Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Rules and Regulations 12537 

and Seyfarth Shaw on behalf of the Coalition for 

Workforce Innovation, argued that the Department 

had not based its reasons for proposing a delay on 

those enumerated in OMB Memorandum M–21–14. 

But the issues the Department indicated it would 

consider if allowed additional time, including the 

FLSA’s purpose, the costs and benefits of the rule, 

and the clarity the rule does or does not provide, 

are among the types of issues referenced in the 

memorandum. See OMB Memorandum M–21–14 

(directing agencies to consider in deciding whether 

delay of a rule’s effective date is appropriate, among 

other things, whether ‘‘the rule reflected proper 

consideration of all relevant facts,’’ ‘‘the rule 

reflected due consideration of the agency’s statutory 

or other legal obligations,’’ ‘‘the rule is based on a 

reasonable judgment about the legally relevant 

policy considerations,’’ and ‘‘objections to the rule 

were adequately considered’’). 

Some commenters raised procedural 

objections to the Department’s proposed 

delay. The Associated Builders and 

Contractors, the Financial Services 

Institute, and Littler Mendelson, P.C.’s 

Workplace Policy Institute asserted that 

the 19-day comment period for this 

rulemaking was insufficient, and 

critiqued the Department’s statement in 

the NPRM that ‘‘WHD will consider 

only comments about its proposal to 

delay the rule’s effective date.’’ 86 FR 

8327. The Department believes that the 

19-day comment period did provide a 

meaningful opportunity to comment on 

the proposed delay. The Department 

received over 1,500 comments in 

response to the NPRM proposing to 

delay the January 2021 Rule’s effective 

date, comparable to the approximately 

1,800 comments it received in response 

to the substantive notice of proposed 

rulemaking that it published in 

September 2020. See 85 FR 60600. 

Moreover, given the Independent 

Contractor Rule’s original March 8, 2021 

effective date, it would have been 

impracticable to afford a longer 

comment period. Had the Department 

allowed for a longer comment period, 

the Independent Contractor Rule would 

have taken effect before the delay could 

begin, which would have defeated the 

purpose of this rule and caused 

additional confusion for regulated 

entities. As to the issue of the scope of 

comments sought in this rulemaking, 

the Department sought comments about, 

and considered whether, issues of 

policy, law, and fact warrant an 

extension of the Independent Contractor 

Rule’s original effective date by 60 days. 

If after having had additional time to 

consider the January 2021 Rule, the 

Department decides to propose any 

changes to the January 2021 Rule, it will 

at that point solicit comments on its 

substantive proposal. 

Other commenters, including Littler 

Mendelson, P.C. and the National 

Federation of Independent Business, 

asserted that any delay to the 

Independent Contractor Rule’s March 8, 

2021 effective date must be published at 

least 30 days before such a delay takes 

effect. The Department disagrees. 

Section 553(d) of the Administrative 

Procedure Act provides that substantive 

rules should take effect not less than 30 

days after the date they are published in 

the Federal Register unless ‘‘otherwise 

provided by the agency for good cause 

found.’’ 5 U.S.C. 553(d)(3). Even if this 

provision were to apply, the Department 

finds that it would have good cause to 

make this rule effective immediately 

upon publication. Like allowing for a 

longer comment period, allowing for a 

30-day delay between publication and 

the effective date of this rulemaking 

would result in the January 2021 Rule 

taking effect before the delay begins, 

which would undermine this rule’s 

fundamental purpose of delaying the 

effective date before the Independent 

Contractor Rule takes effect in accord 

with the Regulatory Freeze 

Memorandum and result in additional 

confusion for regulated entities. The 

Regulatory Freeze Memorandum was 

issued on January 20, 2021, only 47 

days before the rule’s original effective 

date of March 8, 2021. It would not have 

been practicable to issue an NPRM 

proposing to delay the Independent 

Contractor Rule and allow for ample 

time for public comment on that 

proposal in time to publish a final rule 

not less than 30 days before March 8. 

Moreover, this rulemaking merely 

implements a 60-day delay of the 

Independent Contractor Rule, rather 

than itself imposing any new 

compliance obligations on the regulated 

community. Therefore, the Department 

finds that a lapse between publication 

and the effective date of this rule 

delaying the Independent Contractor 

Rule’s effective date is unnecessary. 

