[Federal Register Volume 81, Number 127 (Friday, July 1, 2016)]
[Rules and Regulations]
[Pages 42983-42986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15679]



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  Federal Register / Vol. 81, No. 127 / Friday, July 1, 2016 / Rules 
and Regulations  

[[Page 42983]]



DEPARTMENT OF HOMELAND SECURITY

[CIS No. 2585-16]
RIN 1615-AC10

DEPARTMENT OF LABOR

Wage and Hour Division

29 CFR Part 503

RIN 1235-AA15


Department of Homeland Security and Department of Labor Federal 
Civil Penalties Inflation Adjustment Act Catch-Up Adjustments for the 
H-2B Temporary Non-agricultural Worker Program

AGENCY: Department of Homeland Security; Wage and Hour Division, 
Department of Labor.

ACTION: Interim final rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Homeland Security (DHS) and the U.S. 
Department of Labor (DOL) (collectively, ``the Departments'') are 
jointly issuing this interim final rule to adjust the amounts of civil 
monetary penalties assessed or enforced in connection with the 
employment of temporary nonimmigrant workers under the H-2B program. 
The Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015 (Inflation Adjustment Act) requires agencies to adjust the 
levels of civil monetary penalties with an initial catch-up adjustment, 
followed by annual adjustments for inflation. The Departments are 
required to calculate the catch-up and subsequent annual adjustments 
based on the Consumer Price Index for all Urban Consumers. The 
Departments must publish the interim final rule by July 1, 2016, and 
the new penalty levels must be effective no later than August 1, 2016. 
The increased penalty levels will apply to all penalties assessed after 
the effective date, August 1, 2016, for associated violations that 
occurred after November 2, 2015, as discussed below.

DATES: This interim final rule is effective August 1, 2016. The 
adjusted civil penalty amounts are applicable only to civil penalties 
assessed after August 1, 2016, whose associated violations occurred 
after November 2, 2015, the date of enactment of the Inflation 
Adjustment Act. Therefore, violations occurring on or before November 
2, 2015, as well as assessments made prior to August 1, 2016 whose 
associated violations occurred after November 2, 2015, will continue to 
be subject to the civil monetary penalty amounts currently set forth in 
the regulations in 29 CFR part 503 (2015). Interested persons are 
invited to submit written comments on this interim final rule on or 
before August 15, 2016.

ADDRESSES: You may submit comments, identified by Regulatory 
Information Number (RIN) 1235-AA15, by either of the following methods:
    Electronic Comments: Comments may be sent via http://www.regulations.gov, a Federal E-Government Web site that allows the 
public to find, review, and submit comments on documents that agencies 
have published in the Federal Register and that are open for comment. 
Simply type in ``Department of Homeland Security and Department of 
Labor Federal Civil Penalties Inflation Adjustment Act Catch-Up 
Adjustments'' (in quotes) in the Comment or Submission search box, 
click Go, and follow the instructions for submitting comments.
    Mail: Address written submissions to Robert Waterman, Compliance 
Specialist, Wage and Hour Division, U.S. Department of Labor, Room S-
3510, 200 Constitution Avenue NW., Washington, DC 20210.
    Instructions: Please submit only one copy of your comments by only 
one method. All submissions must include the agencies' names and the 
RIN 1235-AA15. Please be advised that comments received will become a 
matter of public record and will be posted without change to http://www.regulations.gov, including any personal information provided. 
Comments that are mailed must be received by the date indicated for 
consideration.
    Docket: For access to the docket to read background documents or 
comments, go to the Federal e-Rulemaking Portal at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Pamela Peters, Program Analyst, U.S. 
Department of Labor, Room S-2312, 200 Constitution Avenue NW., 
Washington, DC 20210; telephone: (202) 693-5959 (this is not a toll-
free number). Copies of this interim final rule may be obtained in 
alternative formats (large print, Braille, audio tape or disc), upon 
request, by calling (202) 693-5959 (this is not a toll-free number). 
TTY/TDD callers may dial toll-free 1-877-889-5627 to obtain information 
or request materials in alternative formats.

