The amount of back wages and overtime pay collected by the U.S. Department of Labor for violations of the Fair Labor Standards Act is down slightly — but don’t assume that means DOL is no longer on the warpath.
According to data provided to Smart HR Manager, DOL collected almost $130 million in back wages and overtime pay for almost 219,000 workers in fiscal year 2010. That’s down slightly from the averages for fiscal years 2005-2009, which were $141 million for about 254,000 workers.
On its face, the downturn comes as a surprise, given repeated statements by DOL over the last two years that it intends to boost enforcement of FLSA violations.
However, a DOL spokeswoman told Smart HR Manager that the “impact we have on an industry coming into compliance and therefore the daily lives of workers is not necessarily reflected in the amount of back wages we collect.”
For one thing, the 2010 data do not yet reflect the impact of the 300-plus investigators DOL’s Wage and Hour Division hired over the past couple of years, the DOL spokeswoman said. The agency explained that it takes about two years to train investigators to carry out comprehensive investigations on their own. In addition, time spent by senior investigators mentoring and supporting the new investigators is time they would otherwise have spent in the field performing investigations. The spokeswoman added that the new investigators are first trained to enforce the FLSA, with the second round of training covering the other statutes administered by WHD.
As more of the newly hired investigators are completing their training, DOL noted, WHD enforcement rates already are beginning to rise.
Another significant factor affecting the 2010 data is that WHD’s FLSA enforcement strategy has been changing to “focus on strategic directed investigations,” in contrast to “complaint-based investigations,” said DOL. Directed investigations “have a more significant and broader impact on compliance across industries” than complaint-based investigations, the agency noted, while the latter investigations “are resource intensive and do not always result in changed behavior/business practices.”
WHD uses directed investigations in “high-risk” industries — that is, industries with high numbers of minimum wage and overtime violations — and in industries that employ vulnerable workers, according to DOL’s fiscal 2010 Financial Report.
A third factor affecting WHD enforcement data is the top priority DOL has placed, under Secretary of Labor Hilda Solis, on penalizing the misclassification of employees as independent contractors. Although such misclassification is not itself a violation of the FLSA, employer practices that result in misclassification can lead to violations of the act. Explained DOL: “Because labor and employment rights and benefits generally only apply to employees, misclassification frequently results in employees being denied those rights and benefits.”
In other words, be sure you’re in compliance with the FLSA. DOL is still on the hunt for violations, even if its enforcement numbers are down.