Because allowing for a 30-day period 

between publication and the effective 

date of this rulemaking is both 

unnecessary and impracticable, there is 

good cause to make this final rule 

delaying the Independent Contractor 

Rule’s effective date effective 

immediately upon publication. 

After reviewing timely comments 

submitted, the Department has decided 

to delay the Independent Contractor 

Rule’s effective date from March 8, 

2021, to May 7, 2021, as proposed. This 

delay will allow the Department 

additional time to review the multiple 

issues of law, policy, and fact that 

warrant additional review and 

consideration in accordance with the 

Regulatory Freeze Memorandum before 

the Independent Contractor Rule goes 

into effect. 

Signed this 2nd day of March, 2021. 

Jessica Looman, 

Principal Deputy Administrator, Wage and 

Hour Division. 

[FR Doc. 2021–04608 Filed 3–2–21; 4:15 pm] 

BILLING CODE 4510–27–P 

DEPARTMENT OF THE TREASURY 

Office of the Secretary of the Treasury 

31 CFR Parts 16, 27, and 50 

Inflation Adjustment of Civil Monetary 

Penalties 

AGENCY: Departmental Offices Treasury. 

ACTION: Final rule; direct final rule. 

SUMMARY: The Department of the 

Treasury (‘‘Department’’ or ‘‘Treasury’’) 

publishes this final rule to adjust its 

civil monetary penalties (‘‘CMPs’’) for 

inflation as mandated by the Federal 

Civil Penalties Inflation Adjustment Act 

of 1990, as amended by the Federal 

Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015 (collectively 

referred to herein as ‘‘the Act’’). The 

Department also publishes this direct 

final rule to implement the inflation 

adjustment for the civil monetary 

penalties that may be assessed under 31 

CFR part 16 and updates the inflation 

adjustments through 2021. 

DATES: Effective dates: The final rule 

amendments to 31 CFR part 27 and 31 

CFR part 50 are effective March 4, 2021. 

The direct final rule amendments to 

31 CFR part 16 are effective May 3, 

2021. 

Comments due: Written comments are 

due on or before April 5, 2021. If the 

Department receives substantive adverse 

comment, we will publish a timely 

withdrawal in the Federal Register 

informing the public that this direct 

final rule will not take effect. 

ADDRESSES: You may submit comments 

on the amendments to 31 CFR part 16 

by any of the following methods: 

—Federal eRulemaking Portal: http:// 

www.regulations.gov. 

—Mail: Richard Dodson, Senior 

Counsel, General Law, Ethics, and 

Regulation, Department of the Treasury, 

1500 Pennsylvania Avenue NW, 

Washington, DC 20220. 

The www.regulations.gov site will 

accept comments until 11:59 p.m. 

Eastern Time on the comment due date. 

Received comments, including 

attachments and other supporting 

materials, are part of the public record 

and subject to public disclosure. Do not 

enclose any information in your 

comments or supporting materials that 

you consider confidential or 


jbell on DSKJLSW7X2PROD with RULES
12538 Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Rules and Regulations 

1However, the increased CMPs apply only with 

respect to underlying violations occurring after the 

date of enactment of the 2015 Act, i.e., after 

November 2, 2015. 

2OMB Memoranda regarding the initial catch-up 

and yearly inflation adjustments include M–16–06 

(Feb. 24, 2016), M–17–11 (Dec. 16, 2016), M–18–03 

(Dec. 15, 2017), M–19–04 (Dec. 14, 2018), M–20– 

05 (Dec. 16, 2019), and M–21–10 (Dec. 23, 2020). 

inappropriate for public disclosure. 

Properly submitted comments will be 

available for inspection and 

downloading at http://

www.regulations.gov. The Department 

will consolidate all received comments 

and make them available without 

change. Commenters are encouraged to 

submit comments electronically via 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: For 

information regarding the Terrorism 

Risk Insurance Program’s CMPs, contact 

Richard Ifft, Senior Insurance 

Regulatory Policy Analyst, Federal 

Insurance Office, Room 1410 MT, 

Department of the Treasury, 1500 

Pennsylvania Avenue NW, Washington, 

DC 20220, at (202) 622–2922 (not a tollfree number), or Lindsey Baldwin, 

Senior Insurance Regulatory Policy 

Analyst, Federal Insurance Office, at 

(202) 622–3220 (not a toll free number). 

