Employers Want More Cooperation, Less Enforcement From New Labor Secretary

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By Gayle Cinquegrani  


Business advocates interviewed by BNA said they hope Thomas Perez, who was sworn in as Labor Department secretary July 23, will lead a department that is less inclined to issue “burdensome” regulations and works more cooperatively with employers.

Perez, an assistant attorney general and former Maryland labor secretary, was confirmed by the Senate July 18 in a strict party-line vote of 54-46 (31 HRR 761, 7/22/13). President Obama nominated Perez March 18 (31 HRR 287, 3/25/13), but Republicans delayed his confirmation while questioning his record as head of the Justice Department's Civil Rights Division.

More Compliance Assistance

Attorneys who represent employers expressed some concern that Perez will continue the emphasis on enforcement, rather than compliance assistance, that they said was characteristic of DOL during Obama's first term.


“If employers are trying to self-correct, the department should help them rather than penalize them,” Robert Boonin, chair of the Wage and Hour Defense Institute, said.




“This particular Department of Labor has been very focused on enforcement,” Jonathan Keselenko, chair-elect of the Wage and Hour Defense Institute and a partner at Foley Hoag in Boston, told BNA July 22. “I would like to see [DOL] assist employers with compliance,” he said.

“The current administration withdrew its opinion letter program,” which provided guidance to individual employers that asked about a specific fact situation, Keselenko said. “I would like to see them reinstate it.” He asserted that DOL during the Obama administration “added more inspectors and cut back on opinion letters.”

“I represent a lot of employers, and every client I have wants to do the right thing,” Keselenko said. “Unfortunately, it's not always clear” from the law what the right thing is, especially with regard to the Fair Labor Standards Act's “executive” exemption, he said.

Robert Boonin, chair of the Wage and Hour Defense Institute and a partner at Butzel Long in Ann Arbor, Mich., said DOL was “very aggressive” in enforcement under the previous labor secretary, Hilda Solis, who served from February 2009 to last January. Since Perez “is an accomplished enforcer” from his tenure at DOJ, Boonin said, it is likely that under Perez's leadership, DOL may not stress compliance assistance as much as enforcement.

“If employers are trying to self-correct, the department should help them rather than penalize them,” Boonin said. He criticized DOL for stopping opinion letters in 2010, when some parts of the law “are nuanced and complex.”

Recently DOL has been seeking liquidated damages from employers in many cases, Boonin observed. Such damages may be awarded if the employer did not act in good faith. “I think they would get more cooperation from employers if liquidated damages were off the table” when employers are trying to rectify their payroll errors, he said.

DOL seems to think most employers will not follow the law unless they fear being caught, he said. But Boonin said that in his experience, most employer errors are “inadvertent.” He added: “There's a lot of tension now. I hope that will change.”

From 'Goal' to 'Sledgehammer.'

James Sherk, a senior policy analyst at The Heritage Foundation, a conservative think tank, expressed several reservations about Perez. His record as an assistant attorney general showed that “he was willing to interpret the law … to be what he wanted it to be,” Sherk told BNA July 22.

Under Solis, DOL's Wage and Hour Division was planning an enforcement policy called “the shaming initiative” that would make examples of high-profile businesses, according to Sherk. The concept could go “from being a goal that they're working toward to being a sledgehammer that they use to target disfavored employers,” he said. “Enforcement shouldn't be about sending a message, it should be about finding violations,” he said.

Sherk also expressed concern that the final version of the persuader rule, which DOL has said it might issue by November (31 HRR 738, 7/15/13), will be too harsh on rules violations related to agreements between employers and labor relations consultants hired to thwart workers' attempts to gain union representation. “The prospect of criminal charges for a recordkeeping violation” seems inappropriate, he said.

In addition, Sherk encouraged Perez to “do randomized controlled trials” to evaluate the efficacy of federal job training programs. “We face a time of very tight budgets,” he said, so “it's very important to know” whether a program is effective.

Sherk suggested that online training may be more cost-effective for helping UI recipients upgrade their job-hunting and occupational skills. “Conservatives are willing to spend money to teach a man to fish if you're actually teaching him to fish,” he said.

Matt Lavoie, a spokesman for the National Association of Manufacturers, told BNA July 23 that manufacturers look forward to working with the new secretary. “We hope that his tenure will mark a step back from the overly burdensome rules and regulations that we've seen in the last few years and instead see commonsense policies that work for both employers and employees,” Lavoie said.

'A Strong Advocate for Workers.'

Organizations that advocate for workers' rights contacted by BNA said they are pleased with Perez's confirmation.

“We're very excited. Tom Perez has a background that gives us faith” that DOL will continue to protect workers, Sarah Crawford, director of workplace fairness at the National Partnership for Women and Families, said.

“The department will be gaining a strong leader” with Perez, Crawford told BNA July 22. She said the new labor secretary's priorities should be vigorous enforcement by the Office of Federal Contract Compliance Programs, family and medical leave, Women's Bureau programs, and extending the minimum wage to home care workers.

Michael Wasser, a senior policy analyst at American Rights at Work, also lauded the new secretary July 23. “We're excited to have someone who is a strong advocate for workers and workers' families,” he said. The Washington, D.C.-based advocacy organization supports workers' rights to form unions. Wasser said Perez, the son of Dominican immigrants, is aware that immigrants are particularly vulnerable to workplace mistreatment.

Perez's priorities should be extending minimum wage and overtime rights to home care workers and “making sure that labor protections of the Labor Department are continually updated to meet the changing nature of work,” Wasser said. In particular, the growth in part-time work and “complex subcontracting” can expose workers to exploitation, he said.

Prof. Joseph McCartin, director of Georgetown University's Kalmanovitz Initiative for Labor and the Working Poor, also mentioned immigrants when listing his priorities for the new labor secretary. “I hope that Tom Perez can use the department to advocate for and serve workers in the lower portion of our labor market who were hurt hardest by the Great Recession and its aftermath and that he can play a leadership role in efforts to fully integrate America's immigrants into our economy and society,” McCartin told BNA July 18.

Christine Owens, executive director of the National Employment Law Project, a nonpartisan organization that conducts research and advocates on issues affecting low-wage and unemployed workers, told BNA July 22 she is pleased that Perez has said he will emphasize job creation.

“There's a real crisis in terms of wages,” Owens added. “Enforcement [of wage and hour laws] has definitely been improving, and under Perez we would expect it to continue to improve,” she said.

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