 2016. See
SUPPLEMENTARY INFORMATION for applicability dates. Interested persons
are invited to submit written comments on this interim final rule on or
before August 15, 2016.

ADDRESSES: You may submit comments, identified by Regulatory
Information Number (RIN) 1290-AA31, by either of the following methods:
    Electronic Comments: Comments may be sent via http://www.regulations.gov, a Federal E-Government Web site that allows the
public to find, review, and submit comments on documents that agencies
have published in the Federal Register and that are open for comment.
Simply type in ``Department of Labor Federal Civil Penalties Inflation
Adjustment Act Catch-Up Adjustments'' (in quotes) in the Comment or
Submission search box, click Go, and follow the instructions for
submitting comments.
    Mail: Address written submissions to Tiffany Jones, U.S. Department
of Labor, Room S-2312, 200 Constitution Avenue NW., Washington, DC
20210.
    Instructions: Please submit only one copy of your comments by only
one method. All submissions must include the agency name and RIN,
identified above, for this rulemaking. Please be advised that comments
received will become a matter of public record and will be posted
without change to http://www.regulations.gov, including any personal
information provided. Comments that are mailed must be received by the
date indicated for consideration.
    Docket: For access to the docket to read background documents or
comments, go to the Federal e-Rulemaking Portal at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Pamela Peters, Program Analyst, U.S.
Department of Labor, Room S-2312, 200 Constitution Avenue NW.,
Washington, DC 20210; telephone:<PHONE_NUMBER> (this is not a toll-
free number). Copies of this proposed rule may be obtained in
alternative formats (large print, Braille, audio tape or disc), upon
request, by calling<PHONE_NUMBER> (this is not a toll-free number).
TTY/TDD callers may dial toll-free 1-877-889-5627 to obtain information
or request materials in alternative formats.

SUPPLEMENTARY INFORMATION:

Preamble Table of Contents

I. Regulatory Information
II. Background
III. Section-by-Section Analysis
    A. Employment and Training Administration
    B. Office of Workers' Compensation Programs
    C. Office of the Secretary
    D. Wage and Hour Division
    E. Occupational Safety and Health Administration
    F. Employee Benefits Security Administration
    G. Mine Safety and Health Administration
IV. Paperwork Reduction Act
V. Executive Order 12866: Regulatory Planning and Review, and
Executive Order 13563: Improving Regulation and Regulatory Review
VI. Regulatory Flexibility Act and Small Business Regulatory
Enforcement Fairness Act
VII. Other Regulatory Considerations
    a. The Unfunded Mandates Reform Act of 1995
    b. Executive Order 13132: Federalism
    c. Executive Order 13175: Indian Tribal Governments
    d. The Treasury and General Government Appropriations Act of
1999: Assessment of Federal Regulations and Policies on Families
    e. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    f. Environmental Impact Assessment
    g. Executive Order 13211: Energy Supply
    h. Executive Order 12630: Constitutionally Protected Property
Rights
    i. Executive Order 12988: Civil Justice Reform Analysis

I. Regulatory Information

    The U.S. Department of Labor (Department) is publishing this
interim final rule (IFR) to adjust its civil monetary penalties for
inflation pursuant to the Federal Civil Penalties Inflation Adjustment
Act of 1990 as amended by the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act).
This law requires the Department to publish an initial ``catch-up
adjustment'' through an interim final rule.
    Pursuant to the Inflation Adjustment Act and 5 U.S.C. 553(b)(3)(B),
the Department finds that good cause exists for issuing this IFR
without prior notice and comment. By operation of the Inflation
Adjustment Act, the Department must publish the catch-up adjustment by
July 1, 2016, and the rule must be effective no later than August 1,
2016. The Inflation Adjustment Act further provides that the increased
penalty levels apply to any penalties assessed after the effective date
of the increase. Additionally, the Inflation Adjustment Act provides a
clear

formula for adjustment of the civil penalties, leaving little room for
discretion. For these reasons, the Department finds that notice and
comment would be impracticable and unnecessary in this situation and
contrary to the language of the Inflation Adjustment Act.

II. Background

    On November 2, 2015, the President signed into law the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Pub.
L. 114-74, 701 (Inflation Adjustment Act), which further amended the
Federal Civil Penalties Inflation Adjustment Act of 1990 as previously
amended by the 1996 Debt Collection Improvement Act (collectively, the
``Prior Inflation Adjustment Act''), to improve the effectiveness of
civil monetary penalties and to maintain their deterrent effect. The
Inflation Adjustment Act requires agencies to: (1) Adjust the level of
civil monetary penalties with an initial ``catch-up'' adjustment
through an interim final rulemaking (IFR); and (2) make subsequent
annual adjustments for inflation.
    The Inflation Adjustment Act amends the Prior Inflation Adjustment
Act in two key respects. First, the Inflation Adjustment Act rescinds
an exemption that previously disallowed inflationary adjustments for
violations of the Occupational Safety and Health Act (OSH Act). As a
result, the Department is updating the penalties under the OSH Act for
the first time since 1990.
    Second, the Inflation Adjustment Act substantially revises the
method of calculating inflation adjustments. The Prior Inflation
Adjustment Act required adjustments to civil penalties to be rounded
significantly. For example, a penalty increase that was greater than
$1,000, but less than or equal to $10,000, would be rounded to the
nearest multiple of $1,000. As a result, penalties were increased
infrequently, and when they were finally increased, the amounts of the
increases were sometimes substantial. Over time, this formula caused
most of the Department's penalties to lose value relative to total
inflation for long periods of time, thereby undermining the Prior
Inflation Adjustment Act's purposes of maintaining the deterrent effect
of civil money penalties and promoting compliance with the law.
    The Inflation Adjustment Act has removed these rounding rules; now,
penalties are simply rounded to the nearest dollar. This rounding
ensures that penalties will be increased each year to more effectively
keep up with inflation, and ensures that penalties are more evenly
established.
    Furthermore, the Inflation Adjustment Act provides for an initial
``catch-up'' adjustment that generally excludes prior inflationary
adjustments under the Prior Inflation Adjustment Act. For this catch-up
adjustment, the Inflation Adjustment Act requires agencies to identify,
for each penalty, the year and corresponding amount(s) for which the
penalty amount, the maximum penalty level, or range of minimum and
maximum penalties was established (i.e., originally enacted by Congress
or by regulation) or last adjusted other than pursuant to the Prior
Inflation Adjustment Act. That amount becomes the basis of any such
catch-up adjustment, subject to a cap on any penalty increase of 150
percent of the current penalty amount as of November 2015--allowing for
a total new penalty of no more than 250 percent of the November 2015
penalty amount. The Inflation Adjustment Act also mandates that the
catch-up adjustment apply to any civil monetary penalty assessed after
August 1, 2016, ``including those whose associated violation predated
such increase.'' Pub. L. 114-74 at Sec.  701. The adjusted civil
penalty amounts are applicable only to civil penalties assessed after
August 1, 2016, whose associated violations occurred after November 2,
2015, the date of enactment of the Inflation Adjustment Act. Therefore,
violations occurring on or before November 2, 2015, as well as
assessments made prior to August 1, 2016 whose associated violations
occurred after November 2, 2015, will continue to be subject to the
civil monetary penalty amounts currently set forth in the the
Department's prior regulations at 20 CFR parts 655, 702, 725, and 726;
29 CFR parts 5, 500, 501, 530, 570, 578, 579, 801, 825, 1902, 1903,
2560, 2575, and 2590; 30 CFR part 100; and 41 CFR part 50-201 (or as
set forth by statute if the amount has not yet been adjusted by
regulation)..
    The Department has undertaken a thorough review of civil penalties
administered by its various components pursuant to the Inflation
Adjustment Act and in accordance with guidance issued by the Office of
Management and Budget.\1\ The Department first identified for each
penalty the year and corresponding amount or amounts for which the
maximum penalty level or range of minimum and maximum penalties was
established or last adjusted, other than pursuant to the Prior
Inflation Adjustment Act. Then the Department determined the applicable
inflation adjustments based upon the percent change between the October
Consumer Price Index for all Urban Consumers (CPI-U) for the preceding
year versus the year of enactment or last adjustment.\2\ The Department
compared the amount of the penalty adjustment against the 150 percent
cap and added the lower of the two to the existing penalty to compute
the new penalty. This IFR establishes the initial catch-up adjustment
for civil penalties as described.\3\
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    \1\ OMB Mem. M-16-06 (Feb. 24, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
    \2\ OMB has provided the relevant year-over-year multipliers,
rounded to 5 decimal points. Id. at 6.
    \3\ Appendix 1 consists of a table that provides ready access to
key information about each penalty.
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III. Section-by-Section Analysis

    The following section-by-section discussion of this IFR presents
the contents of each section in more detail. The Department invites
comments on any issues addressed in this IFR.

A. Employment and Training Administration (20 CFR Part 655)

1. General
    This section A of the preamble addresses civil monetary penalties
authorized by the Immigration and Nationality Act's (INA) D-1 and H-1B
visa programs and that are reflected in the Employment and Training
Administration's regulations, but are enforced by the Department's Wage
and Hour Division (WHD). Paragraph 2(a) involves violations of the D-1
visa program, and paragraph 2(b) involves violations of the H-1B visa
program.
2. Specific Penalty Increases
a. Section 655.620--Civil Money Penalties and Other Remedies
    Section 258(c)(4)(E)(i) of the INA, 8 U.S.C. 1288(c)(4)(E)(i), and
existing 20 CFR 655.620(a), provide for the imposition of civil money
penalties where the Secretary of Labor (Secretary) finds, after notice
and an opportunity for hearing, that there has been a violation of, or
misrepresentation in, the attestations by employers using alien
crewmembers for longshore activities in U.S. ports, pursuant to the D-1
visa program, or of the Secretary's regulations regarding the D-1
program. These authorities provide that such civil money penalties are
not to exceed $5,000 for each alien crewmember with respect to whom
there has been a violation. The maximum penalty amount last established
by statute or regulation, other than the Prior Inflation Adjustment
Act, was set in 1990 and is the same as the existing maximum

penalty amount. See Immigration Act of 1990, Pub. L. 101-649, 203(a)(1)
(Nov. 29, 1990).
    To adjust the existing civil money penalty for this section, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 1990 of 1.78156, which resulted in a maximum
penalty of $8,908. The amount of the increase from $5,000 to $8,908 is
$3,908, which is less than the statutory cap of 150 percent of the
existing $5,000 penalty, which is $7,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
655.620(a) is revised to increase the maximum penalty for violations
specified therein from $5,000 to $8,908 for each alien crewmember with
respect to whom there has been a violation.
b. Section 655.810--What remedies may be ordered if violations are
found?
    Section 212(n)(2)(C) of the INA, 8 U.S.C. 1182(n)(2)(C), and
existing 20 CFR 655.810(b) provide for the imposition of civil money
penalties for certain violations of the H-1B visa program. There are
three levels of civil money penalties provided for by these
authorities.
    First, existing Sec.  655.810(b)(1) provides for a civil money
penalty, not to exceed $1,000 per violation, for certain specific
violations of the H-1B program. See Sec.  655.810(b)(1)(i)-(vi). The
maximum penalty amount last established by statute or regulation, other
than the Prior Inflation Adjustment Act, was set in 1990 and is the
same as the existing maximum penalty amount. See Immigration Act of
1990, Pub. L. 101-649, 205(3) (Nov. 29, 1990). In 1998, Congress
amended the INA by, in part, providing for additional civil money
penalties in the H-1B program, as discussed below. See American
Competitiveness and Workforce Improvement Act of 1998 (ACWIA), Div. C,
Title IV, of Pub. L. 105-277, 413(a) (Oct. 21, 1998). The 1998
amendments did not adjust the $1,000 civil money penalty reflected in
existing Sec.  655.810(b)(1). Accordingly, we consider 1990 as the year
in which this maximum penalty amount was last established by statute or
regulation other than the Prior Inflation Adjustment Act.
    To adjust the existing civil money penalty for this section, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 1990 of 1.78156, which resulted in a maximum
penalty of $1,782. The amount of the increase from $1,000 to $1,782 is
$782, which is less than the statutory cap of 150 percent of the
existing $1,000 penalty, which is $1,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
655.810(b)(1) is revised to increase the maximum penalty for violations
specified therein from $1,000 to $1,782 per violation.
    Second, existing Sec.  655.810(b)(2) provides for a civil money
penalty, not to exceed $5,000 per violation for certain willful
violations specified therein and for discrimination against an
employee, as described in 20 CFR 655.801(a). The civil money penalty
for discrimination against an employee is also referenced in Sec.
655.801(b). The maximum penalty amount last established by statute or
regulation other than the Prior Inflation Adjustment Act was set in
1998 and is the same as the existing maximum penalty amount. See ACWIA
Sec.  413(a).
    To adjust the existing civil money penalty for this section, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 1998 of 1.45023, which resulted in a maximum
penalty of $7,251. The amount of the increase from $5,000 to $7,251 is
$2,251, which is less than the statutory cap of 150 percent of the
existing $5,000 penalty, which is $7,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
655.810(b)(2) is revised to increase the maximum penalty for violations
specified therein from $5,000 per violation to $7,251 per violation.
Conforming changes to reflect the adjusted civil money penalty amount
were also made to 20 CFR 655.801(b).
    Third, existing Sec.  655.810(b)(3) provides 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. The maximum penalty amount last established by statute or
regulation other than the Prior Inflation Adjustment Act was set in
1998 and is the same as the existing maximum penalty amount. See ACWIA
Sec.  413(a).
    To adjust the existing civil money penalty for this section, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 1998 of 1.45023, which resulted in a maximum
penalty of $50,758. The amount of the increase from $35,000 to $50,758
is $15,758, which is less than the statutory cap of 150 percent of the
existing $35,000 penalty, which is $52,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
655.810(b)(3) is revised to increase the maximum penalty for violations
specified therein from $35,000 to $50,578 per violation.

