The U.S. Department of Labor has released the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2024. These adjustments apply to a wide range of benefit-related civil monetary penalties and to all penalties assessed after January 15, 2024, concerning violations that occurred after November 2, 2015.
The most notable penalty adjustments are as follows:
- The penalty for failing to file Form 5500, which most ERISA plans must file, increased from $2,586 to $2,670 per each day that the filing is late;
- The maximum penalty for failing to provide a Summary of Benefits and Coverage (SBC) increased from $1,362 to $1,406 per failure;
- Violations of the Genetic Information Nondiscrimination Act (GINA) increased from $137 to $141 per participant per day;
- 401(k) plans with automatic contribution arrangements that fail to provide the required ERISA §514(e) preemption notice to participants will face a penalty of $2,112 per day, up from $2,046 last year;
- Penalties for 401(k) plans failing to provide blackout notices, which are required before certain periods in which participants may not change their investments, take loans, or take distributions, or notices of diversification rights, increased from $164 to $169 per day;
- Maximum penalties for a 401(k) plan's failure to comply with ERISA §209(b) recordkeeping and reporting requirements increased from $36 to $37 per employee; and
- Penalties for failing to meet multiple employer welfare arrangement (MEWA) filings, such as annual Form M-1 and origination filings, increased from $1881 to $1942 per day.
Plans also should note that the DOL has the discretion to impose lower civil penalties under some circumstances, so not all violations will result in the maximum penalties indicated above.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.