Rule2025-13707
Civil Monetary Penalty Inflation Adjustment
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 22, 2025
Effective
July 22, 2025
Issuing agencies
Merit Systems Protection Board
Abstract
This final rule adjusts the level of civil monetary penalties (CMPs) in regulations maintained and enforced by the Merit Systems Protection Board (MSPB) with an annual adjustment under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act) and Office of Management and Budget (OMB) guidance.
Full Text
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<title>Federal Register, Volume 90 Issue 138 (Tuesday, July 22, 2025)</title>
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[Federal Register Volume 90, Number 138 (Tuesday, July 22, 2025)]
[Rules and Regulations]
[Pages 34347-34348]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13707]
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Rules and Regulations
Federal Register
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having general applicability and legal effect, most of which are keyed
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Federal Register / Vol. 90, No. 138 / Tuesday, July 22, 2025 / Rules
and Regulations
[[Page 34347]]
MERIT SYSTEMS PROTECTION BOARD
5 CFR Part 1201
Civil Monetary Penalty Inflation Adjustment
AGENCY: Merit Systems Protection Board.
ACTION: Final rule.
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SUMMARY: This final rule adjusts the level of civil monetary penalties
(CMPs) in regulations maintained and enforced by the Merit Systems
Protection Board (MSPB) with an annual adjustment under the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the
2015 Act) and Office of Management and Budget (OMB) guidance.
DATES: This final rule is effective on July 22, 2025.
FOR FURTHER INFORMATION CONTACT: Gina K. Grippando, Clerk of the Board,
Merit Systems Protection Board, 1615 M Street NW, Washington, DC 20419;
phone: (202) 653-7200; fax: (202) 653-7130; or email: <a href="/cdn-cgi/l/email-protection#0f627c7f6d4f627c7f6d21686079"><span class="__cf_email__" data-cfemail="c5a8b6b5a785a8b6b5a7eba2aab3">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Penalties Inflation Adjustment Act of 1990 (the
1990 Act), Pub. L. 101-410, provided for the regular evaluation of CMPs
by Federal agencies. Periodic inflationary adjustments of CMPs ensure
that the consequences of statutory violations adequately reflect the
gravity of such offenses and that CMPs are properly accounted for and
collected by the Federal Government. In April 1996, the 1990 Act was
amended by the Debt Collection Improvement Act of 1996 (the 1996 Act),
Pub. L. 104-134, requiring Federal agencies to adjust their CMPs at
least once every four years. However, because inflationary adjustments
to CMPs were statutorily capped at ten percent of the maximum penalty
amount, but only required to be calculated every four years, CMPs in
many cases did not correspond with the true measure of inflation over
the preceding four-year period, leading to a decline in the real value
of the penalty. To remedy this decline, the 2015 Act (section 701 of
Pub. L. 114-74) requires agencies to adjust CMP amounts with annual
inflationary adjustments through a rulemaking using a methodology
mandated by the legislation. The purpose of these adjustments is to
maintain the deterrent effect of civil penalties.
A civil monetary penalty is ``any penalty, fine, or other
sanction'' that: (1) ``is for a specific amount'' or ``has a maximum
amount'' under Federal law; and (2) a Federal agency assesses or
enforces ``pursuant to an administrative proceeding or a civil action
in the Federal courts.'' 28 U.S.C. 2461 note.
The MSPB is authorized to assess CMPs pursuant to 5 U.S.C.
1215(a)(3) and 5 U.S.C. 7326 in disciplinary actions brought by the
Special Counsel. The corresponding MSPB regulation for both CMPs is 5
CFR 1201.126(a). As required by the 2015 Act, and pursuant to guidance
issued by OMB, MSPB is now making an annual adjustment for 2025,
according to the prescribed formulas.
II. Calculation of Adjustment
The CMP listed in 5 U.S.C. 1215(a)(3) was established in 1978 with
the enactment of the Civil Service Reform Act of 1978 (CSRA), Pub. L.
95-454, section 202(a), 92 Stat. 1121-30 (Oct. 13, 1978), and
originally codified at 5 U.S.C. 1207(b). That CMP was last amended by
section 106 of the Whistleblower Protection Enhancement Act of 2012,
Pub. L. 112-199, 12 Stat. 1468 (Nov. 27, 2012), now codified at 5
U.S.C. 1215(a)(3), which provided for a CMP ``not to exceed $1,000.''