B. Office of Workers' Compensation Programs (20 CFR Parts 702, 725,
726)

1. General
    This section B of the preamble addresses the civil monetary
penalties administered by Office of Workers' Compensation Programs
(OWCP) to enforce provisions of the Longshore and Harbor Workers'
Compensation Act (Longshore Act), and the Longshore Act extensions, the
Defense Base Act, the District of Columbia Workmen's Compensation Act,
the Outer Continental Shelf Lands Act, and the Black Lung Benefits Act
(BLBA). Paragraphs 2(a) through (f) explain revisions to each of the
civil penalties administered and enforced by OWCP.
2. Specific Penalty Increases
a. Section 702.204--Employer's Report; Penalty for Failure To Furnish
and or Falsifying
    Existing Sec.  702.201 requires employers to furnish a report of an
employee's injury (resulting in the loss of one or more shifts) or
death within 10 days of the injury or death, or an employer's knowledge
of the same, and to provide additional supplemental information upon
request. Existing Sec.  702.204 provides that an employer who, on or
after November 17, 1997, knowingly and willfully fails or refuses to
file any report required by Sec.  702.201 or who knowingly or willfully
makes a false statement or misrepresentation on any report shall be
subject to a civil penalty not to exceed $11,000 for each failure,
refusal, false statement, or misrepresentation. It provides that an
employer who does so before November 17, 1997 shall be subject to a
civil penalty not to exceed $10,000 for each instance. The maximum
penalty amount last established by statute or regulation other than
pursuant to the Inflation Adjustment Act was $10,000 in 1984. See
Public Law 98-426.
    To adjust the existing civil penalty for this section, the
Department multiplied the penalty amount last established by statute or
regulation other than pursuant to the Inflation Adjustment Act,
$10,000, by the inflation adjustment factor for 1984 of 2.25867, which
resulted in a penalty of $22,587 (rounded to the nearest dollar). The
amount of the increase from existing Sec.  702.204's $11,000 penalty to
$22,587 is $11,587. $11,587 is less than the statutory cap of 150
percent of the

existing $11,000 penalty, which is $16,500. Accordingly, the amount of
the increase is not limited by the statutory cap. For penalties
assessed after August 1, 2016, whose associated violations occurred
after November 2, 2015, final Sec.  702.204 therefore increases the
maximum penalty for each failure to furnish or falsifying an employer's
report from $11,000 to $22,587.
b. Section 702.236--Penalty for Failure To Report Termination of
Payments
    Existing Sec.  702.235 requires employers to notify the district
director within 16 days after making a final payment of compensation.
Existing Sec.  702.236 provides that an employer who, on or after
November 17, 1997, fails to notify the district director that a final
payment of compensation has been made as required by Sec.  702.235,
shall be assessed a civil penalty in the amount of $110. It provides
that an employer who does so before November 17, 1997 shall be assessed
a civil penalty in the amount of $100. The penalty amount last
established by statute or regulation other than pursuant to the
Inflation Adjustment Act was $100 in 1927. See 33 U.S.C. 914(g).
    To adjust the existing civil penalty for this section, the
Department multiplied the penalty amount last established by statute or
regulation other than pursuant to the Inflation Adjustment Act, $100,
by the inflation adjustment factor for 1927 of 13.66885, which resulted
in a penalty of $1,367 (rounded to the nearest dollar). The amount of
the increase from existing Sec.  702.236's $110 penalty to $1,367 is
$1,257, which would be more than the statutory cap of 150 percent of
the existing $110 penalty, which is $165. Accordingly, the amount of
the increase is limited by the statutory cap to a total of $165. For
penalties assessed after August 1, 2016, whose associated violations
occurred after November 2, 2015, final Sec.  702.236 therefore
increases the penalty for failure to report termination of payments
from $110 to $275 (the current $110 penalty amount plus the $165
statutory cap).
c. Section 702.271--Discrimination; Against Employees Who Bring
Proceedings, Prohibition and Penalty
    Existing Sec.  702.271(a)(1) provides that no employer or its agent
may discharge or in any manner discriminate against an employee as to
his or her employment because that employee has claimed or attempted to
claim compensation under the Longshore and Harbor Workers' Compensation
Act, or has testified or is about to testify in a proceeding under that
Act. Existing Sec.  702.271(a)(2) provides that any employer who, on or
after November 17, 1997, violates Sec.  702.271 shall be liable for a
penalty of not less than $1,100 or more than $5,500. It provides that
an employer who does so before November 17, 1997 shall be liable for a
penalty of not less than $1,000 or more than $5,000. The penalty
amounts last established by statute or regulation other than pursuant
to the Inflation Adjustment Act were a minimum amount of $1,000 and a
maximum amount of $5,000 in 1984. See Public Law 98-426.
    To adjust the civil penalties for this section, the Department
multiplied the minimum and maximum penalty amounts last established by
statute or regulation other than pursuant to the Inflation Adjustment
Act, $1,000 and $5,000, respectively, by the inflation adjustment
factor for 1984 of 2.25867, which resulted in a minimum penalty of
$2,259 (rounded to the nearest dollar) and a maximum penalty of $11,293
(rounded to the nearest dollar). The amount of the increase from
existing Sec.  702.271(a)(2)'s $1,100 minimum penalty to $2,259 is
$1,159, which is less than the statutory cap of 150 percent of the
existing $1,100 minimum penalty, which is $1,650. The amount of the
increase from existing Sec.  702.271(a)(2)'s $5,500 maximum penalty to
$11,293 is $5,793. $5,793 is less than the statutory cap of 150 percent
of the existing $5,500 maximum penalty, which is $8,250. Accordingly,
neither the amount of the increased minimum nor the increased maximum
penalty is limited by the statutory cap. For penalties assessed after
August 1, 2016, whose associated violations occurred after November 2,
2015, final Sec.  702.271 therefore increases the minimum penalty for
discrimination against employees who claim compensation or bring
proceedings under the Act from $1,100 to $2,259, and increases the
maximum penalty from $5,500 to $11,293.
    The Department also changes the ``that'' in the first sentence of
Sec.  702.271(a)(2) to ``than'' to correct a typo in the regulation and
twice corrects the phrase ``liable to a penalty'' to ``liable for a
penalty.'' No substantive change results from or is intended by these
technical edits.
d. Section 725.621--Reports
    Existing Sec.  725.621(a) requires employers to notify the district
director upon making a first payment of benefits and upon suspension,
reduction, or increase of payments. Existing Sec.  725.621(b) requires
employers to notify the district director, within 16 days after making
a final payment of benefits. Existing Sec.  724.621(c) allows the
Director to prescribe additional reporting by operators, other
employers, or carriers. Existing Sec.  725.621(d) provides that an
employer who does not file a report required by the section, after
January 19, 2001, shall be subject to a civil penalty not to exceed
$550 for each failure or refusal to file. It provides that an employer
who does so on or before January 19, 2001, shall be subject to a civil
penalty not to exceed $500 for each failure or refusal to file. The
maximum penalty amount last established by statute or regulation other
than pursuant to the Inflation Adjustment Act was $500 in 1978. See
Public Law 95-239.
    To adjust the existing civil penalty for this section, the
Department multiplied the penalty amount last established by statute or
regulation other than pursuant to the Inflation Adjustment Act, $500,
by the inflation adjustment factor for 1978 of 3.54453, which resulted
in a penalty of $1,772 (rounded to the nearest dollar). The amount of
the increase from existing Sec.  725.621(d)'s $550 penalty to $1,772 is
$1,222, which is more than the statutory cap of 150 percent of the
existing $550 penalty, which is $825. Accordingly, the amount of the
increase is limited by the statutory cap to a total of $825. For
penalties assessed after August 1, 2016, whose associated violations
occurred after November 2, 2015, final Sec.  725.261 therefore
increases the maximum penalty for each failure or refusal to furnish an
employer's required report from $550 to $1,375 (the current $550
penalty amount plus the $825 statutory cap).
e. Section 726.300--Purpose and Scope
    Section 423 of the Black Lung Benefits Act and existing Sec.  726.4
require each coal mine operator to secure its liability for benefits
either by qualifying as a self-insurer in accordance with regulations
prescribed by the Secretary, or by insuring and keeping insured the
payment of such benefits with a licensed workers' compensation insurer.
30 U.S.C. 933(a); 20 CFR 726.4. Section 423 also provides that each
coal mine operator failing to meet its insurance obligation shall be
subject to a civil money penalty of up to $1,000 per day. 30 U.S.C.
933(d)(1). Existing Sec.  726.300 identifies the purpose and scope of
Subpart D of Part 726, which is to set forth definitions, criteria, and
procedures for assessing this civil money penalty. In so doing, it
references the Black Lung Benefits Act's maximum daily penalty of
$1,000. This statutory maximum, however, is adjusted by the