Persons who have difficulty hearing or 

speaking may access these numbers via 

TTY by calling the toll-free Federal 

Relay Service at (800) 877–8339. 

For information regarding the 

Treasury-wide CMPs, contact Richard 

Dodson, Senior Counsel, General Law, 

Ethics, and Regulation, 202–622–9949. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In order to improve the effectiveness 

of CMPs and to maintain their deterrent 

effect, the Federal Civil Penalties 

Inflation Adjustment Act of 1990, 28 

U.S.C. 2461 note (‘‘the Inflation 

Adjustment Act’’), as amended by the 

Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 

2015 (Pub. L. 114–74) (‘‘the 2015 Act’’), 

requires Federal agencies to adjust each 

CMP provided by law within the 

jurisdiction of the agency. The 2015 Act 

requires agencies to adjust the level of 

CMPs with an initial ‘‘catch-up’’ 

adjustment through an interim final 

rulemaking and to make subsequent 

annual adjustments for inflation, 

without needing to provide notice and 

the opportunity for public comment 

required by 5 U.S.C. 553. The 

Department’s initial catch-up 

adjustment interim final rules were 

published on December 7, 2016 

(Departmental Offices) (81 FR 88600), 

and for 31 CFR part 27, on February 11, 

2019 (84 FR 3105). The Department’s 

2018 annual adjustment was published 

on March 19, 2018 (83 FR 11876), the 

Department’s 2019 annual adjustment 

was published on April 17, 2019 (84 FR 

15955), and the Department’s 2020 

annual adjustment was published on 

February 21, 2020 (85 FR 10063). This 

rule constitutes the Department’s 2021 

annual adjustment. The 2015 Act 

provides that any increase in a CMP 

shall apply to CMPs that are assessed 

after the date the increase takes effect, 

regardless of whether the underlying 

violation predated such increase.1

This rule also amends regulations that 

provide civil penalties for false, 

fictitious, or fraudulent claims or 

written statements under the 

Department’s Regulations Implementing 

the Program Fraud Civil Remedies Act 

of 1986, at 31 CFR part 16. Adjustments 

to CMPs under that Part were 

inadvertently omitted from the 

Department’s initial catch-up 

adjustment and its subsequent annual 

adjustments. In particular, this rule 

adjusts for inflation the maximum 

amount of the civil monetary penalties 

that may be assessed under 31 CFR part 

16, and it updates the inflation 

adjustments through 2021 in accordance 

with instructions from the Office of 

Management and Budget. 

Treasury is currently authorized to 

impose CMPs against persons who make 

false, fictitious, or fraudulent claims or 

who make false, fictitious, or fraudulent 

written statements, pursuant to 31 

U.S.C. 3802(a). The maximum CMPs 

under this statute were established on 

October 21, 1986, and they have not 

been adjusted. The maximum CMPs 

established were $5,000 for each 

qualifying false claim or false written 

statement. 

II. Method of Calculation 

The method of calculating CMP 

adjustments applied in this final rule is 

required by the 2015 Act. Under the 

2015 Act and the Office of Management 

and Budget guidance required by the 

2015 Act, annual inflation adjustments 

subsequent to the initial catch-up 

adjustment are to be based on the 

percent change between the Consumer 

Price Index for all Urban Consumers 

(‘‘CPI–U’’) for the October preceding the 

date of the adjustment and the prior 

year’s October CPI–U. As set forth in 

Office of Management and Budget 

Memorandum M–21–10 of December 

23, 2020, the adjustment multiplier for 

2021 is 1.01182. In order to complete 

the 2021 annual adjustment, each 

current CMP is multiplied by the 2021 

adjustment multiplier. Under the 2015 

Act, any increase in CMP must be 

rounded to the nearest multiple of $1. 

With regard to the CMPs authorized 

by 31 U.S.C. 3802(a), adjustments had to 

be made back to 2016. Pursuant to OMB 

Guidance, the relevant inflation factor is 

2.15628 for the initial catch-up 

adjustment. Because application of the 

factor would result in an adjustment of 

greater than 150% for both 31 U.S.C. 

