By: Jim Egan
Synopsis: For Longshore Claims Folks--U.S. Department of Labor Increases Penalties to Catch Up to Federal Civil Penalties Inflation Act of 1990, analysis by James Egan, J.D.
Editor’s comment: 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 existing civil monetary penalties with an initial catchup adjustment, followed by annual adjustments for inflation. To implement the Inflation Adjustment Act, the Department of Labor published a department-wide interim final rule (IFR) adjusting its penalties for inflation for all civil penalties assessed after August 1, 2016.
The Inflation Adjustment Act affects penalties as outlined below:
Section 14(g) of the LHWCA: Failure to Report Termination of Payments—the penalty has increased from $110 to $275. Section 14(g) now states as follows:
Any employer failing to notify the district director that the final payment of compensation has been made as required by § 702.235 shall be assessed a civil penalty in the amount of $275 for any violation for which penalties are assessed after August 1, 2016. The district director has the authority and responsibility for assessing a civil penalty under this section.
Section 30(e) of the LHWCA: Penalty for Late Report of Injury or Death—the maximum penalty amount has increased from $11,000 to $22,587. Section 30 (e) now states as follows:
Any employer, insurance carrier, or self-insured employer who knowingly and willfully fails or refuses to send any report required by § 702.201, or who knowingly or willfully makes a false statement or misrepresentation in any report, shall be subject to a civil penalty not to exceed $22,587 for each such failure, refusal, false statement, or misrepresentation for which penalties are assessed after August 1, 2016. The district director has the authority and responsibility for assessing a civil penalty under this section.
When assessing this penalty, the District Director considers how many penalties, if any, have been assessed against the employer in the previous two years. A graduated penalty schedule is then consulted as outlined below. However, the District Director has broad discretion to increase or decrease the amount of the penalty assessed based on aggravating or mitigating factors. The District Director also considers whether the employer is considered to be a small business as defined by the Small Business Regulatory Enforcement Fairness Act when determining the penalty amount.
Graduated penalty schedule as of August 1, 2016:
1. • 1st late report: $500
2. • 2nd late report: $1,000
3. • 3rd late report: $2,000
4. • 4th late report: $4,000
5. • 5th late report: $8,000
6. • 6th late report: $16,000
7. • 7th late report (& above): $22,587 (statutory maximum)
Section 49 of the LHWCA: Discrimination Against Employees Who Bring Proceedings—the penalty amount has increased from a $1,000 minimum and a $5,000 maximum to a new minimum of $2,259 and a maximum up to $11,293. Section 49 now states as follows:
Any employer who violates this section, and has penalties assessed for such violation after August 1, 2016, shall be liable for a penalty of not less than $2,259 or more than $11,293 to be paid (by the employer alone, and not by a carrier) to the district director for deposit in the special fund described in section 44 of the Act, 33 U.S.C. 944; and shall restore the employee to his or her employment along with all wages lost due to the discrimination unless the employee has ceased to be qualified to perform the duties of employment.
The penalties are outlined in detail in Industry Notice 158, which is available on the Office of Workers’ Compensation (OWCP), Division of Longshore and Harbor Workers’ Compensation (DLHWC) website.
This article was researched and written by Jim Egan, J.D. our Longshore and Jones Act guru. If you need help with any Longshore or Jones Act claim, reach out to Jim.
The foregoing was originally published on the Keefe, Campbell, Beiry Blog and is reproduced here with permission of the author. No further republication is permitted without the author’s consent.