Federal Civil Penalties Inflation Adjustment Act of 1990, as amended.
Thus, the existing regulation is amended to refer to the adjusted
penalty amount authorized by the Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended.
f. Section 726.302--Determination of Penalty
    Existing Sec.  726.302 provides the method for determining the
amount of any penalty assessed against a coal mine operator for failure
to secure the payment of benefits in violation of Section 423 of the
Black Lung Benefits Act and existing Sec.  726.4. Existing Sec.
726.302(b) provides that the penalty will be calculated by multiplying
the daily base penalty amount or amounts by the number of days during
which the operator was required to and failed to secure its
obligations. Existing Sec.  726.302(c)(i) explains that the daily base
penalty amount is $100 per day for operators employing fewer than 25
employees, $200 per day for operators employing 25 to 50 employees,
$300 per day for operators employing 51 to 100 employees, and $400 per
day for operators employing more than 100 employees. Existing Sec.
726.302(c)(4) provides that the daily base penalty amounts in Sec.
726.302(c)(2)(i) will increase by $100 on the 11th day after the
operator receives the Director's notice of violation. Existing Sec.
726.302(c)(5) provides that if an operator or certain of its related
entities has violated Sec.  726.4 and been assessed a penalty, the
daily base penalty amount shall increase by $300. It also provides that
an operator who violates Sec.  726.4 after January 19, 2001, shall be
subject to a maximum daily base penalty of $1,100, and that an operator
that violates it on or before January 19, 2001, shall be subject to a
maximum daily base penalty amount of $1,000. The daily base penalty
amounts and increases in paragraphs (c)(2)(i), (c)(4), and (c)(5) were
established by regulation in 2001 and have not subsequently been
increased by the Inflation Adjustment Act or otherwise. See 65 FR
79920. The maximum daily base penalty amount last established by
statute or regulation other than pursuant to the Inflation Adjustment
Act was $1,000 in 1978. See Public Law 95-239.
    To adjust the existing daily base penalty for operators employing
fewer than 25 employees, the Department multiplied the existing $100
penalty by the inflation adjustment factor for 2001 of 1.33842, which
resulted in a penalty of $134 (rounded to the nearest dollar). To
adjust the existing daily base penalty for operators employing 25 to 50
employees, the Department multiplied the existing $200 penalty by the
inflation adjustment factor for 2001 of 1.33842, which resulted in a
penalty of $268 (rounded to the nearest dollar). To adjust the existing
daily base penalty for operators employing 51 to 100 employees, the
Department multiplied the existing $300 penalty by the inflation
adjustment factor for 2001 of 1.33842, which resulted in a penalty of
$402 (rounded to the nearest dollar). To adjust the existing daily base
penalty for operators employing more than 100 employees, the Department
multiplied the existing $400 penalty by the inflation adjustment factor
for 2001 of 1.33842, which resulted in a penalty of $535 (rounded to
the nearest dollar). To adjust the existing daily base penalty increase
for operators who fail to respond to the Director's notice of violation
more than 10 days after receipt in paragraph (c)(4), the Department
multiplied the existing $100 penalty increase by the inflation
adjustment factor for 2001 of 1.33842, which resulted in a penalty
increase of $134 (rounded to the nearest dollar). To adjust the
existing daily base penalty increase for operators who have been
subject to a previous penalty assessment in paragraph (c)(5), the
Department multiplied the existing $300 penalty increase by the
inflation adjustment factor for 2001 of 1.33842, which resulted in a
penalty increase of $402 (rounded to the nearest dollar). The
Department has not previously updated these penalty amounts pursuant to
the Inflation Adjustment Act and the multiplier for each (1.33842) is
less than 2.5, the penalty amount (100 percent) plus the statutory cap
(150 percent). Thus, the amount of the increase for each is necessarily
less than the statutory cap of 150 percent of the existing penalty
amount. For penalties assessed after August 1, 2016, whose associated
violations occurred after November 2, 2015, final Sec.  726.302
therefore increases the daily base penalty for operators employing
fewer than 25 employees from $100 to $134; increases the daily base
penalty for operators employing 25 to 50 employees from $200 to $268;
increases the daily base penalty for operators employing 51 to 100
employees from $300 to $402; increases the daily base penalty for
operators employing more than 100 employees from $400 to $535;
increases the daily base penalty increase for operators who continue to
be in violation more than 10 days after receiving the Director's notice
of violation from $100 to $134; and increases the daily base penalty
increase for operators who have been subject to a previous penalty
assessment from $300 to $402.
    To adjust the existing maximum daily base penalty in paragraph
(c)(5), the Department multiplied the penalty amount last established
by statute or regulation other than pursuant to the Inflation
Adjustment Act, $1,000, by the inflation adjustment factor for 1978 of
3.54453, which resulted in a penalty of $3,545 (rounded to the nearest
dollar). The amount of the increase from existing Sec.  726.302(c)(5)'s
$1,100 maximum penalty to $3,545 is $2,445, which is more than the
statutory cap of 150 percent of the existing $1,100 penalty, which is
$1,650. Accordingly, the amount of the increase is limited by the
statutory cap to a total of $1,650. For penalties assessed after August
1, 2016, whose associated violations occurred after November 2, 2015,
final Sec.  726.302 therefore increases the maximum daily base penalty
for any violation of Sec.  726.4 from $1,100 to $2,750 (the current
$1,100 penalty amount plus the $1,650 statutory cap).
    The Department also moves discussion of the maximum daily base
penalty from subparagraph (c)(5) to new subparagraph (c)(6) for greater
clarity. No substantive change results from or is intended by this
technical edit.

C. Office of the Secretary (29 CFR Part 5 and 41 CFR Part 50-201)

1. General
    This section C of the preamble addresses the civil monetary
penalties provisions of the Contract Work Hours and Safety Standards
Act (CWHSSA) and the Walsh-Healey Public Contracts Act (PCA), as
amended. These provisions are included in regulations established by
the Office of the Secretary, which have been delegated to WHD for
enforcement. Paragraphs 2(a) and (b) explain revisions to each of these
civil money penalties.
2. Specific Penalty Increases
a. Section 5.8(a)--Liquidated Damages Under the Contract Work Hours and
Safety Standards Act
    Section 3702(c) of title 40 of the United States Code and existing
29 CFR 5.8(a) impose ``liquidated damages'' if a laborer or mechanic is
not paid wages at a rate not less than one and one-half times the basic
rate of pay for all hours worked in excess of forty hours in any
workweek on contracts covered by CWHSSA, to be computed with respect to
each laborer or mechanic employed

in violation of CWHSSA.\4\ The penalty amount of $10 for each calendar
day in the workweek on which such individual was required or permitted
to work in excess of forty hours without payment of required overtime
wages was last established by statute or regulation other than the
Prior Inflation Adjustment Act in 1962 and is the same as the existing
penalty amount. See Contract Work Hours Standards Act, Title I of
Public Law 87-581, Sec.  102(b)(2) (Aug. 13, 1962).
---------------------------------------------------------------------------

    \4\ Although the statute and regulation refer to the amount
assessed as ``liquidated damages'' it is appropriate to treat the
amount as a civil money penalty for purposes of the Inflation
Adjustment Act because the amount due is paid to the government, not
the laborer or mechanic. Indeed, the Department of Labor has long
recognized that the CWHSSA damages provision ``operate[s] as [a]
civil monetary penalt[y].'' Letter to Honorable Carl Levin,
Chairman, Subcommittee on Oversight of Government Management, from
Ann McLaughlin, Secretary of Labor, (Feb. 22, 1988).
---------------------------------------------------------------------------

    To adjust the existing penalty for this section, the Department
multiplied that penalty amount of $10 by the inflation adjustment
factor for 1962 of 7.82362, which would have resulted in a penalty of
$78. The amount of the increase from $10 to $78 is $68, which exceeds
the statutory cap of 150 percent of the existing $10, which is $15;
accordingly, the amount of the increase is limited by the statutory cap
to a total of $15. Consequently, Sec.  5.8(a) is revised to increase
the penalty if a laborer or mechanic is not paid wages at least one and
one-half times the basic rate of pay for all hours worked in excess of
forty hours in any workweek from $10 to $25 for each calendar day in
the workweek on which such individual was required or permitted to work
in excess of forty hours without payment of required overtime wages.
Conforming changes to reflect the adjusted penalty amount were also
made to Sec.  5.5(b)(2).
b. Section 50-201.3--Public Contracts, Department of Labor; Insertion
of Stipulations.
    Section 6503(b)(1) of title 41 of the United States Code and
existing 41 CFR 50-201.3(e) impose ``liquidated damages'' \5\ of $10
per day for each individual under 16 years of age and each incarcerated
individual knowingly employed in the performance of a contract covered
by the PCA, as amended. The penalty amount of $10 for each day and for
each individual under 16 years of age and each incarcerated individual
knowingly employed was last established by statute or regulation other
than the Prior Inflation Adjustment Act in 1936 and is the same as the
existing penalty amount. See Walsh-Healey Act of 1936, 49 Stat. 2036,
Sec.  2 (June 30, 1936).
---------------------------------------------------------------------------

    \5\ Although the statute and regulation refer to the amount
assessed as ``liquidated damages'' it is appropriate to treat the
amount as a civil money penalty for purposes of the Inflation
Adjustment Act because the amount due is paid to the government, not
the worker. Indeed, the Department of Labor has long recognized that
the Walsh-Healey Public Contracts Act damages provision ``operate[s]
as [a] civil monetary penalt[y].'' Letter to Honorable Carl Levin,
Chairman, Subcommittee on Oversight of Government Management, from
Ann McLaughlin, Secretary of Labor, (Feb. 22, 1988).
---------------------------------------------------------------------------

    To adjust the existing civil money penalty for this section, the
Department multiplied that penalty amount of $10 by the inflation
adjustment factor for 1936 of 16.98843, which would have resulted in a
penalty of $170. The amount of the increase from $10 to $170 is $160,
which exceeds the statutory cap of 150 percent of the existing $10
penalty, which is $15. Accordingly, the amount of the increase is
limited by the statutory cap to a total of $15. Consequently, Sec.  50-
201.3(e) is revised to increase the penalty for the knowing employment
on a covered contract of individuals under 16 or who are incarcerated
from $10 to $25 per day.

D. Wage and Hour Division (29 CFR Parts 500, 501, 530, 570, 578, 579,
801, 825)

1. General
    This section D of the preamble addresses the civil monetary
penalties administered by WHD to enforce provisions of the Migrant and
Seasonal Agricultural Worker Protection Act, the Immigration and
Nationality Act,\6\ the Fair Labor Standards Act, the Employee
Polygraph Protection Act, and the Family and Medical Leave Act.
Paragraphs 2(a) through (g) explain revisions to each of these civil
penalties administered and enforced by WHD.
---------------------------------------------------------------------------

    \6\ The Department and the Department of Homeland Security are
jointly publishing a separate IFR to implement the Inflation
Adjustment Act's requirements with respect to the civil money
penalty provisions found at 29 CFR 503.23.
---------------------------------------------------------------------------

a. Section 500.1--Purpose and Scope
    Section 503(a)(1) of the Migrant and Seasonal Agricultural Worker
Protection Act (MSPA), 29 U.S.C. 1853(a)(1), and existing 29 CFR
500.1(e), authorize the Secretary to impose a civil money penalty of
not more than $1,000 per violation on persons who violate MSPA or any
regulation under MSPA. The maximum penalty amount last established by
statute or regulation other than the Prior Inflation Adjustment Act was
set in 1983 and is the same as the existing maximum penalty amount. See
MSPA, Public Law 97-470 (Jan. 14, 1983).
    To adjust the existing civil money penalty for this paragraph, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 1983 of 2.35483, which resulted in a maximum
penalty of $2,355. The amount of the increase from $1,000 to $2,355 is
$1,355, which is less than the statutory cap of 150 percent of the
existing $1,000 penalty, which is $1,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
500.1(e) is revised to increase the maximum penalty for violations of
MSPA or the MSPA regulations from $1,000 to $2,355 per violation.
b. Section 501.19--Civil Money Penalty Assessment
    Section 218(g)(2) of the INA, 8 U.S.C. 1188(g)(2), authorizes the
Secretary of Labor to impose appropriate penalties in order to assure
employer compliance with the terms and conditions of employment under
the H-2A visa program. Pursuant to this and other authorities, the
Secretary has promulgated regulations through notice and comment
rulemaking regarding the assessment of civil money penalties. See,
e.g., Final Rule, Temporary Agricultural Employment of H-2A Aliens in
the United States, 75 FR 6884 (Feb. 12, 2010) (codified at 29 CFR part
501 and 20 CFR part 655) (2010 H-2A Final Rule). 29 CFR 501.19(a) of
these regulations provides for the imposition of civil money penalties
for each violation of the work contract, or the obligations imposed by
8 U.S.C. 1188, 20 CFR part 655, subpart B, or the regulations in 29 CFR
part 501. Section 501.19(c) through (f) provides the maximum civil
money penalty amounts for various violations as specified below.
    First, existing Sec.  501.19(c) provides that a civil money penalty
for each violation of the work contract or of the H-2A visa program's
statutory or regulatory requirements will not exceed $1,500 per
violation, with exceptions as specified below. The maximum penalty
amount last established by statute or regulation other than the Prior
Inflation Adjustment Act was set in 2010 and is the same as the
existing maximum penalty amount. See 2010 H-2A Final Rule.
    To adjust the existing civil money penalty for Sec.  501.19(c), the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 2010 of 1.08745, which resulted in a maximum
penalty of $1,631. The amount of the increase from $1,500 to $1,631 is
$131, which is less than the statutory cap of 150 percent of