The CMP authorized in 5 U.S.C. 7326 was established in 2012 by section
4 of the Hatch Act Modernization Act of 2012 (Hatch Act), Pub. L. 112-
230, 126 Stat. 1617 (Dec. 28, 2012), which provided for a CMP ``not to
exceed $1,000.'' On February 14, 2024, MSPB issued a final rule which
increased the maximum CMP allowed under both 5 U.S.C. 1215(a)(3) and 5
U.S.C. 7326 to $1,330 for the year 2024. See 89 FR 11163 (February 14,
2024). This increase reflected the annual increase for the year 2024
mandated by the 2015 Act.
On December 17, 2024, OMB issued guidance on calculating the annual
inflationary adjustment for 2025. See Memorandum from Shalanda D.
Young, Director, OMB, to Heads of Executive Departments and Agencies
re: Implementation of Penalty Inflation Adjustments for 2025, Pursuant
to the Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015, M-25-02 (Dec. 17, 2024). Therein, OMB notified agencies
that the annual adjustment multiplier for 2025, based on the Consumer
Price Index for All Urban Consumers (CPI-U), is 1.02598 and that the
2025 annual adjustment amount is obtained by multiplying the 2024
penalty amount by the 2025 annual adjustment multiplier, and rounding
to the nearest dollar. Therefore, the new maximum penalty under the
CSRA and the Hatch Act is $1,330 x 1.02598 = $1,365.00.
III. Effective Date of Penalties
The revised CMP amounts will go into effect on July 22, 2025. All
violations for which CMPs are assessed after the effective date of this
rule will be assessed at the adjusted penalty level regardless of
whether the violation occurred before the effective date.
IV. Procedural Requirements
A. Administrative Procedure Act
Pursuant to 5 U.S.C. 553(b), MSPB has determined that good cause
exists for waiving the general notice of proposed rulemaking and public
comment procedures as to these technical amendments. The notice and
comment procedures are being waived because Congress has specifically
exempted agencies from these requirements when implementing the 2015
Act. The 2015 Act explicitly requires the agency to make subsequent
annual adjustments notwithstanding 5 U.S.C. 553, the section of the
Administrative Procedure Act that normally requires agencies to engage
in notice and comment. It is also in the public interest that the
adjusted rates for CMPs under the CSRA and the Hatch Act become
effective as soon as possible to maintain their effective deterrent
effect.
B. Regulatory Impact Analysis: Executive Order 12866
The MSPB has determined that this is not a significant regulatory
action under
[[Page 34348]]
E.O. 12866. Therefore, no regulatory impact analysis is required.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) requires an agency to prepare
a regulatory flexibility analysis for rules unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. The RFA applies only to rules for
which an agency is required to first publish a proposed rule. See 5
U.S.C. 603(a) and 604(a). As discussed above, the 2015 Act does not
require agencies to first publish a proposed rule when adjusting CMPs
within their jurisdiction. Thus, the RFA does not apply to this final
rule.
D. Paperwork Reduction Act
This document does not contain information collection requirements
subject to the Paperwork Reduction Act of 1995, Pub. L. 104-13 (44
U.S.C. Chapter 35).
E. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801, et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a ``major rule'' as defined by 5 U.S.C. 804(2).
List of Subjects in 5 CFR Part 1201
Administrative practice and procedure, Civil rights, Government
employees.
For the reasons set forth above, 5 CFR part 1201 is amended as
follows:
PART 1201--PRACTICES AND PROCEDURES
0
1. The authority citation for part 1201 continues to read as follows:
Authority: 5 U.S.C. 1204, 1305, and 7701, and 38 U.S.C. 4331,
unless otherwise noted.
Sec. 1201.126 [Amended]
0
2. Amend Sec. 1201.126, in paragraph (a), by removing ``$1,330'' and
adding in its place ``$1,365''.
Gina K. Grippando,
Clerk of the Board.
[FR Doc. 2025-13707 Filed 7-21-25; 8:45 am]
BILLING CODE 7401-01-P
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