Federal Civil Penalties Are Increasing on August 1st, 2016

By: Erik S. Mroz, Drewry Simmons Vornehm, LLP

Who says we have a “do-nothing” Congress? In 2015, a little piece of legislation passed both houses and was signed into law. Dubbed “The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,” the law amended the “Federal Penalties Inflation Adjustment Act of 1990” and requires federal agencies to increase their civil monetary penalties. The increased penalties are to take effect no later than August 1, 2016.

The new law also provides that federal agencies must initially adjust their civil penalties with a “catch up” period to take effect this year and requires agencies to make subsequent annual adjustments for inflation. Beginning in January 2017, federal agencies are to publish their annual inflation adjustments in the Federal Register no later than the 15th day of January of each calendar year. Due to the “catch up” period, we can expect much higher increases this year.

On July 1, 2016, the United States EPA published an interim final rule in the Federal Register to increase the amount of its civil penalties to be assessed under the federal environmental laws. Under EPA’s interim final rule, EPA will apply the increased civil penalty amount for violations that occurred after November 2, 2015 and assessed after August 1, 2016. For example, civil penalties under Section 3008(g) of the Resource Conservation and Recovery Act, 42 U.S.C. § 6928(g), which was initially set by Congress at $25,000, will increase to $70,117 per day per violation. Civil penalties under Section 309(d) of the Clean Water Act, 33 U.S.C. § 1319(d), initially set by Congress at $25,000 will increase to $51,570. The increase in civil penalties is across-the-board and will apply to every federal environmental law, including CERCLA, the Clean Air Act, the Emergency Planning and Community Right-to-Know Act, The Toxic Substances Control Act and the Federal Insecticide, Fungicide and Rodenticide Act.

Like EPA, the Department of Labor, including the Occupational Health & Safety Administration (“OSHA”), has also published an increase in its civil penalties, effective August 1, 2016.   For example, under the new rule, all OSHA maximum penalties will increase by 78%. Any citations issued by OSHA after August 1, 2016 will be subject to the new penalties if the related violations occurred after November 2, 2015. All other Department of Labor civil penalties will also be subject to an increased maximum after August 1, 2016.