3802(a) CMPs, the initial adjustment of 

these penalties is limited to 150%. The 

relevant inflation factors for 2017 

through 2021 are 1.01636 (2017), 

1.02041 (2018), 1.02522 (2019), 1.01764 

(2020), and 1.01182 (2021).2

With respect to the $5,000 CMPs, 

applying the initial 150% adjustment 

would result in a maximum penalty 

amount of $7,500. Multiplying that 

amount by the 2017 factor of 1.01636 

and rounding to the nearest dollar 

would yield a maximum penalty 

amount of $7,623. Multiplying that 

amount by the 2018 factor of 1.02041 

and rounding yields a maximum 

penalty amount of $7,779. Multiplying 

that amount by the 2019 factor of 

1.02522 and rounding yields a 

maximum penalty amount of $7,975. 

Multiplying that amount by the 2020 

factor of 1.01764 and rounding yields a 

maximum penalty amount of $8,116. 

Finally, applying the 2021 factor of 

1.01182 to that amount results in an 

adjusted maximum penalty of $8,212. 

Procedural Matters 

1. Administrative Procedure Act 

The Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 

2015 (Section 701(b)) requires agencies 

to make annual adjustments for inflation 

to CMPs, without needing to provide 

notice and the opportunity for public 

comment and a delayed effective date 

required by 5 U.S.C. 553. Additionally, 

the methodology used for adjusting 

CMPs for inflation is provided by 

statute, with no discretion provided to 

agencies regarding the substance of the 

adjustments for inflation to CMPs. The 

Department is charged only with 

performing ministerial computations to 

determine the dollar amount of 

adjustments for inflation to CMPs. 

Accordingly, prior public notice, an 

opportunity for public comment, and a 

delayed effective date are not required 

for this rule, with the exception of the 

initial catch-up adjustment to 31 CFR 

part 16. 

2. Regulatory Flexibility Act 

Because no notice of proposed 

rulemaking is required, the provisions 

of the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) do not apply. 


jbell on DSKJLSW7X2PROD with RULES
Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Rules and Regulations 12539 

3. Executive Order 12866 

This rule is not a significant 

regulatory action as defined in section 

3.f of Executive Order 12866. 

4. Paperwork Reduction Act 

The provisions of the Paperwork 

Reduction Act of 1995, Public Law 104– 

13, 44 U.S.C. Chapter 35, and its 

implementing regulations, 5 CFR part 

1320, do not apply to this rule because 

there are no new or revised 

recordkeeping or reporting 

requirements. 

5. Direct Final Procedures 

Treasury is issuing the amendments 

to 31 CFR part 16 as a direct final rule. 

The effective date of this rule is May 3, 

2021 without further notice, unless 

Treasury receives written adverse 

comments before April 5, 2021. 

If Treasury receives timely written 

adverse comments on the amendments 

to 31 CFR part 16, Treasury will 

withdraw the regulation before its 

effective date. 

List of Subjects 

31 CFR Part 16 

Administrative Practice and 

Procedure, Claims, Fraud, Penalties. 

31 CFR Part 27 

Administrative Practice and 

Procedure, Penalties. 

31 CFR Part 50 

Insurance, Terrorism. 

Authority and Issuance 

For the reasons set forth in the 

preamble, parts 16, 27, and 50 of title 31 

of the Code of Federal Regulations are 

amended as follows: 

PART 16—REGULATIONS 

IMPLEMENTING THE PROGRAM 

FRAUD CIVIL REMEDIES ACT OF 1986 

■ 1. The authority citation for part 16 

continues to read as follows: 

Authority: 31 U.S.C. 3801–3812. 

■ 2. Effective May 3, 2021 amend § 16.3 

by revising paragraphs (a)(1)(iv) and 

(b)(1)(ii) to read as follows: 

§ 16.3 Basis for civil penalties and 

assessments. 

(a) * * * 

(1) * * * 

(iv) Is for payment for the provision 

of property or services which the person 

has not provided as claimed, shall be 

subject, in addition to any other remedy 

that may be prescribed by law, to a civil 

penalty of not more than $8,212 for each 

such claim. 