SUPPLEMENTARY INFORMATION:

I. Regulatory Information

    The U.S. Department of Homeland Security (DHS) and U.S. Department 
of Labor (DOL) (collectively, ``the Departments'') are promulgating 
this interim final rule to ensure that the amount of civil penalties 
assessed or enforced in our joint rules reflect the statutorily 
mandated maximum as adjusted for inflation. Pursuant to the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 
(``Inflation Adjustment Act''), the Departments are required to 
promulgate a ``catch-up adjustment'' through an interim final rule. 
Pursuant to the Inflation Adjustment Act and 5 U.S.C. 553(b)(3)(B), the 
Departments find that good cause exists for issuance of this interim 
final rule without prior notice and comment. By operation of the 
Inflation Adjustment Act, the Departments must publish the catch-up 
adjustment by July 1, 2016, and the rule must be effective no later 
than August 1, 2016. The Inflation Adjustment Act further provides that 
the increased penalty levels apply to any penalties assessed after the 
effective date of the increase. Additionally, the Inflation Adjustment 
Act provides a clear formula for adjustment of the civil penalties, 
leaving the agencies little room for discretion. Both because of the 
requirement for action by July 1 of this year, and because of the 
mechanistic nature of the rulemaking, the Departments find that notice 
and comment prior to issuing the inflation adjustment would be 
impracticable and unnecessary, respectively, in addition to

[[Page 42984]]

being contrary to the language of the Inflation Adjustment Act.

II. Background

Inflation Adjustment Act

    On November 2, 2015, the President signed into law the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Pub. 
L. 114-74, 701 (``Inflation Adjustment Act''), which further amended 
the Federal Civil Penalties Inflation Adjustment Act of 1990, Pub. L. 
101-410, as previously amended by the 1996 Debt Collection Improvement 
Act (collectively, the ``Prior Inflation Adjustment Act''), to improve 
the effectiveness of civil monetary penalties and to maintain their 
deterrent effect. The Inflation Adjustment Act requires agencies to: 
(1) adjust the level of civil monetary penalties with an initial 
``catch-up'' adjustment through an interim final rulemaking; and (2) 
make subsequent annual adjustments for inflation.
    The method of calculating inflation adjustments in the Inflation 
Adjustment Act differs substantially from the methods used in past 
inflation adjustment rulemakings conducted pursuant to the Prior 
Inflation Act. Previously, adjustments to civil penalties were 
conducted under rules that required significant rounding of figures. 
For example, a penalty increase that was greater than $1,000, but less 
than or equal to $10,000, would be rounded to the nearest multiple of 
$1,000. While this allowed penalties to be kept at round numbers, it 
meant that penalties would often not be increased at all if the 
inflation factor was not large enough. Furthermore, increases to 
penalties were capped at 10 percent. Over time, this formula caused 
penalties to lose value relative to total inflation.
    The Inflation Adjustment Act has removed these rounding rules; now, 
penalties are simply rounded to the nearest $1. This rounding ensures 
that penalties will be increased each year to a figure commensurate 
with the actual calculated inflation, and ensures that penalties are 
more easily and consistently updated. Furthermore, the Inflation 
Adjustment Act ``resets'' the inflation calculations by excluding prior 
inflationary adjustments under the Prior Inflation Act, which 
contributed to a decline in the real value of penalty levels. To do 
this, the Inflation Adjustment Act requires agencies to identify, for 
each penalty, the year and corresponding amount(s) for which the 
maximum penalty level or range of minimum and maximum penalties was 
established (i.e., originally enacted by Congress or by regulation) or 
last adjusted other than pursuant to the Prior Inflation Act.
    Pursuant to the Inflation Adjustment Act, the Departments have 
reviewed the civil penalties for the H-2B program that are enforced by 
the Department of Labor. This interim final rule sets forth the initial 
``catch-up'' adjustment only for these civil penalties. As required by 
the Inflation Adjustment Act, these civil penalties levels will 
subsequently be adjusted annually for inflation.

