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The U.S. Department of Labor (DOL) recently published its annual update announcement regarding federal civil monetary penalties under the Federal Civil Penalties Inflation Adjustment Act. In a notice published in the Federal Register on May 27th, 2026, the DOL announced that no penalty increases will occur this year. Annual penalty increases have typically occurred in January for most the past decade, but the U.S. government was partially shutdown when 2026 began. Annual inflation adjustments to employment-related civil penalties will likely return in 2027.
Why Penalties Are Not Increasing in 2026
The Federal Civil Penalties Inflation Adjustment Act, as amended in 2015, requires federal agencies to review and adjust civil penalties each year to account for inflation. These adjustments are meant to keep penalties from losing their deterrent effect over time.
This year is different due to the partial government shutdown that began during the window of time when such adjustments typically occurred. In October 2025, the temporarily de-funded Bureau of Labor Statistics (BLS) did not publish its annual inflation report, which the DOL and other agencies typically used to calculate necessary penalty adjustments. As result, January 2026 came and went without any publication of inflation adjusted penalty amounts. Subsequently, once government operations began to return to normal, the Office of Management and Budget (OMB) issued guidance in April 2026 that no annual inflation adjustment would apply for 2026. As a result, the Department of Labor's notice as published in the May 27th Federal Register leaves penalty amounts unchanged from their 2025 levels.
Although employers won't see another round of penalty increases this year, that doesn't mean reduced enforcement. The existing penalty amounts are still fully enforceable, and the DOL continues to focus enforcement efforts on improving wage & hour compliance, workplace safety, and working conditions.
Which Labor Laws Are Affected
The annual penalty update typically covers a wide range of employment-related laws enforced by the Department of Labor, including:
- The Fair Labor Standards Act (FLSA)
- The Occupational Safety and Health Act (OSH Act)
- The Family and Medical Leave Act (FMLA)
- The Employee Retirement Income Security Act (ERISA)
- The Migrant and Seasonal Agricultural Worker Protection Act (MSPA)
- The Employee Polygraph Protection Act (EPPA)
- Various prevailing wage and federal contractor requirements
Because no penalties will be adjusted for inflation this year, the 2025 maximums published in last year’s final rule remain in place.
OSHA Penalties Remain Significant
Workplace safety compliance is one area employers should continue to proactively address, even without increasing penalty amounts.
Federal OSHA's current maximum penalties remain at:
- Up to $16,550 per violation for serious and other-than-serious violations
- Up to $16,550 per day for failure-to-abate violations
- Up to $165,514 per violation for willful or repeated violations
Even less-than-maximum penalties can add up quickly when an inspection uncovers more than one violation, giving employers incentive to ensure compliance with the OSH Act and related federal OSHA standards. Businesses covered by State OSHA plans must also ensure compliance with state-specific safety standards.
Employee Benefits and ERISA Penalties Continue to Apply
Employers who sponsor retirement plans or health benefit plans should keep in mind that the 2025 inflation-adjusted Employee Benefits Security Administration (EBSA) penalties remain in effect.
Compliance violations involving required benefit plan filings, disclosures, or document production, for example, can result in daily penalties that can snowball into staggering amounts. Many of these amounts weren't adjusted upward for 2026, but they're still large enough to deserve ongoing attention.
Key Takeaways
Because of delays caused by the partial government shutdown that continued through the January review period, employers get a reprieve this year on increased penalty amounts. Unfortunately, the lack of new penalty increases is not a sign that enforcement is easing up for any of the DOL’s enforcing agencies. In recent years, the Department of Labor has focused its enforcement efforts on wage theft, workplace safety, working conditions, and employee benefits, among other worker protections. Businesses that achieve and maintain full compliance with related regulations are far less likely to face costly investigations or penalties. WorkWise Compliance will continue monitoring federal and state regulatory developments and will share updates as new labor law changes affect employers nationwide.