the existing $1,500 penalty, which is $2,250; accordingly, the amount
of the increase is not limited by the statutory cap. Consequently,
Sec.  501.19(c) is revised to increase the maximum penalty for
violations specified therein from $1,500 to $1,631 per violation.
    Second, existing Sec.  501.19(c)(1) provides that a civil money
penalty for each willful violation of the work contract, of the H-2A
visa program's statutory or regulatory requirements, or for each act of
discrimination prohibited by Sec.  501.4 shall not exceed $5,000. The
maximum penalty amount last established by statute or regulation other
than the Prior Inflation Adjustment Act was set in 2008 and is the same
as the existing maximum penalty amount. See Final Rule, Temporary
Agricultural Employment of H-2A Aliens in the United States;
Modernizing the Labor Certification Process and Enforcement, 73 FR
77,110 (Dec. 18, 2008) (2008 H-2A Final Rule). This penalty amount was
not adjusted by the H-2A 2010 Final Rule. Accordingly, we consider 2008
as the year in which this maximum penalty amount was last established
by statute or regulation other than the Prior Inflation Adjustment Act.
    To adjust the existing civil money penalty for Sec.  501.19(c)(1),
the Department multiplied that maximum penalty amount by the inflation
adjustment factor for 2008 of 1.09819, which resulted in a maximum
penalty of $5,491. The amount of the increase from $5,000 to $5,491 is
$491, which is less than the statutory cap of 150 percent of the
existing $5,000 penalty, which is $7,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
501.19(c)(1) is revised to increase the maximum penalty for violations
specified therein from $5,000 to $5,491.
    Third, existing Sec.  501.19(c)(2) provides that a civil money
penalty for a violation of a housing or transportation safety and
health provision of the work contract or of the H-2A visa program's
statutory or regulatory requirements that proximately causes the death
or serious injury of any worker shall not exceed $50,000 per worker.
The maximum penalty amount last established by statute or regulation
other than the Prior Inflation Adjustment Act was set in 2010 and is
the same as the existing maximum penalty amount. See 2010 H-2A Final
Rule.
    To adjust the existing civil money penalty for Sec.  501.19(c)(2),
the Department multiplied that maximum penalty amount by the inflation
adjustment factor for 2010 of 1.08745, which resulted in a maximum
penalty of $54,373. The amount of the increase from $50,000 to $54,373
is $4,373, which is less than the statutory cap of 150 percent of the
existing $50,000 penalty, which is $75,000; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
501.19(c)(2) is revised to increase the maximum penalty for violations
specified therein from $50,000 to $54,373 per worker.
    Fourth, existing Sec.  501.19(c)(4) provides that a civil money
penalty for a repeat or willful violation of a housing or
transportation safety and health provision of the work contract or of
the H-2A visa program's statutory or regulatory requirements that
proximately causes the death or serious injury of any worker shall not
exceed $100,000 per worker. The maximum penalty amount last established
by statute or regulation other than the Prior Inflation Adjustment Act
was set in 2010 and is the same as the existing maximum penalty amount.
See 2010 H-2A Final Rule.
    To adjust the existing civil money penalty for Sec.  501.19(c)(4),
the Department multiplied that maximum penalty amount by the inflation
adjustment factor for 2010 of 1.08745, which resulted in a maximum
penalty of $108,745. The amount of the increase from $100,000 to
$108,745 is $8,745, which is less than the statutory cap of 150 percent
of the existing $100,000 penalty, which is $150,000; accordingly, the
amount of the increase is not limited by the statutory cap.
Consequently, Sec.  501.19(c)(4) is revised to increase the maximum
penalty for violations specified therein from $100,000 to $108,745 per
worker.
    Fifth, existing Sec.  501.19(d) provides that a civil money penalty
for failure to cooperate with a WHD investigation shall not exceed
$5,000 per investigation. The maximum penalty amount last established
by statute or regulation other than the Prior Inflation Adjustment Act
was set in 2008 and is the same as the existing maximum penalty amount.
See 2008 H-2A Final Rule. This penalty amount was not adjusted by the
H-2A 2010 Final Rule. Accordingly, we consider 2008 as the year in
which this maximum penalty amount was last established by statute or
regulation other than the Prior Inflation Adjustment Act.
    To adjust the existing civil money penalty for Sec.  501.19(d), the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 2008 of 1.09819, which resulted in a maximum
penalty of $5,491. The amount of the increase from $5,000 to $5,491 is
$491, which is less than the statutory cap of 150 percent of the
existing $5,000 penalty, which is $7,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
501.19(d) is revised to increase the maximum penalty for failure to
cooperate with a WHD investigation from $5,000 to $5,491 per
investigation.
    Sixth, existing Sec.  501.19(e) provides that a civil money penalty
for laying off or displacing any U.S. worker employed, under the
circumstances specified therein, shall not exceed $15,000 per violation
per worker. The maximum penalty amount last established by statute or
regulation other than the Prior Inflation Adjustment Act was set in
2010 and is the same as the existing maximum penalty amount. See 2010
H-2A Final Rule.
    To adjust the existing civil money penalty for Sec.  501.19(e), the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 2010 of 1.08745, which resulted in a maximum
penalty of $16,312. The amount of the increase from $15,000 to $16,312
is $1,312, which is less than the statutory cap of 150 percent of the
existing $15,000 penalty, which is $22,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
501.19(e) is revised to increase the maximum penalty for violations
specified therein from $15,000 to $16,312 per violation per worker.
    Finally, existing Sec.  501.19(f) provides that a civil money
penalty for improperly rejecting a U.S. worker who is an applicant for
employment, in violation of the H-2A visa program's statutory or
regulatory requirements, shall not exceed $15,000 per violation per
worker. The maximum penalty amount last established by statute or
regulation other than the Prior Inflation Adjustment Act was set in
2010 and is the same as the existing maximum penalty amount. See 2010
H-2A Final Rule.
    To adjust the existing civil money penalty for Sec.  501.19(f), the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 2010 of 1.08745, which resulted in a maximum
penalty of $16,312. The amount of the increase from $15,000 to $16,312
is $1,312, which is less than the statutory cap of 150 percent of the
existing $15,000 penalty, which is $22,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
501.19(f) is revised to increase the maximum penalty for violations

specified therein from $15,000 to $16,312 per violation per worker.
c. Section 530.302--Amounts of Civil Money Penalties
    Section 11(d) of the Fair Labor Standards Act (FLSA), 29 U.S.C.
211(d), authorizes the Administrator of the WHD to issue such
regulations and orders as necessary to assure compliance with the
FLSA's requirements with respect to industrial homework. Pursuant to
this and other authorities, the Administrator has promulgated
regulations through notice and comment rulemaking. See Final Rule,
Employment of Homeworkers in Certain Industries; Records To Be Kept by
Employers, 53 FR 45706 (Nov. 10, 1988) (codified at 29 CFR parts 516
and 530). Section 530.302 of these regulations provides for the
imposition of civil money penalties. Existing Sec.  530.302(a) imposes
a civil money penalty of not more than $500 per affected homeworker for
any violation of the FLSA related to homework \7\, or of part 530, or
of the assurances given in connection with the issuance of a homeworker
certificate. Existing Sec.  530.302(b) states that the amount of civil
money penalties shall be determined per affected homeworker within the
limits set forth in a following table, except that no penalty shall be
assessed in the case of violations which are deemed to be de minimis in
nature. The table appears in the existing regulation as follows in
Table A:
---------------------------------------------------------------------------

    \7\ Except for child labor violations, which are covered under
29 CFR part 579.

                                      Table A--Existing Homework Penalties
----------------------------------------------------------------------------------------------------------------
                                                                          Penalty per affected homeworker
                                                                 -----------------------------------------------
                       Nature of violation                                                           Repeated,
                                                                       Minor        Substantial   intentional or
                                                                                knowing
----------------------------------------------------------------------------------------------------------------
Recordkeeping...................................................         $10-100        $100-200        $200-500
Monetary violations.............................................         $10-100        $100-200  ..............
Employment of homeworkers without a certificate.................  ..............        $100-200        $200-500
Other violations of statutes, regulations or employer assurances         $10-100        $100-200        $200-500
----------------------------------------------------------------------------------------------------------------

The maximum penalty amount last established by statute or regulation
other than the Prior Inflation Adjustment Act was $500 in 1988 and is
the same as the existing maximum penalty amount. See 53 FR 45706,
45724.
    To adjust the existing civil money penalty for this section, the
Department multiplied the maximum penalty amount of $500 by the
inflation adjustment factor for 1988 of 1.97869, which resulted in a
maximum penalty of $989. The amount of the increase from $500 to $989
is $489, which is less than the statutory cap of 150 percent of the
existing $500 penalty, which is $750; accordingly, the amount of the
increase is not limited by the statutory cap. Consequently, Sec.
530.302(a) and (b) are revised to increase the maximum penalty from
$500 to $989 and the percentage of that maximum penalty amount for
minor (2 percent to 20 percent); substantial (20 percent to 40
percent); or repeated, intentional, or knowing (40 percent to 100
percent) violations by the same percentages of the adjusted maximum
penalty amount as under the existing section. As a result, the revised
penalty amounts are $20-198 for a minor violation; $198-396 for a
substantial violation; and $396-989 for a repeated, intentional, or
knowing violation.
d. Section 578.3--What types of violations may result in a penalty
being assessed?
    Section 16(e)(2) of the FLSA, 29 U.S.C. 216(e)(2), and existing 29
CFR 578.3(a), provide for the assessment of civil money penalties for
any person who repeatedly or willfully violates section 6 (minimum
wage) or section 7 (overtime) of the FLSA. Existing Sec.  578.3(a)
provides for a civil money penalty of up to $1,100 per violation, and
that level is the result of an inflation adjustment in 2001. See Final
Rule, Adjustment of Civil Money Penalties for Inflation, 66 FR 63501
(Dec. 7, 2001). The maximum penalty amount last established by statute
or regulation other than the Prior Inflation Adjustment Act was $1,000
in 1989. See Fair Labor Standards Amendments of 1989, Pub. L. 101-157,
Sec.  9 (Nov. 17, 1989).
    To adjust the existing civil money penalty for this paragraph, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 1989 of 1.89361, which resulted in a maximum
penalty of $1,894. The amount of the increase from $1,100 to $1,894 is
$794, which is less than the statutory cap of 150 percent of the
existing $1,100 penalty, which is $1,650; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
578.3(a) is revised to increase the maximum penalty for a repeated or
willful violation of section 6 (minimum wage) or section 7 (overtime)
of the FLSA from $1,100 to $1,894 per violation.
    Conforming changes to reflect the adjusted maximum civil money
penalty amount were also made to Sec.  579.1(a)(2). In addition,
historical information concerning penalties for repeated or willful
violations of Sections 6 or 7 of the FLSA contained in 29 CFR 578.1 is
revised to reflect the passage of the Federal Civil Penalties Inflation
Adjustment Act Improvement Act of 2015 (Pub. L. 114-74) and its
requirement to make civil money penalty adjustments annually.
e. Section 579.1--Purpose and Scope
    Section 16(e)(1)(A) of the FLSA and existing 29 CFR 579.1(a)(1)(i)
provide for the imposition of civil money penalties for any violations
of the provisions of sections 12 or 13(c) of the FLSA, relating to
child labor, or any regulation issued pursuant to such sections. There
are three levels of civil money penalties provided for by these
authorities.
    First, existing Sec.  579.1(a)(1)(i)(A) provides for a civil money
penalty, not to exceed $11,000, for each employee who was the subject
of a child labor violation. This penalty corresponds to the statutory
provision at 29 U.S.C. 216(e)(1)(A)(i). The penalty amount last
established by statute or regulation for this provision other than the
Prior