DOL's Enforcement Authority in the H-2B Program

    The Immigration and Nationality Act (INA) establishes the H-2B 
nonimmigrant classification for a non-agricultural temporary worker 
``having a residence in a foreign country which he has no intention of 
abandoning who is coming temporarily to the United States to perform . 
. . temporary [non-agricultural] service or labor if unemployed persons 
capable of performing such service or labor cannot be found in this 
country.'' 8 U.S.C. 1101(a)(15)(H)(ii)(b), INA section 
101(a)(15)(H)(ii)(b). DHS, which is charged with administration of the 
H-2B program, may grant a petition for an H-2B nonimmigrant worker 
``after consultation with appropriate agencies of the Government.'' 8 
U.S.C. 1184(c)(1), INA section 214(c)(1). DHS regulations therefore 
provide that an H-2B petition for temporary employment in the United 
States must be accompanied by an approved temporary labor certification 
from DOL. 8 CFR 214.2(h)(6)(iii)(A) and (iv)(A). The temporary labor 
certification serves as DHS's consultation with DOL with respect to 
whether a qualified U.S. worker is available to fill the petitioning H-
2B employer's job opportunity and whether a foreign worker's employment 
in the job opportunity will adversely affect the wages or working 
conditions of similarly employed U.S. workers. See 8 CFR 
214.2(h)(6)(iii)(A) and (D).\1\
---------------------------------------------------------------------------

    \1\ DHS requires DOL to structure this consultative process by 
issuing regulations. Id. (requiring the Secretary of Labor ``to 
separately establish for the temporary labor program under his or 
her jurisdiction, by regulation at 20 CFR 655, procedures for 
administering that temporary labor program under his or her 
jurisdiction'').
---------------------------------------------------------------------------

    The INA also authorizes DHS to impose appropriate remedies, 
including civil monetary penalties, against an employer for a 
substantial failure to meet the terms and conditions of employing an H-
2B nonimmigrant worker, or for a willful misrepresentation of a 
material fact in a petition for an H-2B nonimmigrant worker. 8 U.S.C. 
1184(c)(14)(A), INA section 214(c)(14)(A). The INA expressly and 
specifically authorizes DHS to delegate to DOL the aforementioned H-2B 
enforcement authorities. 8 U.S.C. 1184(c)(14)(B), INA section 
214(c)(14)(B). DHS has delegated this authority to DOL, including 
authority over the civil monetary penalty established by law at 
associated 8 U.S.C. 1184(c)(14)(A)(i), INA section 214(c)(14)(A)(i). 
See DHS, Delegation of Authority to DOL under Section 214(c)(14)(A) of 
the Immigration and Nationality Act (Jan. 16, 2009) (available in the 
online docket for this Interim Final Rule at http://www.regulations.gov, in the Supporting Documents section); see 8 CFR 
214.2(h)(6)(ix) (stating that DOL may investigate employers to enforce 
compliance with the conditions of, among other things, an H-2B petition 
and a DOL-approved temporary labor certification). Consistent with 8 
CFR 214.2(h)(6)(ix) and DHS's delegation of statutory enforcement 
authority, DOL has authority to independently set, adjust, and impose 
civil monetary penalties under 8 U.S.C. 1184(c)(14)(A)(i), INA section 
214(c)(14)(A)(i), and the Inflation Adjustment Act, amending the Prior 
Inflation Act.