* * * * * 

(b) * * * (1) * * * 

(ii) Includes or is accompanied by an 

express certification or affirmation of 

the truthfulness and accuracy of the 

content of the statement, shall be 

subject, in addition to any other remedy 

that may be prescribed by law, to a civil 

penalty of not more than $8,212 for each 

such statement. 

* * * * * 

PART 27—CIVIL PENALTY 

ASSESSMENT FOR MISUSE OF 

DEPARTMENT OF THE TREASURY 

NAMES, SYMBOLS, ETC. 

■ 3. The authority citation for part 27 

continues to read as follows: 

Authority: 31 U.S.C. 321, 333. 

■ 4. Amend § 27.3 by revising paragraph 

(c) to read as follows: 

§ 27.3 Assessment of civil penalties. 

* * * * * 

(c) Civil Penalty. An assessing official 

may impose a civil penalty on any 

person who violates the provisions of 

paragraph (a) of this section. The 

amount of a civil monetary penalty shall 

not exceed $8,212 for each and every 

use of any material in violation of 

paragraph (a), except that such penalty 

shall not exceed $41,056 for each and 

every use if such use is in a broadcast 

or telecast. 

* * * * * 

PART 50—TERRORISM RISK 

INSURANCE PROGRAM 

■ 5. The authority citation for part 50 is 

revised to read as follows: 

Authority: 5 U.S.C. 301; 31 U.S.C. 321; 

Title I, Pub. L. 107–297, 116 Stat. 2322, as 

amended by Pub. L. 109–144, 119 Stat. 2660, 

Pub. L. 110–160, 121 Stat. 1839, Pub. L. 114– 

1, 129 Stat. 3, and Pub. L. 116–94, 133 Stat. 

2534 (15 U.S.C. 6701 note); Pub. L. 114–74, 

129 Stat. 601, Title VII (28 U.S.C. 2461 note). 

■ 6. Amend § 50.83 by revising 

paragraph (a) to read as follows: 

§ 50.83 Adjustment of civil monetary 

penalty amount. 

(a) Inflation Adjustment. Any penalty 

under the Act and these regulations may 

not exceed the greater of $1,436,220 

and, in the case of any failure to pay, 

charge, collect or remit amounts in 

accordance with the Act or these 

regulations such amount in dispute. 

* * * * * 

John T. Norris, 

Assistant Secretary for Management (Acting). 

[FR Doc. 2021–04377 Filed 3–3–21; 8:45 am] 

BILLING CODE 4810–AK–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[USCG–2021–0130] 

RIN 1625–AA00 

Safety Zone; Atlantic Intracoastal 

Waterway, Horry County, SC 

AGENCY: Coast Guard, Department of 

Homeland Security (DHS). 

ACTION: Temporary final rule. 

SUMMARY: The Coast Guard is 

establishing an emergency temporary 

safety zone that includes all waters of 

the Waccamaw River from Enterprise 

Landing at Atlantic Intracoastal 

Waterway (AICW) statute mile 375 

north to Fantasy Harbour Fixed Bridge 

at AICW statute mile 366. The safety 

zone is needed to protect persons and 

property during a period of high water 

in the area caused by heavy rainfall and 

runoff. Vessels operating within the 

zone shall proceed at speeds that do not 

create a wake. Vessels that desire to 

transit this zone at speeds that create a 

wake, shall first seek authorization from 

the Captain of the Port (COTP) 

Charleston. 

DATES: This rule is effective without 

actual notice from March 4, 2021 

through March 7, 2021. For the 

purposes of enforcement, actual notice 

will be used from March 1, 2021 until 

March 4, 2021. 

ADDRESSES: To view documents 

mentioned in this preamble as being 

available in the docket, go to https://

www.regulations.gov, type USCG–2021– 

0130 in the ‘‘SEARCH’’ box and click 

‘‘SEARCH.’’ Click on Open Docket 

Folder on the line associated with this 

rule. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule call or 

email Lieutenant Chad Ray, Sector 

Charleston Office of Waterways 

Management, Coast Guard; telephone 

(843) 740–3184, email Chad.L.Ray@

uscg.mil. 

SUPPLEMENTARY INFORMATION: 

I. Table of Abbreviations 

CFR Code of Federal Regulations 

DHS Department of Homeland Security 

FR Federal Register 

NPRM Notice of proposed rulemaking 

§ Section 

U.S.C. United States Code 


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