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What are the penalties for ERISA violations?

On Behalf of | Jul 16, 2020 | ERISA |

New York residents have several protections as workers. Many laws are in place that help keep you and your rights safe. The Employee Retirement Income Security Act (ERISA) is one of these things.

This labor law establishes standards for pension plans. It sets minimum pension amounts for private industries. It also oversees tax effect transactions. But what happens when you violate ERISA? What are the penalties?

Criminal punishments and civil penalties

The Department of Labor discusses violations of ERISA. They also talk of with the enforcement of ERISA. You may end up penalized if you violate provisions of the law. First, there are two types of penalties you may face. Civil penalties encompass one set of punishments. Criminal punishments encompass the other.

Civil penalties often involve things like forced payments or fines. The court may order you to make a payment to a beneficiary or plan member. They may also order you to change certain practices or procedures. The fine you face often depends on degree of willfulness. The more willing you were to commit the crime, the higher the penalty.

Fines and time in jail

Criminal punishments can include time in jail. The penalty depends on the violation you committed. It also depends on any corresponding provisions in federal law. But you can face fines of up to $10,000 in some cases. Individuals who violate ERISA may also face up to 10 years in prison. Their fines may range up to $100,000. When companies violate ERISA, the cost is much higher. A company may face fines of up to $500,000. In other words, violating ERISA is a costly mistake.