Joint Issuance

    On April 29, 2015, following a court's vacatur of nearly all of 
DOL's H-2B regulations, the Departments jointly promulgated an interim 
final rule governing DOL's role in enforcing the statutory and 
regulatory rights and obligations applicable to employment under the H-
2B program. See Temporary Non-Agricultural Employment of H-2B Aliens in 
the United States, 80 FR 24,042 (Apr. 29, 2015) (codified at 8 CFR part 
214, 20 CFR part 655, and 29 CFR part 503) (``2015 H-2B IFR''). These 
regulations include a provision regarding the assessment of civil 
monetary penalties by the Department of Labor. See 29 CFR 503.23.
    As explained in the 2015 H-2B IFR, following conflicting legal 
decisions about the Department of Labor's authority to independently 
issue legislative rules to carry out its duties for the H-2B program 
under the INA, the Departments jointly issued the 2015 H-2B IFR ``to 
ensure that there can be no question about the authority for and 
validity of the regulations in this area.'' See 80 FR 24,045; see also 
24,044-47. The Departments further explained that by issuing the 2015 
H-2B IFR jointly, ``the Departments affirm that this rule is fully 
consistent with the INA and implementing DHS regulations and is vital 
to DHS's ability to faithfully

[[Page 42985]]

implement the statutory labor protections attendant to the program.'' 
Id.
    Litigation on these and related matters is ongoing. Accordingly, 
notwithstanding that DOL has authority to independently issue this 
inflation adjustment, and to ensure that there can be no question about 
the authority underlying this action, DHS and DOL are jointly issuing 
this Interim Final Rule.\2\ The Interim Final Rule implements the 
Federal Civil Penalties Inflation Adjustment Act's requirements with 
respect to the civil monetary penalty provisions found at 29 CFR 
503.23.
---------------------------------------------------------------------------

    \2\ Consistent with DOL's delegated authority under 8 U.S.C. 
1184(c)(14), INA section 214(c)(14) and the Federal Civil Penalties 
Inflation Adjustment Act, DOL will make future adjustments to the 
civil monetary penalty.
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III. Analysis

    Section 214(c)(14) of the INA, 8 U.S.C. 1184(c)(14), provides for 
the imposition of civil money penalties for a substantial failure to 
meet the terms and conditions of employing an H-2B nonimmigrant worker, 
or for a willful misrepresentation of a material fact in a petition for 
an H-2B nonimmigrant worker. This civil money penalty appears in 
regulation at 29 CFR 503.23. Applicable violations include those 
related to wages, impermissible deductions, prohibited fees and 
expenses, and improper refusal to employ or hire U.S. workers, among 
others. Existing Sec.  503.23(b), (c), and (d) provide for a civil 
money penalty not to exceed $10,000 per violation. The maximum penalty 
amount last established by statute or regulation other than the 
Inflation Adjustment Act was $10,000 in 2005 and is the same as the 
existing maximum penalty amount. See Save Our Small and Seasonal 
Businesses Act of 2005, Title IV of Pub. L. 109-13, 404 (May 11, 2005).
    To adjust the existing civil money penalty for this section, the 
Departments multiplied that maximum penalty amount by the inflation 
adjustment factor for 2005 of 1.19397, which resulted in a penalty of 
$11,940. The amount of the increase from $10,000 to $11,940 is $1,940, 
which is less than the statutory cap of 150% of the existing $10,000 
penalty, which is $15,000; accordingly, the amount of the increase is 
not limited by the statutory cap. Consequently, Sec.  503.23(b), (c), 
and (d) are revised to increase the maximum penalties for these 
violations from $10,000 to $11,940 per violation.
    The Departments invite comments on the calculations outlined in 
this interim final rule.

IV. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that the Departments consider the impact of paperwork and other 
information collection burdens imposed on the public. The Departments 
have determined that this interim final rule does not require any 
collection of information.

V. Executive Orders 12866: Regulatory Planning and Review; and 
Executive Order 13563: Improving Regulation and Regulatory Review

