PART 578—TIP RETENTION, MINIMUM WAGE, AND OVERTIME VIOLATIONS—CIVIL MONEY PENALTIES Authority: 29 U.S.C. 216(e), as amended by sec. 9, Pub. L. 101-157, 103 Stat. 938, sec. 3103, Pub. L. 101-508, 104 Stat. 1388-29, sec. 302(a), Pub. L. 110-233, 122 Stat. 920, and sec. 1201, Div. S., Tit. XII, Pub. L. 115-141, 132 Stat. 348; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note), as amended by sec. 31001(s), Pub. L. 104-134, 110 Stat. 1321-358, 1321-373, and sec. 701, Pub. L. 114-74, 129 Stat 584. Source: 57 FR 49129, Oct. 29, 1992, unless otherwise noted. § 578.1 What does this part cover? Section 9 of the Fair Labor Standards Amendments of 1989 amended section 16(e) of the Act to provide that any person who repeatedly or willfully violates the minimum wage (section 6) or overtime provisions (section 7) of the Act shall be subject to a civil money penalty not to exceed $1,100 for each such violation. In 2001, the Wage and Hour Division (WHD) adjusted this penalty for inflation pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410), as amended by the Debt Collection Improvement Act of 1996 (Pub. L. 104-134, section 31001(s)). The Genetic Information Nondiscrimination Act of 2008 amended section 16(e) of the Act to reflect this increase. See [85 FR 86791, Dec. 30, 2020] § 578.2 Definitions. (a) Act et seq. (b) Administrator (c) Person [57 FR 49129, Oct. 29, 1992, as amended at 82 FR 2229, Jan. 9, 2017] § 578.3 What types of violations may result in a penalty being assessed? (a) In general. (2) A penalty of up to $2,515 per violation may be assessed against any person who repeatedly or willfully violates section 6 (minimum wage) or section 7 (overtime) of the Act. The amount of the penalties stated in paragraphs (a)(1) and (2) of this section will be determined by applying the criteria in § 578.4. (b) Repeated violations. (1) Where the employer has previously violated section 6 or section 7 of the Act, provided the employer has previously received notice, through a responsible official of the Wage and Hour Division or otherwise authoritatively, that the employer allegedly was in violation of the provisions of the Act; or (2) Where a court or other tribunal has made a finding that an employer has previously violated section 6 or section 7 of the Act, unless an appeal therefrom which has been timely filed is pending before a court or other tribunal with jurisdiction to hear the appeal, or unless the finding has been set aside or reversed by such appellate tribunal. (c) Willful violations. (2) For purposes of this section, the employer's receipt of advice from a responsible official of the Wage and Hour Division to the effect that the conduct in question is not lawful, among other situations, can be sufficient to show that the employer's conduct is knowing, but is not automatically dispositive. (3) For purposes of this section, reckless disregard of the requirements of the Act means, among other situations, that the employer should have inquired further into whether its conduct was in compliance with the Act and failed to make adequate further inquiry. [86 FR 52986, Sept. 24, 2021, as amended at 87 FR 2335, Jan. 14, 2022; 88 FR 2217, Jan. 13, 2023; 89 FR 1816, Jan. 11, 2024; 90 FR 1861, Jan. 10, 2025] § 578.4 Determination of penalty. (a) In determining the amount of penalty to be assessed for any violation of section 3(m)(2)(B) or repeated or willful violation of section 6 or section 7 of the Act, the Administrator shall consider the seriousness of the violations and the size of the employer's business. (b) Where appropriate, the Administrator may also consider other relevant factors in assessing the penalty, including but not limited to the following: (1) Whether the employer has made efforts in good faith to comply with the provisions of the Act and this part; (2) The employer's explanation for the violations, including whether the violations were the result of a bona fide dispute of doubtful legal certainty; (3) The previous history of violations, including whether the employer is subject to injunction against violations of the Act; (4) The employer's commitment to future compliance; (5) The interval between violations; (6) The number of employees affected; and (7) Whether there is any pattern to the violations. [57 FR 49129, Oct. 29, 1992, as amended at 86 FR 52987, Sept. 24, 2021]