Inflation Adjustment Act was $11,000 in 2008. See Genetic Information
Nondiscrimination Act of 2008 (GINA), Pub. L. 110-233, Sec.  302(a)
(May 21, 2008).
    To adjust the existing civil money penalty for this paragraph, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 2008 of 1.09819, which resulted in a maximum
penalty of $12,080. The amount of the increase from $11,000 to $12,080
is $1,080, which is less than the statutory cap of 150 percent of the
existing $11,000 penalty, which is $16,500; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
579.1(a)(1)(i)(A) is revised to increase the maximum penalty for
violations of the provisions of sections 12 or 13(c) of the FLSA,
relating to child labor, or any regulation issued pursuant to such
sections, from $11,000 to $12,080 for each employee who was the subject
of such a violation.
    Conforming changes to reflect the adjusted maximum civil money
penalty amount were also made to 29 CFR 570.140(b)(1).
    Second, existing Sec.  579.1(a)(1)(i)(B) provides for a civil money
penalty, not to exceed $50,000, for each violation of section 12 or
13(c) of the FLSA, relating to child labor, or any regulation issued
pursuant to those sections that causes the death or serious injury of
any employee under the age of 18 years. This penalty corresponds to the
statutory provision at 29 U.S.C. 216(e)(1)(A)(ii). That maximum amount
was last established by statute or regulation other than the Prior
Inflation Adjustment Act in 2008 and is the same as the existing
maximum penalty amount. See GINA Sec.  302(a).
    To adjust the existing civil money penalty for this paragraph, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 2008 of 1.09819, which resulted in a maximum
penalty of $54,910. The amount of the increase from $50,000 to $54,910
is $4,910, which is less than the statutory cap of 150 percent of the
existing $50,000 penalty, which is $75,000; accordingly, the amount of
the increase is not limited by the statutory cap. Consequently, Sec.
579.1(a)(1)(i)(B) is revised to increase the maximum penalty for
violations of that provision, from $50,000 to $54,910 for each such
violation.
    Section 579.5(a) has also been revised to remove superfluous
language regarding the effective date of this civil money penalty.
Conforming changes to reflect the adjusted maximum civil money penalty
amount were also made to 29 CFR 570.140(b)(2).
    Third, existing Sec.  579.1(a)(1)(i)(B) also provides that the
maximum penalty for a violation of section 12 or 13(c) of the FLSA,
relating to child labor, or any regulation issued pursuant to those
sections that causes the death or serious injury of any employee under
the age of 18 years may be doubled if the violation is repeated or
willful. Therefore, under revised Sec.  579.1(a)(1)(i)(B), the maximum
penalty amount for such a willful or repeated violation is calculated
by doubling the adjusted penalty of $54,910 for a child labor violation
resulting in serious injury or death (i.e., $109,820). No change to
regulatory text is needed to make this adjustment.
    In addition, existing Sec.  579.1(a) and (b) are revised to reflect
the passage of the Federal Civil Penalties Inflation Adjustment Act
Improvement Act of 2015 (Pub. L. 114-74) and its requirement to make
civil money penalty adjustments annually, and to remove superseded
information regarding the effective date of increased civil money
penalties.
f. Section 801.42--Civil Money Penalties--Assessment
    Section 6(a)(1) of the Employee Polygraph Protection Act of 1988
(EPPA), 29 U.S.C. 2005(a)(1) and existing 29 CFR 801.42(a) impose a
civil money penalty of not more than $10,000 for any violation of the
EPPA or of part 801. The maximum penalty amount last established by
statute or regulation other than the Prior Inflation Adjustment Act was
$10,000 in 1988 and is the same as the existing maximum penalty amount.
See EPPA, Pub. L. 100-347 (June 27, 1988).
    To adjust the existing civil money penalty for this section, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 1988 of 1.97869, which resulted in a penalty of
$19,787. The amount of the increase from $10,000 to $19,787 is $9,787,
which is less than the statutory cap of 150 percent of the existing
$10,000 penalty, which is $15,000; accordingly, the amount of the
increase is not limited by the statutory cap. Consequently, Sec.
801.42(a) is revised to increase the maximum penalty for a violation of
the EPPA from $10,000 to $19,787.
g. Section 825.300--Employer Notice Requirements
    Section 109(b) of the Family and Medical Leave Act (FMLA), as
amended, 29 U.S.C. 2619(b), and existing 29 CFR 825.300(a)(1) provide
for the assessment of a civil money penalty for each willful violation
of the posting requirement of the FMLA. Existing Sec.  825.300(a)(1)
provides for a civil money penalty of up to $110 for each separate
offense, and that level is the result of an inflation adjustment in
2008. See Final Rule, The Family and Medical Leave Act of 1993, 73 FR
67934 (Nov. 17, 2008). The penalty amount last established by statute
or regulation other than the Prior Inflation Adjustment Act was $100 in
1993. See FMLA of 1993, Pub. L. 103-3, Sec.  109(b) (Feb. 5, 1993).
    To adjust the existing civil money penalty for this paragraph, the
Department multiplied that maximum penalty amount by the inflation
adjustment factor for 1993 of 1.63238, which resulted in a maximum
penalty of $163. The amount of the increase from $110 to $163 is $53,
which is less than the statutory cap of 150 percent of the existing
$110 penalty, which is $165; accordingly, the amount of the increase is
not limited by the statutory cap. Consequently, Sec.  578.300(a)(1) is
revised to increase the penalty for violations of the posting
requirement of the FMLA from $110 to $163 for each separate offense.

E. Occupational Safety and Health Administration (29 CFR Parts 1902,
1903)

1. General
    This section E of the preamble addresses the civil monetary
penalties administered by the Occupational Safety and Health
Administration (OSHA) to enforce provisions of the Occupational Safety
& Health Act of 1970 (OSH Act), as amended. Paragraph 2(a) explains
conforming edits to the agency's State Plan regulations. Paragraph 2(b)
explains revisions to each of the civil penalties administered and
enforced by OSHA.
2. Specific Penalty Increases
a. Section 1902.4(c)(2)(xi)--Indices of Effectiveness
    Section 18(c)(2) of the OSH Act provides that a State may assume
responsibility for development and enforcement of its own occupational
safety and health standards by submitting a State Plan. State Plan
regulations at 29 CFR 1902.3(c)(1) and (d)(1) provide that State Plans
must develop or adopt occupational safety and health standards and an
enforcement program for those standards that are at least as effective
as federal OSHA's standards and enforcement program. Existing Sec.
1902.4(c)(2)(xi) provides that in order to satisfy this requirement of

effectiveness, State Plans must have effective sanctions, such as those
prescribed in the OSH Act. This IFR amends Sec.  1902.4(c)(2)(xi) to
clarify that State Plans must provide sanctions as effective as those
set forth in the OSH Act and in Sec.  1903.15(d), against private-
sector employers who violate State standards and orders.
b. Section 1903.15--OSH Act Penalties
    The penalty amounts set forth in section 17(a) to (d) and (i) of
the OSH Act (29 U.S.C. 666(a) to (d) and (i)) were last updated by the
Omnibus Budget Reconciliation Act of 1990 on November 5, 1990. Pub. L.
101-508. To adjust the civil penalties for Section 17(a) to (d) and
(i), the Department multiplied the penalty amounts by the inflation
adjustment factor for 1990 of 1.78156. None of the resulting penalty
amounts exceeded the 150 percent statutory cap. Other references to
penalty amounts in Part 1903 are also amended by the new penalty
amounts set out in Sec.  1903.15(d).
i. Willful or Repeated Violation of the OSH Act, 29 U.S.C 666(a)
    Section 17(a) of the OSH Act, 29 U.S.C 666(a), provides that
employers who willfully or repeatedly violate the requirements of
section 5 of the OSH Act, any standards, rules or orders promulgated
under section 6 of the OSH Act, or applicable regulations may be
assessed a civil penalty of not more than $70,000 for each violation,
but not less than $5,000 for each willful violation. No minimum penalty
is set forth in the OSH Act for repeated violations. To adjust the
existing civil money penalty for this paragraph, the Department
multiplied the penalty amounts by the inflation adjustment factor for
1990 of 1.78156, which resulted in a maximum penalty of $124,709 for
willful and repeated violations, and a minimum penalty of $8,908 for
willful violations. The updated civil monetary penalties for willful
and repeated violations are set out in Sec.  1903.15(d)(1) and (2).
ii. Serious Violation of the OSH Act of 1970, 29 U.S.C 666(b)
    Section 17(b) of the OSH Act, 29 U.S.C 666(b), provides that
employers who have received a citation for a serious violation of the
requirements of section 5 of the OSH Act, of any standard, rule, or
order promulgated under section 6 of the OSH Act, or applicable
regulations may be assessed a civil penalty up to $7,000 for each
violation. After applying the inflation adjustment factor, the penalty
amounts were rounded to the nearest dollar, which resulted in a maximum
penalty of $12,471. The updated maximum civil monetary penalty for
serious violations is set out in Sec.  1903.15(d)(3).
iii. Other-Than-Serious Violation of the OSH Act of 1970, 29 U.S.C
666(c)
    Section 17(c) of the OSH Act, 29 U.S.C 666(c), provides that
employers who have received a citation for a violation of the
requirements of section 5 of the OSH Act, any standard, rule or order
promulgated under section 6 of the OSH Act, or applicable regulations,
and such violation is determined not to be of a serious nature, may be
assessed a civil penalty of up to $7,000 for each violation. After
applying the inflation adjustment factor, the penalty amounts were
rounded to the nearest dollar, which resulted in a maximum penalty of
$12,471 for each day during which such failure or violation continues.
The updated maximum civil monetary penalty for other-than-serious
violations is set out in Sec.  1903.15(d)(4).
iv. Failure To Correct a Violation of the OSH Act of 1970, 29 U.S.C
666(d)
    Section 17(d), 29 U.S.C 666(d), provides that any employer who
fails to correct a violation for which a citation has been issued under
section 9(a) of the OSH Act within the period permitted for the
correction may be assessed a civil penalty of not more than $7,000 for
each day during which such failure or violation continues. After
applying the inflation adjustment factor, the penalty amounts are
rounded to the nearest dollar, which resulted in a maximum penalty of
$12,471. The updated maximum civil monetary penalty for failing to
correct a violation is set out in Sec.  1903.15(d)(5).
v. Violation of a Posting Requirement of the OSH Act of 1970, 29 U.S.C
666(i)
    Section 17(i) of the OSH Act, 29 U.S.C. 666(i), provides that
employers who violate any of the posting requirements, as prescribed
under provisions of the OSH Act, shall be assessed a civil penalty of
up to $7,000 for each violation. After applying the inflation
adjustment factor, the penalty amounts are rounded to the nearest
dollar, which resulted in a maximum penalty of $12,471. The updated
maximum civil monetary penalty for violations of the posting
requirements is set out in Sec.  1903.15(d)(6).

F. Employee Benefits Security Administration (29 CFR Part 2560, 2575,
2590)

1. General
    This section F of the preamble addresses the civil monetary
penalties administered by EBSA to enforce title I of the Employee
Retirement Income Security Act of 1974, as amended, (ERISA). Paragraph
2(a) explains how the Department determined the date each civil
monetary penalty was last adjusted by law or regulation (other than the
Prior Inflation Adjustment Act, as amended), and Paragraph 2(b)
describes the calculation of the catch-up adjustment for each ERISA
civil monetary penalty through the use of a table. Paragraph 2(c)
addresses the restructuring of 29 CFR part 2575 and other technical
changes to the Department's regulations needed to reflect the
amendments made to the Prior Inflation Adjustment Act by the Inflation
Adjustment Act.
2. Specific Penalty Increases
a. Determination of Date Civil Monetary Penalty was Last Adjusted by
Law or Regulation (Other Than the Prior Inflation Adjustment Act)
    Section 5(b)(2)(B) of the Inflation Adjustment Act states that the
initial cost-of-living adjustment (i.e., catch-up adjustment) shall be
applied to the ``amount of the civil monetary penalty as it was most
recently established or adjusted under a provision of law other than
the [Prior Inflation Adjustment Act].'' OMB guidance clarifies that the
definition of the term ``law'' includes regulations where the statute
grants the agency authority to establish a penalty or the dollar amount
of the penalty by regulation. The Department has determined that no
ERISA penalty amount has been adjusted by regulation or statute (other
than the Prior Inflation Adjustment Act) subsequent to the enactment of
the statute that established the initial amount of the penalty.
    Certain ERISA civil monetary penalties apply to violations of more
than one ERISA provision. For example, new violations of ERISA were
subsequently added to the civil penalty provisions of sections
502(c)(4), and 502(c)(7).\8\ The addition of a violation to an existing
penalty statute neither establishes nor adjusts the ``amount of the
civil monetary penalty'' within the meaning of section 5(b)(2)(B) of
the Inflation Adjustment Act. Because no ERISA civil monetary penalty
amount has been adjusted by law (other than the Prior Inflation
Adjustment Act) subsequent to its establishment, the enactment date of
an ERISA penalty statute rather than the date a violation first becomes
subject to the penalty

determines both the amount of and the date from which the penalty is
adjusted. For example, a failure to furnish certain multiemployer plan
financial and actuarial information upon request under section 101(k)
of ERISA will be subject to a penalty under ERISA section 502(c)(4)
adjusted for inflation from 1993 (the year of enactment of section
502(c)(4), even though section 101(k) violations did not become subject
to section 502(c)(4) until 2008.\9\ This interpretation tracks the
language of the statute and ensures that ERISA violations subject to
the same penalty are adjusted for inflation in a consistent manner. The
Department is of the view that this consistency will in turn reduce
both confusion and, ultimately, the burden upon the regulated
community.
---------------------------------------------------------------------------

    \8\ Section 502(c)(4) was enacted in 1993 by Pub. L. 103-66, 107
Stat.312. A new violation was added to section 502(c)(4) in 2006 by
Pub. L. 109-280, 120 Stat. 780. Section 502(c)(7) was enacted in
2002 by Pub. L. 107-204, 116 Stat. 745. Section 502(c)(7) also was
amended in 2006 by Pub. L. 109-208, 120 Stat. 780, to add a new
violation.
    \9\ Pub. L. 109-280, August 17, 2006, effective for failures
occurring in plan years beginning after 2007.
---------------------------------------------------------------------------

    The enactment dates of the ERISA statutes establishing the amount
of the civil monetary penalties follow in Table B:

                                            Table B--Enactment Dates
----------------------------------------------------------------------------------------------------------------
                                        Law (other than prior Inflation Adjustment Act)
  Penalty statute: U.S.C. and ERISA    most recently establishing amount of ERISA civil       Enactment date
              citations                               monetary penalties
----------------------------------------------------------------------------------------------------------------
29 U.S.C. Sec.   1059(b)/ERISA Sec.    Section 209(b) of the Employee Retirement Income  September 2, 1974.
 209(b).                                Security Act of 1974, Pub. L. 93-406, 88 Stat.
                                        829.
29 U.S.C. Sec.   1132(c)(2)/ERISA      Section 9342(c)(2) of the Omnibus Reconciliation  December 22, 1987.
 Sec.   502(c)(2).                      Act of 1987, Pub. L. 100-203, 101 Stat. 1330.
29 U.S.C. Sec.   1132(c)(4)/ERISA      Section 4301(c)(2) of the Omnibus Budget          August 10, 1993.\10\
 Sec.   502(c)(4).                      Reconciliation Act of 1993, Pub. L. 103-66, 107
                                        Stat. 312.
29 U.S.C. Sec.   1132(c)(5)/ERISA      Section 101(e)(2) of the Health Insurance and     August 21, 1996.
 Sec.   502(c)(5).                      Portability and Accountability Act of 1996,
                                        Pub. L. 104-91, 110 Stat. 1936.
29 U.S.C. Sec.   1132(c)(6)/ERISA      Section 1503(c)(2)(B) of the Taxpayer Relief Act  August 5, 1997.
 Sec.   502(c)(6).                      of 1997, Pub. L. 105-34, 111 Stat. 788.
29 U.S.C. Sec.   1132(c)(7)/ERISA      Section 306(b)(3) of the Sarbanes-Oxley Act of    July 30, 2002.
 Sec.   502(c)(7).                      2002, Pub. L. 107-204, 116 Stat. 745.
29 U.S.C. Sec.   1132(c)(8)/ERISA      Section 202(b)(3) of the Pension Protection Act   August 17, 2006.
 Sec.   502(c)(8).                      of 2006 (PPA), Pub. L. 109-280, 120 Stat. 780.
29 U.S.C. Sec.   1132(c)(9)(A)/ERISA   Section 311(b)(1)(E) of the Children's Health     February 4, 2009.
 Sec.   502(c)(9)(A).                   Insurance Program Reauthorization Act of 2009,
                                        Pub .L. 111-3, 123 Stat. 8.
29 U.S.C. Sec.   1132(c)(9)(B)/ERISA   Section 311(b)(1)(E) of the Children's Health     February 4, 2009.
 Sec.   502(c)(9)(B).                   Insurance Program Reauthorization Act of 2009,
                                        Pub. L. 111-3, 123 Stat. 8.
29 U.S.C. Sec.   1132(c)(10)/ERISA     Section 101(e) of the Genetic Information         May 21, 2008.
 Sec.  Sec.   502(c)(10)(B)(i),         Nondiscrimination Act of 2008, Pub. L. 110-233,
 (C)(i), (C) (ii), and (D)(iii)(II).    122 Stat. 881.
29 U.S.C. Sec.   1132(c)(12)/ERISA     Section 102(b)(6)(B) of the Cooperative and       April 7, 2014.
 Sec.   502(c)(12).                     Small Employer Charity Pension Flexibility Act,
                                        Pub. L. 113-97, 128 Stat. 1101.
29 U.S.C. Sec.   1132(m)/ERISA Sec.    Section 761(a)(9)(B)(ii) of the Uruguay Round     December 8, 1994.
 502(m).                                Agreements Act, Pub. L. 103-465, 108 Stat. 4809.
29 U.S.C. Sec.   1185d and 42 U.S.C.   Sections 1001(5) and 1562(e) of the Patient       March 23, 2010.
 Sec.   300gg-15/ERISA Sec.   715.      Protection and Affordable Care Act, Pub. L. 111-
                                        148, 124 Stat. 119.
----------------------------------------------------------------------------------------------------------------

b. Calculation of Catch-Up Inflation Adjustment
    Table C shows the calculation of the catch-up adjustment. Column
(1) contains the United States Code and ERISA citations for the penalty
statute. Column (2) contains the dollar amount most recently
established by law (other than the Prior Inflation Adjustment Act) for
each ERISA civil monetary penalty along with a description of the
violations subject to the penalty. Column (3) sets out the year the
amount of the civil monetary penalty was most recently established by
law (other than the Prior Inflation Adjustment Act) based on the date
of enactment found in Table B. Column (4) sets out the factor
determined by OMB to adjust for inflation from October of the
corresponding year in column (3) to October 2015. Column (5) sets out
the adjusted civil monetary penalty resulting from the product of the
dollar amount of the civil monetary penalty set out in Column (2)
multiplied by the inflation factor in column (4). Column (6) sets out
the actual civil monetary penalty in effect on November 2, 2015. Column
(7) sets out the maximum catch-up penalty, which is the sum of the
penalty amount in Column (6) plus the maximum penalty increase of 150
percent for a total of 250 percent of the 2015 penalty.\11\ Column (8)
reflects the actual catch-up penalty, effective August 1, 2016, which
is the lesser of the adjusted civil monetary penalty in Column (5) or
the maximum civil monetary penalty in Column (7).
---------------------------------------------------------------------------

    \10\ Initially, section 502(c)(4) applied to a failure of a
group health plan administrator to furnish information to the
Medicare Medicaid Coverage Data Bank under former section 101(f) of
ERISA. This requirement was repealed effective October 2, 1996, by
the Child Support Incentive Act of 1998, Pub. L. 105-200. The
reference to section 101(f) in section 502(c)(4) was deleted and
replaced with a reference to violation of the notice requirements of
section 302(b)(7)(F)(vi) of ERISA by section 104(a)(2) of the
Pension Funding Equity Act of 2004, Pub. L. 108-218. Sections
103(b)(2), 502(a)(2), 502(b)(2) and 902(f)(2) of the PPA deleted the
reference to section 302(b)(7)(F)(vi) and replaced it with
references to violations of sections 101(j), 101(k), 101(l) and
section 514(e)(3) of ERISA.
    \11\ Section 5(2)(b)(C) of the Inflation Adjustment Act states
that increase in the penalty resulting from the initial or catch-up
adjustment may not be greater than 150 percent of the penalty amount
on November 2, 2015. Mathematically, a maximum increase of 150
percent equals 250 percent of the penalty. See Bipartisan Budget Act
of 2015 Section by Section Summary at p. 6 available at http://docs.house.gov/meetings/RU/RU00/CPRT-114-RU00-D001.pdf.

                                                                           Table C--Calculation of Catch-Up Adjustment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                (1)                          (2)               (3)          (4)                  (5)                        (6)                        (7)                        (8)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Year CMP
                                        Civil monetary     amount last
                                     penalty (CMP) amount   set by law   Inflation
                                     last established by    other than   factor for  Adjusted CMP-- $ amount in                                                         Catch-Up CMP--lesser of
       ERISA penalty statute         law and description      prior       year in      column (2) x factor in      CMP Amount 11/02/2015    CMP Cap--2.5 x column (6)      column (5) or (7)
                                     of ERISA violations    Inflation    column (3)          column (4)
                                      subject to the CMP    Adjustment
                                                               Act
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
29 U.S.C. 1059(b)/ERISA Sec.        $10 per employee for          1974      4.65436  $47.......................  $11......................  $28......................  $28.
 209(b).                             failure to furnish
                                     reports (e.g.,
                                     pension benefit
                                     statements) to
                                     certain former
                                     participants and
                                     beneficiaries or
                                     maintain records.
29 U.S.C. 1132(c)(2)/ERISA Sec.     Up to $1,000 per day          1987      2.06278  2,063.....................  1,100....................  2,750....................  2,063.
 502(c)(2).                          for each:
                                     Failure or
                                     refusal to file
                                     annual report (Form
                                     5500) required by
                                     ERISA Sec.   104;
                                     and.
                                     Failure of a
                                     multiemployer plan
                                     to certify
                                     endangered or
                                     critical status
                                     under Sec.
                                     305(b)(3)(C) treated
                                     as failure to file
                                     annual report.
29 U.S.C. 1132(c)(4)/ERISA Sec.     Up to a $1000 per day         1993      1.63238  1,632.....................  1,000....................  2,500....................  1,632.
 502(c)(4).                          for each:
                                     Failure to
                                     notify participants
                                     under ERISA Sec.
                                     101(j) of certain
                                     benefit restrictions
                                     and/or limitations
                                     arising under
                                     Internal Revenue
                                     Code section 436;.
                                     Failure to
                                     furnish certain
                                     multiemployer plan
                                     financial and
                                     actuarial reports
                                     upon request under
                                     ERISASec.   101(k).
                                     Failure to
                                     furnish estimate of
                                     withdrawal liability
                                     upon request under
                                     ERISA Sec.   101(l);
                                     and
                                     Failure to
                                     furnish automatic
                                     contribution
                                     arrangement notice
                                     under ERISA Sec.
                                     514(e)(3).
29 U.S.C. 1132(c)(5)/ERISA Sec.     Up to $1,000 per day          1996      1.50245  1,502.....................  1,100....................  2,750....................  1,502.
 502(c)(5).                          for each failure of
                                     a multiple employer
                                     welfare arrangement
                                     to file report
                                     required by
                                     regulations issued
                                     under ERISA Sec.
                                     101(g).
29 U.S.C. 1132(c)(6)/ERISA Sec.     Up to $100 per day            1997      1.47177  147 not to exceed 1,472...  110 not to exceed 1,100..  275 not to exceed 2,750..  147 not to exceed 1,472.
 502(c)(6).                          for failure to
                                     furnish information
                                     requested by
                                     Secretary of Labor
                                     under ERISA Sec.
                                     104(a)(6) but not
                                     greater than $1,000
                                     per request.
29 U.S.C. 1132(c)(7)/ERISA Sec.     Up to $100 per day            2002      1.31185  131.......................  100......................  250......................  131.
 502(c)(7).                          for each failure to
                                     furnish a required
                                     blackout notice
                                     under section 101(i)
                                     of ERISA and of
                                     right to divest
                                     employer securities
                                     under section
                                     101(m)-- each
                                     statutory recipient
                                     a separate
                                     violation.

29 U.S.C. 1132(c)(8)/ERISA Sec.     Up to $1,100 per day          2006      1.17858  1,296.....................  1,100....................  2,750....................  1,296.
 502(c)(8).                          for failure by a
                                     plan sponsor of a
                                     multiemployer plan
                                     in endangered status
                                     to adopt a funding
                                     improvement plan or
                                     a multiemployer plan
                                     in critical status
                                     to adopt a
                                     rehabilitation plan.
                                     Penalty also applies
                                     to a plan sponsor of
                                     an endangered status
                                     plan (other than a
                                     seriously endangered
                                     plan) that fails to
                                     meet its benchmark
                                     by the end of the
                                     funding improvement
                                     period.
29 U.S.C. 1132(c)(9)(A)/ERISA Sec.  Up to $100 per day            2009      1.10020  110.......................  100......................  250......................  110.
   502(c)(9)(A).                     for each failure by
                                     an employer to
                                     inform employees of
                                     CHIP coverage
                                     opportunities under
                                     ERISA Sec.
                                     701(f)(3)(B)(i)(l)--
                                     each employee a
                                     separate violation.
29 U.S.C. 1132(c) (9)(B)/ERISA      Up to $100 per day            2009      1.10020  110.......................  100......................  250......................  110.
 Sec.   502(c)(9) (B).               for each failure by
                                     a plan administrator
                                     to timely provide to
                                     any State
                                     information required
                                     to be disclosed
                                     under ERISA Sec.
                                     701(f)(3)(B)(ii),
                                     regarding coverage
                                     coordination--each
                                     participant/
                                     beneficiary a
                                     separate violation.
29 U.S.C. 1132(c)(10)/ERISA Sec.    $100 per participant          2008      1.09819  110.......................  100......................  250......................  110.
 502(c)(10).                         or beneficiary per
                                     day during
                                     noncompliance period
                                     for failure by any
                                     plan sponsor of
                                     group health plan,
                                     or any health
                                     insurance issuer
                                     offering health
                                     insurance coverage
                                     in connection with
                                     the plan, to meet
                                     the requirements of
                                     ERISA Sec.  Sec.
                                     702(a)(1)(F),
                                     (b)(3), (c) or (d);
                                     or Sec.   701; or
                                     Sec.   702(b)(1)
                                     with respect to
                                     genetic information.
                                     See ERISA Sec.
                                     502(c)(10)(B)(i).
                                    Minimum penalty of            2008      1.09819  2,745.....................  2,500....................  6,250....................  2,745.
                                     $2,500 per
                                     participant or
                                     beneficiary for de
                                     minimis failures not
                                     corrected prior to
                                     notice from
                                     Secretary of Labor.
                                     See ERISA Sec.
                                     502(c)(10)(C)(i).
                                    Minimum penalty of            2008      1.09819  16,473....................  15,000...................  37,500...................  16,473.
                                     $15,000 per
                                     participant or
                                     beneficiary for
                                     failures which are
                                     not corrected prior
                                     to notice from
                                     Secretary of Labor
                                     and are not de
                                     minimis. See ERISA
                                     Sec.
                                     502(c)(10)(C)(ii).
                                    $500,000 cap on               2008      1.09819  549,095...................  500,000..................  1.25 million.............  549,095.
                                     unintentional
                                     failures. See ERISA
                                     Sec.
                                     502(c)(10)(D)(iii)(I
                                     I).

