Why It Matters
A federal funding lapse has created a critical gap in child labor enforcement. According to a July 1 Congressional Research Service (CRS) report, this funding gap prevented the collection of essential inflation data, forcing the Department of Labor (DOL) to announce it cannot increase civil penalties for 2026 violations. This freeze comes immediately after a surge in fiscal year 2025 enforcement, where the DOL resolved 976 cases, penalized the illegal employment of over 5,200 minors, and assessed $37.2 million in fines.
The Big Picture
The maximum penalty per employee remains frozen at $16,035, and the maximum for violations causing death or serious injury stays at $72,876, despite inflation eroding their deterrent value since the last adjustment. The FLSA prohibits "oppressive child labor," defined as employment of youth under 16 in any occupation or youth under 18 in hazardous work. The law operates through two mechanisms: a direct ban on such employment and a prohibition on interstate shipment of goods produced where oppressive child labor occurred within 30 days prior.
The law creates a stark disparity between agricultural and non-agricultural rules. Children as young as 14 can work in non-hazardous farm jobs outside school hours, and children of any age may work on small family farms with parental consent. Non-agricultural work carries stricter age floors, with 18 as the minimum for hazardous occupations and 16 for most others.
Recent court decisions have shaped enforcement. A 2024 Alabama case involving fraudulent documentation settled for $385,000, creating a narrow exception to near-strict employer liability. A 2025 Pennsylvania case found that a religious rehabilitation program employing minors in commercial activities violated the law under an economic realities test.
The Trump administration's Project 2025 includes a proposal that would allow states to opt out of certain FLSA provisions, potentially eroding the federal floor that currently prevents states from weakening protections. The penalty freeze undercuts enforcement capacity precisely when that floor faces pressure. The Protecting Children Act (H.R. 3997), pending in Congress, would raise maximum civil penalties from $11,000 to $150,000 per violation and from $50,000 to $700,000 for death or serious injury.
The Bottom Line
The penalty freeze leaves federal child labor enforcement operating with 2024 penalty levels as inflation continues. Whether Congress acts to raise penalties, whether states pursue opt-out authority under the Trump administration's proposal, or whether the appropriations lapse is resolved will determine whether enforcement capacity expands or contracts in the coming year.
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