    Executive Order 12866 requires that regulatory agencies assess both 
the costs and benefits of significant regulatory actions. Under the 
Executive Order, a ``significant regulatory action'' is one meeting any 
of a number of specified conditions, including the following: Having an 
annual effect on the economy of $100 million or more; creating a 
serious inconsistency or interfering with an action of another agency; 
materially altering the budgetary impact of entitlements or the rights 
of entitlement recipients, or raising novel legal or policy issues.
    The Departments have determined that this interim final rule is not 
a ``significant'' regulatory action and a cost-benefit and economic 
analysis is not required. This regulation merely adjusts civil monetary 
penalties in accordance with inflation as required by the Inflation 
Adjustment Act, and has no impact on disclosure or compliance costs. 
The benefit provided by the inflationary adjustment to the maximum 
civil monetary penalties is that of maintaining the incentive for the 
regulated community to comply with the laws enforced by the 
Departments, and not allowing the incentive to be diminished by 
inflation.
    Executive Order 13563 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility to 
minimize burden.
    As provided by Section 701(b)(1)(A) of the Inflation Adjustment 
Act, the Departments considered whether to publish a notice of proposed 
rulemaking to explore whether increasing the civil monetary penalty by 
the otherwise-required amount will have a negative economic impact or 
whether the social costs of increasing the civil monetary penalty by 
the otherwise required amount outweighs the benefits. The Departments 
determined that no such proposed rule is necessary given the modest 
increases to statutory penalties provided by the Inflation Adjustment 
Act, especially given the statutory cap.
    In that context, Congress has already determined that any possible 
increase in costs is justified by the overall benefits of such 
adjustments. This interim final rule makes only the statutory changes 
outlined herein; thus there are no alternatives or further analysis 
required by E.O. 13563.

VI. Regulatory Flexibility Act and Small Business Regulatory 
Enforcement Fairness Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA), imposes 
certain requirements on Federal agency rules that are subject to the 
notice and comment requirements of the APA, 5 U.S.C. 553(b), and that 
are likely to have a significant economic impact on a substantial 
number of small entities. This interim final rule is exempt from the 
notice and comment requirements of the APA because the Inflation 
Adjustment Act directed agencies to issue an interim final rule. 
Moreover, pursuant to the Inflation Adjustment Act and 5 U.S.C. 
553(b)(3)(B), the Departments find that good cause exists for issuing 
this interim final rule without prior notice and comment. By operation 
of the Inflation Adjustment Act, the Departments must publish the 
catch-up adjustment by July 1, 2016, and the rule must be effective no 
later than August 1, 2016. Additionally, the Inflation Adjustment Act 
provides a clear formula for adjustment of the civil penalties, leaving 
the agencies little room for discretion. For these reasons, the 
Departments find that providing notice and comment before issuing the 
IFR would be impracticable and unnecessary in this situation and 
contrary to the language of the Inflation Adjustment Act.
    Therefore, the requirements of the RFA applicable to notices of 
proposed rulemaking, 5 U.S.C. 603, do not apply to this interim final 
rule. Accordingly, the Departments are not required to either certify 
that the interim final rule would not have a significant economic 
impact on a substantial number of small entities or conduct a 
regulatory flexibility analysis. Indeed, the rule only adjusts for the 
effects of inflation.

[[Page 42986]]

VII. Other Regulatory Considerations

A. The Unfunded Mandates Reform Act of 1995

    Because the interim final rule simply adjusts for inflation, it 
does not include any Federal mandate that may result in increased 
expenditures by State, local, or tribal governments; nor does it 
increase private sector expenditures by more than $100 million 
annually; nor does it significantly or uniquely affect small 
governments. Accordingly, the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1501 et seq.) requires no further agency action or analysis.

B. Executive Order 13132: Federalism

    This interim final rule does not have federalism implications 
because it does not have substantial direct effects on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. Accordingly, Executive Order 13132, Federalism, requires 
no further agency action or analysis.

C. Executive Order 13175, Indian Tribal Governments

    This interim final rule does not have ``tribal implications'' 
because it does not have substantial direct effects on one or more 
Indian tribes, on the relationship between the Federal government and 
Indian tribes, or on the distribution of power and responsibilities 
between the Federal government and Indian tribes. Accordingly, 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments, requires no further agency action or analysis.

D. The Treasury and General Government Appropriations Act of 1999: 
Assessment of Federal Regulations and Policies on Families

    This interim final rule will have no effect on family well-being or 
stability, marital commitment, parental rights or authority, or income 
or poverty of families and children. Accordingly, section 654 of the 
Treasury and General Government Appropriations Act of 1999 (5 U.S.C. 
601 note) requires no further agency action, analysis, or assessment.

E. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This interim final rule will have no adverse impact on children. 
Accordingly, Executive Order 13045, Protection of Children from 
Environmental Health Risks and Safety Risks, as amended by Executive 
Orders 13229 and 13296, requires no further agency action or analysis.

F. Environmental Impact Assessment

    This action is one of a category of actions that do not 
individually or cumulatively have a significant effect on the human 
environment. This action is therefore categorically excluded from 
further review under the National Environmental Policy Act of 1969 
(NEPA), 42 U.S.C. 4321-4375.

G. Executive Order 13211, Energy Supply

    This interim final rule has not been identified to have impacts on 
energy supply. Accordingly, Executive Order 13211 requires no further 
Agency action or analysis.

H. Executive Order 12630, Constitutionally Protected Property Rights

    This interim final rule will not implement a policy with takings 
implications. Accordingly, Executive Order 12630, Governmental Actions 
and Interference with Constitutionally Protected Property Rights, 
requires no further agency action or analysis.

I. Executive Order 12988, Civil Justice Reform Analysis

    This interim final rule was drafted and reviewed in accordance with 
Executive Order 12988, Civil Justice Reform. This interim final rule 
was written to provide a clear legal standard for affected conduct and 
was carefully reviewed to eliminate drafting errors and ambiguities, so 
as to minimize litigation and undue burden on the Federal court system. 
The Departments have determined that this interim final rule meets the 
applicable standards provided in section 3 of Executive Order 12988.

List of Subjects in 29 CFR Part 503

    Administrative practice and procedure, Aliens, Employment, Housing, 
Immigration, Labor, Penalties, Transportation, Wages.

    Accordingly, for the reasons stated in the preamble, 29 CFR part 
503 is amended as follows:

PART 503-ENFORCEMENT OF OBLIGATIONS FOR TEMPORARY NONIMMIGRANT NON-
AGRICULTURAL WORKERS DESCRIBED IN THE IMMIGRATION AND NATIONALITY 
ACT

0
1. The authority citation for part 503 is revised to read as follows:

    Authority: 8 U.S.C. 1101(a)(15)(H)(ii)(b); 8 U.S.C. 1184; 8 CFR 
214.2(h); 28 U.S.C. 2461 note (Federal Civil Penalties Inflation 
Adjustment Act of 1990); Pub. L. 114-74 at Sec.  701.


0
2. Amend Sec.  503.23 by revising paragraph (b), the first sentence of 
paragraph (c), and paragraph (d) to read as follows:


Sec.  503.23  Civil money penalty assessment.

* * * * *
    (b) Upon determining that an employer has violated any provisions 
of Sec.  503.16 related to wages, impermissible deductions or 
prohibited fees and expenses, the Administrator, WHD, may assess civil 
money penalties that are equal to the difference between the amount 
that should have been paid and the amount that actually was paid to 
such worker(s), not to exceed $11,940 per violation.
    (c) Upon determining that an employer has terminated by layoff or 
otherwise or has refused to employ any worker in violation of Sec.  
503.16(r), (t), or (v), within the periods described in those sections, 
the Administrator, WHD may assess civil money penalties that are equal 
to the wages that would have been earned but for the layoff or failure 
to hire, not to exceed $11,940 per violation. * * *
    (d) The Administrator, WHD, may assess civil money penalties in an 
amount not to exceed $11,940 per violation for any other violation that 
meets the standards described in Sec.  503.19.
* * * * *

    Signed at Washington, DC this 28th day of June, 2016.
Jeh Charles Johnson,
Secretary of Homeland Security.
    Signed at Washington, DC this 23 day of June, 2016.
Thomas E. Perez,
Secretary of Labor.
[FR Doc. 2016-15679 Filed 6-30-16; 8:45 am]
 BILLING CODE 4510-27-9111-97-P