29 U.S.C. 1132(c)(12)/ERISA Sec.    Up to $100 per day            2014      1.00171  100.......................  100......................  250......................  100.
 502(c)(12).                         for failure of CSEC
                                     plan sponsor to
                                     establish or update
                                     a funding
                                     restoration plan.
29 U.S.C. 1132(m)/ERISA Sec.        Up to $10,000 per             1994      1.59089  15,909....................  10,000...................  25,000...................  15,909.
 502(m).                             distribution
                                     prohibited by ERISA
                                     Sec.   206(e).
29 U.S.C. 1185d and 42 U.S.C.       Up to $1000 per               2010      1.08745  1,087.....................  1,000....................  2,500....................  1,087.
 300gg-15/ERISA Sec.   715.          failure to provide
                                     Summary of Benefits
                                     Coverage under
                                     Public Health
                                     Services Act section
                                     2715(f), as
                                     incorporated in
                                     ERISA section Sec.
                                     715 and 29 CFR
                                     2590.715-2715(e).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

c. Structure
    Currently, subpart A of part 2575 (Adjustment of Civil Penalties
under ERISA Title I) of title 29 of the Code of Federal Regulations
contains 7 sections (one general section and a separate section for the
six previously adjusted penalties). Due to the large number of title I
penalties adjusted for inflation by this IFR, the Department has
decided to simplify the structure of subpart A of part 2575. This IFR
replaces Sec. Sec.  2575.100, 2575.209b-1, 2575.502c-2, 2575.502c-5,
and 2575.502c-6 with new Sec. Sec.  2575.1, 2575.2, and 2575.3. Section
2575.1 In general contains the implementing language. Section 2575.2
Catch-up adjustments to civil monetary penalties sets out the inflation
adjustments for each ERISA penalty from establishment of the penalty
amount through August 1, 2016. Section 2575.3 Subsequent adjustments to
civil monetary penalties addresses post-2016 non-regulatory inflation
adjustments.
    Also, as a result of the amendments made to the Prior Inflation
Adjustment Act by the Inflation Adjustment Act, the IFR also makes
minor technical changes to Sec. Sec.  2560.502c-2, 2560.502c-4,
2560.502c-5, 2560.502c-6, 2560.502c-7, and 2560.502c-8 of 29 CFR part
2560 and Sec.  2590.715-2715(e) of 29 CFR part 2950.

G. Mine Safety and Health Administration (30 CFR Part 100)

1. General
    This section G of the preamble addresses the civil monetary
penalties administered by Mine Safety and Health Administration (MSHA)
to enforce provisions of the Federal Mine Safety & Health Act of 1977
(Mine Act) (Pub. L. 91-173), as amended. Paragraphs 2(a) through (c)
explain revisions to each of the civil penalties administered and
enforced by MSHA.
2. Specific Penalty Adjustments
    In accordance with the Inflation Adjustment Act, MSHA is adjusting
its penalty amounts in Sec. Sec.  100.3, 100.4, and 100.5 by
calculating the catch-up adjustments for these penalties from the date
of the last statute or regulation (other than the Prior Inflation
Adjustment Act) that set these penalties. All MSHA penalties were last
set in 2007. See 72 FR 13592 (Mar. 22, 2007). Subsequently (after
2007), some but not all of MSHA's penalties also were adjusted for
inflation. This rule uses the 2007 final rule as the base year in
calculating all of MSHA's penalty inflation adjustments, rounded to the
nearest dollar. While this has resulted in different relative impacts
on particular penalty amounts depending on whether any inflation
adjustments occurred for that penalty since 2007, the net effect of
these adjustments is to increase MSHA's penalties.
a. Section 100.3--Determination of Penalty Amount; Regular Assessment
    Regularly assessed penalties are established by a penalty
conversion table in part 100 that sets penalties based on the number of
points a citation has been assigned. MSHA assigns points using a number
of factors described in part 100, including the negligence of the
operator and the gravity of the violation, among other criteria.
Currently, a range of points--from 60 or fewer to 144 or more--is
available; more points result in higher penalties. Penalties can range
anywhere at or between the minimum penalty and the maximum penalty,
based on the number of points assigned. Thus, the effect of MSHA's
penalty conversion table as a whole is a function of both the amount of
the minimum and maximum penalties and the rate of the progression
between those two outer points. In order to fully assess how to adjust
for inflation as prescribed by the statute, it is necessary to look at
the interaction of all three of these factors--minimum penalty, maximum
penalty, and the rate of progression between the two. As described
below, we have adjusted all three elements. The result is an upward
adjustment for inflation equal to 13.6% for penalties assessed overall
pursuant to the penalty table (calculated using MSHA's 2015 penalty
data).
    Existing Sec.  100.3(a)(1) provides that an operator of any mine in
which a violation of a mandatory health or safety standard occurs or
who violates any other provisions of the Mine Act shall be regularly
assessed a civil penalty of not more than $70,000. To calculate the
adjustment of this penalty under the Inflation Adjustment Act, MSHA
multiplied $60,000, the maximum civil penalty last established by
regulation (other than the Prior Inflation Adjustment Act) in 2007 (72
FR 13592), by the inflation adjustment factor for 2007 of 1.13833,
which results in a penalty amount of $68,300. The inflation-adjusted
amount of $8,300 is less than the statutory catch-up adjustment cap of
a 150 percent increase of the $70,000 penalty in effect as of November
2, 2015, which is $105,000. Therefore, the maximum regular

assessment for an operator of any mine in which a violation of a
mandatory health or safety standard occurs or who violates any other
provisions of the Mine Act is $68,300, a decrease of $1,700 from the
existing penalty amount of $70,000. The new maximum penalty of $68,300
is also the maximum amount available under MSHA's penalty conversion
table in Sec.  100.3(g).
    Section 100.3(g) provides the penalty conversion table used to
convert total penalty points to a dollar amount. As discussed above,
the points are assigned to a violation based on the criteria listed in
30 CFR part 100. The existing penalty conversion table assigns dollar
amounts to penalty points that range from 60 or fewer to 144 or more.
For this final rule, MSHA is using the penalty point conversion table
last established by regulation (other than the Prior Inflation
Adjustment Act) in 2007 (72 FR 13592)--both for purposes of determining
minimum and maximum penalties and the point range between those two
points. The penalty point range in the 2007 regulation used a penalty
point range from 60 points or fewer to 140 points or more. For this
reason, MSHA is changing the existing penalty point maximum of 144
points or more back to the maximum of 140 points or more. As described
below, the result is an upward adjustment for inflation equal to 13.6
percent for penalties assessed overall (using 2015 penalty data)
pursuant to the penalty conversion table.
    To adjust the existing minimum penalty for inflation, MSHA
multiplied $112, the minimum civil penalty last established by
regulation (other than under the Prior Inflation Adjustment Act) in
2007 (72 FR 13592), by the inflation adjustment factor for 2007 of
1.13833, which resulted in a penalty of $127. The $15 penalty increase
is less than the statutory catch-up adjustment cap of a 150 percent
increase of the $112 penalty in effect as of November 2, 2015, which is
$168. Therefore, the minimum penalty in the penalty conversion table is
$127.
    The inflation adjusted penalty conversion table in Sec.  100.3(g)
maintains the minimum penalty for 60 points or fewer at the new
inflation-adjusted amount of $127. For each additional point above 60
up to 140, the existing penalty conversion table increased the dollar
penalty by the same 2007 inflation adjustment factor of 1.13833 for
each point. After calculating all values, MSHA rounded all values to
the nearest dollar. Although the maximum penalty decreased from $70,000
to $68,3000, applying the new table to MSHA's 2015 assessment data
results in a 13.6 percent increase (just slightly less than the 13.8
percent inflation adjustment for 2007).
b. Section 100.4--Unwarrantable Failure and Immediate Notification
    Section 100.4(a) provides the minimum penalty for citations or
orders issued under Sec.  104(d)(1) of the Mine Act at $2,000. To
adjust the existing minimum penalty for inflation, MSHA multiplied
$2,000, the minimum penalty last established by regulation (other than
under the Prior Inflation Adjustment Act) in 2007 (72 FR 13592), by the
inflation adjustment factor for 2007 of 1.13833, which resulted in a
penalty of $2,277. The penalty increase of $277 is less than the
statutory catch-up adjustment cap of a 150 percent increase of the
$2,000 penalty in effect as of November 2, 2015, which is $3,000.
Therefore, the minimum penalty for any citation or order issued under
section 104(d)(1) of the Mine Act is $2,277.
    Section 100.4(b) states that the minimum penalty for any order
issued under section 104(d)(2) of the Mine Act is $4,000. To adjust the
existing minimum penalty for inflation, MSHA multiplied $4,000, the
minimum penalty last established by regulation (other than under the
Prior Inflation Adjustment Act) in 2007 (72 FR 13592), by the inflation
adjustment factor for 2007 of 1.13833, which resulted in a penalty of
$4,553. The penalty increase of $553 is less than the statutory catch-
up adjustment cap of a 150 percent increase of the $4,000 penalty in
effect as of November 2, 2015, which is $6,000. Therefore, the minimum
penalty for any citation or order issued under section 104(d)(2) of the
Mine Act is $4,553.
    Section 100.4(c) states that the penalty for failure to provide
timely notification of a death or entrapment of a miner or miners at a
mine to the Secretary of Labor under section 103(j) of the Mine Act, as
amended, will not be less than a penalty of $5,000 and not more than a
penalty of $65,000. To adjust the existing minimum penalty, MSHA
multiplied $5,000, the minimum civil penalty last established by
regulation (other than under the Prior Inflation Adjustment Act) in
2007 (72 FR 13592), by the inflation adjustment factor for 2007 of
1.13833, which resulted in a penalty of $5,692. The penalty increase of
$692 is less than the statutory catch-up adjustment cap of a 150
percent increase of the $5,000 penalty in effect as of November 2,
2015, which is $7,500. Therefore, the minimum penalty for failure to
provide timely notification to the Secretary under section 103(j) of
the Mine Act is $5,692. To adjust the existing maximum penalty, MSHA
multiplied $60,000, the maximum penalty last established by regulation
(other than under the Prior Inflation Adjustment Act) in 2007 (72 FR
13592), by the inflation adjustment factor for 2007 of 1.13833, which
resulted in a penalty of $68,300. The penalty increase of $8,300 is
less than the statutory catch-up adjustment cap of a 150 percent
increase of the $65,000 penalty in effect as of November 2, 2015, which
is $97,500. Therefore, the maximum penalty for failure to provide
timely notification to the Secretary under section 103(j) of the Mine
Act is $68,300.
c. Section 100.5--Determination of Penalty Amount; Special Assessment
    Section 100.5(c) addresses penalties that may be assessed daily to
an operator who fails to correct a violation for which a citation or
order has been issued under Section 104(a) of the Mine Act. The
existing maximum daily penalty assessment is $7,500.
    To adjust the penalty for inflation, MSHA multiplied $6,500, the
penalty amount last established by regulation (other than under the
Prior Inflation Adjustment Act) in 2007 (72 FR 13592), by the inflation
adjustment factor for 2007 of 1.13833, which resulted in a penalty of
$7,399. The inflation-adjusted amount of $899 is less than the
statutory catch-up adjustment cap of a 150 percent increase of the
$7,500 penalty in effect as of November 2, 2015, which is $11,250.
Therefore, the daily penalty assessed an operator who fails to correct
a violation for which a citation or order has been issued under Section
sec. 104(a) of the Mine Act is $7,399, a decrease of $101 from the
existing penalty amount of $7,500.
    Section 100.5(d) addresses penalties for miners who violate
mandatory safety standards relating to smoking and smoking materials
underground. The existing maximum smoking penalty is $375. To adjust
the penalty for inflation, MSHA multiplied the penalty $275, the
maximum smoking penalty amount last established by regulation (other
than under the Prior Inflation Adjustment Act) in 2007 (72 FR 13592),
by the inflation adjustment factor for 2007 of 1.13833, which resulted
in a penalty of $313. The inflation-adjusted amount of $38 is less than
the statutory catch-up adjustment cap of a 150 percent increase of the
$375 penalty in effect as of November 2, 2015, which is $563.
Therefore, the penalty assessed for a miner who violates mandatory
safety standards relating to smoking and smoking materials underground
is $313,

a decrease of $62 from the existing penalty amount of $375.
    Section 100.5(e) provides a maximum penalty for violations that are
deemed to be flagrant under 110(b)(2) of the Mine Act. The existing
maximum penalty is $242,000. To adjust the penalty for inflation, MSHA
multiplied $220,000, the penalty last established by regulation (other
than under the Prior Inflation Adjustment Act) in 2007 (72 FR 13592),
by the inflation adjustment factor for 2007 of 1.13833, which resulted
in a penalty of $250,433. The penalty increase of $8,433 is less than
the statutory catch-up adjustment increase cap of a 150 percent
increase of the $242,000 penalty in effect as of November 2, 2015,
which is $363,000. Therefore, the maximum penalty for violations that
are deemed flagrant under sec. 110(b) of the Mine Act is $250,433.

