U.S. DOL Announced the 2021 Annual Adjustments to the Civil Penalty Amounts
Published: 01.25.2021
Failing to comply with the U.S. Department of Labor (DOL) regulations may result in steeper penalties due to new inflation adjustments. The 2021 adjustments are effective for penalties assessed after January 15, 2021, with respect to violations occurring after November 2, 2015.The following provides an overview of the penalty increases:
| Compliance Failures | Penalties assessed after 1/15/2021 | Penalties assessed after 1/1/2020 |
Penalty for failing to file Form 5500 |
$2,259 per day |
$2,233 per day |
Summary of Benefits & Coverage |
$1,190 per failure |
$1,176 per failure |
Failing to inform of CHIP assistance |
$120 per participant | $119 per participant |
| Failure to timely provide to any state information about coverage coordination with Medicaid or CHIP | $120 per participant | $119 per participant |
| Failure to meet GINA requirements Minimum penalty for de minimus failure not corrected before notice from DOL Minimum penalty for non-de minimus failure not corrected before notice from DOL Cap on penalties for unintentional failures |
$120 per day of noncompliance $3,005 $18,035 $601,152 |
$119 per day of noncompliance $2,970 $17,824 $594,129 |
| Failure to file MEWA annual report (Form M-1) | $1,644 per day | $1,625 per day |
| Failure to provide plan documents within 30 days of DOL request | $161 per day (not to exceed $1,613/request) | $159 per day (not to exceed $1,594/request) |
| Failure to adhere to FMLA poster requirement | $178 per offense | $176 per offense |
The DOL has discretion to impose lower penalties. One example is seen with the Delinquent Voluntary Filers Compliance Program (DVFCP). The DVFCP is designed to encourage plan sponsors to voluntarily correct reporting failures. However, if the DOL identifies any errors or failures before it is corrected, filing under the DVFCP is no longer an option and maximum penalties may apply. Also, while relief granted in connection with the COVID-19 public health emergency allows more time to provide certain disclosures, penalties could potentially be triggered if the terms of that relief are not met.
Source: Federal Register, Vol. 86, No. 9, 1/14/2021
