Legally Required Inflation Updates for Wage and Hour Civil Money Penalties Are Being Ignored.
“A tax is a fine for doing well, a fine is a tax for doing wrong."
— Attributed to Mark Twain
Most years, usually in January, I write a blog about the issuance of updated civil money penalties in the world of wage and hour. See, e.g., https://www.awrcounsel.com/blog/2024/1/30/2024-flsa-cwhssa-and-pca-civil-money-penalties-go-up-62222?rq=civil%20money%20penalties .
On November 2, 2015, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 was enacted to advance the effectiveness of civil money penalties and to strengthen their deterrent effect. Civil money penalties (“CMPs”) are supposedly more effective when they keep pace with inflation. And inflation is endemic to a nation hooked on debt and unwilling to tax itself to cover the expenses of its government.
The use of CMPs helps deter violations of the important laws that the Wage and Hour Division enforces, which is also intended to result in safer, more productive workplaces. It also (not incidentally) generates additional revenue for the Government since the penalties are paid to the US Treasury and not the workers. The law requires agencies across the federal government to adjust their penalties for inflation not later than January 15 of every year. This is a mandatory requirement. But the last Department of Labor’s Civil Penalties Inflation Adjustment Act Annual Adjustment for 2025 final rule was published in the Federal Register on January 10, 2025. See 90 FR 1854. That was in the final days of the Biden Administration. The Trump Administration -- whether due to incompetence, malfeasance, ideological opposition, or plain obstinate refusal to obey the rule of law -- has failed to publish new 2026 CMPs for the wage and hour laws which were required to be issued by January 15th. Originally, the delay was ascribed to the lingering effects of the 43-day federal government shutdown that began on October 1, 2025. But now, that explanation does pass the straight face test.
Under the Act, the 2026 penalties are supposed to be calculated by multiplying the 2025 penalty amounts by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U) from October 2024 through October 2025. Ostensibly, due to the government shutdown, the Bureau of Labor Statistics never released CPI-U figures for October 2025. This left the agencies without a multiplier to apply to their 2025 penalties. Of course, if the effect of inflation is such that no increase is necessary, that would mean no adjustment was required.
Apparently, the Trump Administration intends to leave the 2025 penalties in place for 2026. Accordingly, the maximum CMP for violations of the overtime requirements of the Contract Work Hours and Safety Standards Act (“CWHSSA”), will remain at o $33 per worker per day, effective January 16, 2025. Same $33 penalty will remain in place for the child labor penalties of the Walsh-Healey Public Contracts Act (“WHPCA”). And same for the Fair Labor Standards Act (“FLSA”) child labor penalties, albeit at a different dollar amounts. For more information on CMPs and the maximum fines per violation, visit the DOL website here: https://www.dol.gov/agencies/whd/resources/penalties. This website is updated annually, except of course when it is not.