Can an employer get in trouble not sending out W-2's on time?

Yes, an employer can face penalties for not sending out W-2 forms on time. The IRS requires that W-2 forms be distributed to employees by January 31 of the following year. Failure to comply can result in fines, which increase with the length of the delay in providing the forms. Employers must ensure timely distribution to avoid these penalties and to help employees accurately file their tax returns.