IV. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that the Department consider the impact of paperwork and other
information collection burdens imposed on the public. The Department
has determined that this final rule does not require any collection of
information.

V. Executive Order 12866: Regulatory Planning and Review, and Executive
Order 13563: Improving Regulation and Regulatory Review

    Executive Order 12866 requires that regulatory agencies assess both
the costs and benefits of significant regulatory actions. Under the
Executive Order, a ``significant regulatory action'' is one meeting any
of a number of specified conditions, including the following: Having an
annual effect on the economy of $100 million or more; creating a
serious inconsistency or interfering with an action of another agency;
materially altering the budgetary impact of entitlements or the rights
of entitlement recipients, or raising novel legal or policy issues. The
IFR's increases in the maximum civil money penalties that agencies are
authorized to assess for violations of laws they administer are
required by the statutorily-mandated provisions of the Inflation
Adjustment Act, which was enacted by Congress as part of the Bipartisan
Budget Act of 2015. This IFR is a ``significant'' regulatory action
because the Department's analysis shows that it could potentially have
an annual effect on the economy of more than $100 million.
    The Department considered two potential effects of the increased
penalties mandated by the Inflation Adjustment Act: (1) Increased
transfers from employers and others who violate the law (and therefore
pay penalties) to the government; and (2) the benefits to workers,
retirees, and responsible employers and others of increased penalties
that will encourage greater compliance with the laws that the
Department enforces. Each of these effects is discussed in turn.

Transfers to Government

    The Department estimated the increased transfers from employers and
others who violate the law to the government by conducting a provision-
by-provision analysis of each of the penalties affected by the
Inflation Adjustment Act. The Department considered the total dollar
amount of penalties collected under each affected penalty over the
immediately preceding three complete fiscal years (2013, 2014, and
2015) to calculate the average total penalties collected under each
statute.\12\ Then the Department projected how the amount collected
under each statute would increase if it did so in proportion to the
percentage increase of the maximum penalty for that statute.\13\ The
result--approximately $140 million in additional transfers from the
regulated community to the government each year--is enumerated by
agency in Table D.
---------------------------------------------------------------------------

    \12\ The total penalties collected in fiscal years 2013 and 2014
were adjusted for inflation using the CPI-U to put them into fiscal
year 2015 dollars previous to the calculation of three-year
collection averages.
    \13\ Exceptions were made to this method with respect to three
provisions of the Mine Act. To calculate projected total penalty
collections under sections 104(d)(1) and 104(d)(2), the three-year
averages of penalties collected under each provision between fiscal
years 2013 and 2015 were multiplied by the percentage increases in
the minimum required penalties for each statute. To calculate
projected total penalties collected using MSHA's penalty conversion
table, MSHA used the detailed assessment data from fiscal years
2013, 2014, and 2015 to estimate total assessed dollar values for
each year using both the existing and new conversion tables. The
total dollar values produced using the new inflation-adjusted
conversion table were then compared to the dollar values produced
using the existing conversion table. The resulting annual percent
changes for fiscal years 2013, 2014, and 2015 were 13.5 percent,
13.5 percent, and 13.6 percent respectively. These annual
percentages were then multiplied by the annual dollar collection
totals for each fiscal year to obtain projected collections by
fiscal year, and a three-year average was then taken to produce a
single projected collection total.

                                          Table D--Projected Penalties
                [Inflation Adjustment Act: Total penalties by agency, 3-year average (2013-2015)]
----------------------------------------------------------------------------------------------------------------
                                                                        Dollar Amount Collected  ($FY2015)
                                                                 -----------------------------------------------
                             Agency                                                    Total
                                                                  Total (current    (projected    Numeric change
                                                                    penalties)      penalties)
----------------------------------------------------------------------------------------------------------------
EBSA............................................................     $17,667,363     $33,134,336     $15,466,973
MSHA............................................................      73,112,904      82,812,155       9,699,251
OSHA (federal)..................................................     141,969,042     252,927,499     110,958,457
OWCP............................................................          19,674          45,470          25,797
WHD/ETA/OSEC....................................................       6,894,835      10,541,217       3,646,383
                                                                 -----------------------------------------------
    Total.......................................................     239,663,817     379,460,677     139,796,860
----------------------------------------------------------------------------------------------------------------

    The Department notes that this amount could be an overestimate of
transfers given that its collections are likely to be lower than
projected under the new penalties established by the Inflation
Adjustment Act. First, it does not account for a key factor
underpinning long-established deterrence principles: That rational
actors are less likely to commit violations when faced with higher
penalties.\14\ It is therefore conceivable

that the increase in penalties collected would not be proportional to
the increase in penalties that might be assessed by an agency, but
would instead be less.\15\ In addition, this estimate also assumes that
the Department's collections will continue at approximately the same
rate each year despite increased penalties. Together, these factors
suggest that the amount of the transfers from the regulated community
to the government is likely to be lower than the $140 million projected
above.
---------------------------------------------------------------------------

    \14\ See generally Gary S. Becker, Essays in the Economics of
Crime and Punishment, Ch. 1 (1974), available at http://www.nber.org/chapters/c3625.pdf. These concepts are also reflected
in the Inflation Adjustment Act. 28 U.S.C. 2461 Note, Sec. 2(a)(1)
(``[T]he power of Federal agencies to impose civil monetary
penalties for violations of Federal law and regulations plays an
important role in deterring violations and furthering the policy
goals embodied in such laws and regulations[.]''); 2(b)(2) (``The
purpose of this Act is to establish a mechanism that shall . . .
maintain the deterrent effect of civil monetary penalties and
promote compliance with the law.''); S. 535: Hearing before Subcomm.
Legis & Nat'l Sec. of the H. Comm. Gov't Ops., 101st Cong. 3 (1990)
(hereinafter 1990 Hearing) (statement of Rep. Conyers) (``At the
heart . . . of regulatory statutes . . . are the monetary fines
intended to both penalize and deter practices prohibited by these
laws.''); Id. at 70 (statement of HHS Inspector Gen. Kusserow) (``We
have found that civil monetary penalties are a very effective
enforcement tool [and] have also seen them become a very good
deterrent against fraud.''). Research suggests that the same
concepts apply in labor law violations as well. See, e.g., Orley
Ashenfelter & Robert S. Smith, Compliance with the Minimum Wage Law,
87 Journal of Political Economy 333 (1979), available at http://www.jstor.org/stable/1832090?seq=1#page_scan_tab_contents.
    \15\ In addition, it is important to note that the IFR does not
revoke existing provisions of the laws above that provide the
Department with discretion in determining the appropriate civil
penalty amounts below any particular maximum penalty. Nor does the
IFR amend any requirements in these laws that the Department
consider mitigating factors in making such determinations, such as
the severity of the violation, the number of workers affected by the
violation, the entity's compliance history, or the size of the
entity.
---------------------------------------------------------------------------

    OSHA's penalty increases under the Inflation Adjustment Act will
necessitate an increase to the maximum and minimum penalty amounts
required by states that administer their own occupational safety and
health programs as well. Section 18 of the OSH Act (29 U.S.C. 667)
requires states with OSHA-approved State Plans covering private-sector
and state and local government employees to have standards and an
enforcement program that are at least as effective as Federal OSHA's
standards and enforcement program. Twenty-two (22) States and U.S.
territories have State Plans that cover private sector employees and
state and local government employees: Alaska, Arizona, California,
Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada,
New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina,
Tennessee, Utah, Vermont, Virginia, Washington, and Wyoming. The
existing regulation at 29 CFR 1902.4(c)(2)(xi) provides that in order
to satisfy this requirement of effectiveness, State Plans must have
effective sanctions, such as those prescribed in the OSH Act.
Similarly, 29 CFR 1902.37(b)(12) requires State Plans with final
approval to propose penalties in a manner at least as effective as
under the federal program. This IFR amends 29 CFR 1902.4(c)(2)(xi) to
clarify that State Plans must provide sanctions as effective as those
set forth in the OSH Act and in 29 CFR 1903.15(d).
    OSHA will require State Plans to increase their penalties to
reflect the federal penalties increases at the state levels in order to
maintain this ``at least as effective'' status. If every State Plan
state increases its own penalties in line with the federal increases,
using the same methodology outlined above, the additional transfer from
employers to OSHA State Plans would be $57.1 million, as enumerated in
Table E.

                                          Table E--Projected Penalties
                    [Inflation Adjustment Act: OSHA state plans, 3-Year average (2013-2015)]
----------------------------------------------------------------------------------------------------------------
                                                                       Dollar amount collected ($FY2015)
                                                              --------------------------------------------------
                                                                                Total
                                                                Total (current     (projected     Numeric change
                                                                  penalties)       penalties)
----------------------------------------------------------------------------------------------------------------
OSHA State Plans.............................................     $73,121,821     $130,271,603      $57,149,782
----------------------------------------------------------------------------------------------------------------

Benefits to Workers, Retirees, and Responsible Employers

    Meanwhile, the Inflation Adjustment Act's penalty increase will
have significant benefits for workers, retirees, and responsible
employers and others in the regulated community. While most employers
play by the rules, there are too many cases where workers are cheated
out of their hard-earned wages or retirement benefits or forced to
endure an unsafe workplace. By deterring violations and promoting
compliance, more workers and retirees will benefit from the core
employment law protections that the Department administers and
enforces. Furthermore, responsible employers and others who remain in
compliance with the Department's laws will face less competition from
the minority of employers who make a calculated decision to save money
by eschewing compliance with these laws.\16\ Those who follow the law
will essentially benefit from a more level playing field when competing
with those who do not. The Department has been unable to quantify these
significant benefits.
---------------------------------------------------------------------------

    \16\ Entities that violate the basic labor protections described
above such that they are subject to civil penalties have often
benefitted from their non-compliance with such requirements over a
length of time before being investigated, assessed and required to
pay penalties for their illegal activities. As noted above, the rule
only adjusts the authorized levels of civil money penalties to
account for inflation over time. Of course, to the extent that civil
penalties increase, there will be increased revenues to the
government from entities that have been found to have violated the
law. See 1990 Hearing at 15 (discussing the importance of the
government fully understanding how many civil monetary penalties are
assessed and collected and discussing the benefit to taxpayers of
increased revenue for government).
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act and Small Business Regulatory
Enforcement Fairness Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), imposes
certain requirements on Federal agency rules that are subject to the
notice and comment requirements of the Administrative Procedure Act
(APA), 5 U.S.C. 553(b), and that are likely to have a significant
economic impact on a substantial number of small entities. This IFR is
exempt from the requirements of the APA because the Inflation
Adjustment Act directed the Department to issue an interim final rule.
Therefore, the requirements of the RFA applicable to notices of
proposed rulemaking, 5 U.S.C. 603, do not apply to this IFR.
Accordingly, the Department is not required to either certify that the
IFR would not have a significant economic impact on a substantial
number of small entities or conduct a regulatory flexibility analysis.

VII. Other Regulatory Considerations

A. The Unfunded Mandates Reform Act of 1995

    The Department estimates that the IFR may result in transfers of up
to $140 million per year, and acknowledges that this IFR may yield
effects that make it subject to UMRA requirements. Therefore, the
Department carried out the requisite cost-benefit analysis in the
section discussing Executive Orders 12866 and 13563 above.

B. Executive Order 13132: Federalism

    As described above, Section 18 of the OSH Act (29 U.S.C. 667)
requires OSHA-approved State Plans to have standards and an enforcement
program that are at least as effective as federal OSHA's standards and
enforcement program. The existing regulation at 29 CFR 1902.4(c)(2)(xi)
provides that in order to satisfy this requirement of effectiveness,
State Plans must have effective sanctions, such as those prescribed in
the OSH Act. Similarly, 29 CFR 1902.37(b)(12) requires State Plans with
final approval to propose penalties in a manner at least as effective
as under the federal program. This IFR amends 29 CFR 1902.4(c)(2)(xi)
to clarify that State Plans must provide sanctions as effective as
those set forth in the OSH Act and in 29 CFR 1903.15(d).
    In accordance with Part 1953, State Plans are required to adopt