Even the government is feeling the effects of the recent spike in inflation. In December, the Department of Justice (“DOJ”) issued a final rule adjusting certain civil penalties to account for the increasing rate of inflation in 2021. The final rule affects civil penalties from numerous DOJ programs, including employer penalties for certain immigration-related programs.

DOJ Adjusts for Inflation

According to the Department of Justice, a final rule, effective December 13, 2021, implements an inflation adjustment for certain civil penalties, including some immigration-related provisions. Final rules, in the context of administrative rulemaking, are federal regulations that will be adopted into the Code of Federal Regulations (“CFR”). In other words, these regulations carry the force of law.

The government’s ability to adjust civil penalties to account for inflation derives from the 2015 Balanced Budget Act (“BBA”), 28 U.S.C. § 2461, which requires that federal agencies make adjustments to civil monetary penalties on a yearly basis to account for inflation. 

To make these adjustments, the government uses calculations based on the Bureau of Labor Statistics’ Consumer Price Index. Under the BBA, civil penalties are adjusted by mechanically applying an inflation factor to each civil penalty amount, rounded to the nearest dollar. The increase applies only to violations that take place after November 2, 2015, the date the BBA was enacted into law.

While inflation adjustments are not necessarily made every year, it is unsurprising to see this announcement considering the skyrocketing inflation rates that occurred in 2021.

What Civil Penalties Are Affected?

The announcement adjusts civil penalties for a long list of federal programs including the Construction Safety Act, Federal Mine Safety and Health Act of 1977, Employee Retirement Income Security Act (“ERISA”), Family and Medical Leave Act (“FMLA”), Fair Labor Standards Act (FLSA), Migrant and Seasonal Agricultural Worker Protection Act, Walsh-Healey Public Contracts Act, Employee Polygraph Protection Act, United States-Mexico-Canada Agreement Implementation Act, Longshore and Harbor Workers’ Compensation Act (“LHWCA”), and Black Lung Benefits Act, as well as the Immigration and Nationality Act (“INA”).

According to the final rule, the immigration-related provisions include the unlawful employment of undocumented workers and violations of the anti-discrimination provisions of the Immigration and Nationality Act (“INA”). The updated penalty figures can be found here.

As previously highlighted on this blog, the Department of Justice under the Biden administration continues to enforce immigration law and crack down on certain types of employer violations, including discrimination claims. The increase in civil penalties, though nominal, highlights the ongoing need for employers to be aware of potential penalties for violations of the law.