The U.S. Department of Labor’s (DOL) Wage and Hour Division’s (WHD) recent enforcement efforts represent a flawed approach that assumes incorrectly that employers are deliberately violating the law, according to David Fortney, cofounder of Fortney & Scott, LLC, in Washington, D.C., who testified before a U. S. House of Representatives subcommittee November 3.
Fortney, editor of Federal Employment Law Insider, was among witnesses testifying before the House Subcommittee on Workforce Protections, which titled its hearing “Examining Regulatory and Enforcement Actions Under the Fair Labor Standards Act” (FLSA).
In addition to the “gotcha” approach Fortney sees the division taking, he said in written comments submitted to the panel that the d ivision’s Bridge to Justice program “effectively outsources to private attorneys one of the Wage and Hour Division’s most important functions — to investigate and respond to complaints of employees who have had the courage to come to DOL.”
Bridge to Justice, announced in December 2010, connects workers to an American Bar Association-approved attorney referral system when the Wage and Hour Division, because of limited capacity, declines to pursue a worker’s claim. Fortney said Bridge to Justice could be called the “Reward to Lawyers” program because he said it primarily benefits complainants’ attorneys.
Fortney also criticized the division’s decision to stop issuing opinion letters. “Previously, the Wage and Hour Division issued Opinion Letters by the Administrator that provided guidance on compliance matters, but the current administration has refused to issue Opinion Letters,” he said in his written comments.
Fortney told the panel that opinion letters are useful because determining whether workers are properly classified is complicated, and employers need individual answers. He said the IRS applies a 20-factor test for determining whether a worker is properly classified, but that doesn’t necessarily mean the worker is properly classified under the Fair Labor Standards Act. He said the DOL has even recognized that it’s possible a worker can be classified as an independent contractor under one law but as an employee under another.
Fortney also criticized the division’s proposed “right to know” regulations, which call for employers to prepare a written analysis of why a worker is excluded from coverage under the FLSA. Such requirements “hang like a 500-pound anvil” over employers, he told the subcommittee.
Fortney also criticized the division’s focus on the homebuilding industry. Targeting an industry isn’t unusual, he said, but it is unusual to take the top tier — the largest companies in the industry — when problems are more likely to be found outside that set.
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