When a Wage and Hour Division investigation turns up a violation that can draw a civil money penalty — a violation of section 3(m)(2)(B) of the Act (the Act’s tip retention provisions), or a repeated or willful violation of the minimum-wage requirement in section 6 or the overtime requirement in section 7 — the Administrator (the Administrator of the Wage and Hour Division, U.S. Department of Labor) does not simply pick a number. A violation of section 3(m)(2)(B) can draw a penalty of up to $1,409 per violation; a repeated or willful violation of section 6 or section 7 can draw up to $2,515 per violation. A violation counts as “repeated” where the employer previously violated section 6 or section 7 and had previously received notice — through a responsible Wage and Hour Division official or otherwise authoritatively — that it allegedly was in violation of the Act. It also counts as repeated where a court or other tribunal has already found a violation — unless a timely-filed appeal of that finding is pending before a court or tribunal with jurisdiction to hear it, or the finding has been set aside or reversed by such appellate tribunal. A violation counts as “willful” where the employer knew its conduct was prohibited by the Act or showed reckless disregard for the Act’s requirements — considering all of the facts and circumstances, including whether the employer should have inquired further into whether its conduct was in compliance with the Act and failed to make adequate further inquiry. Under § 578.3(c)(2), an employer’s receipt of advice from a responsible Wage and Hour Division official that its conduct was unlawful can by itself be enough to show the employer’s conduct was knowing, but it does not by itself prove the employer was willful.

Setting the actual dollar figure within those ceilings is a judgment call the regulation structures rather than leaves open-ended. The Administrator must consider the seriousness of the violations and the size of the employer’s business, and may also weigh other relevant factors: whether the employer made good-faith efforts to comply, the employer’s own explanation for the violations (including whether they arose from a bona fide dispute of doubtful legal certainty — that is, a genuine disagreement about what the law required), the employer’s history of previous violations and whether it is already subject to an injunction (a court order barring further violations), its commitment to future compliance, the interval between violations, the number of employees affected, and whether the violations follow any pattern.

Once the Administrator settles on a penalty, the employer does not simply receive a bill — it receives a written notice of determination, served in person or by certified mail. If certified mail is refused, the notice is deemed received on the date delivery was attempted, and the Administrator may then serve it by regular mail. An employer that wants to challenge the determination — either to contest it directly or to preserve the right to have a court review it later — must submit a written exception (a written objection to the determination) and request for an administrative hearing to the official who issued the notice, at the Wage and Hour Division address shown on it, no later than 15 days after the notice was received. That deadline gets no extra days for mail delivery. The request must be dated, legibly written or typewritten, identify the specific issues in the notice being disputed, state the specific reasons the employer believes the determination is wrong, be signed by the employer or an authorized representative, and include an address for further communications. Filing on time matters beyond paperwork: it makes the Administrator’s determination inoperative unless and until the case is dismissed or an administrative law judge (a Department of Labor official appointed to preside over the hearing) issues a decision affirming it — the penalty does not take effect while a timely-filed challenge is pending.