Locking Down Wage Enforcement a Top White House Budget Priority

Doubling-down on wage enforcement is among the Labor Department’s top priorities in the final year of the Obama administration, based on the department’s requests as revealed in the 2017 federal budget, issued Feb. 9 by the White House.

Strategic wage enforcement has been the department’s focus, as shown by recent guidance it issued that sought to bring clarity to worker misclassification and joint-employment relationships, as well as to parse how a lodging credit may be applied in light of the department’s home-care final rule.

So, finding the priority front and center in the budget lacks the dramatic buildup and promise that is accompanying the expected release of the department’s overtime rule, slated in a fall regulatory agenda to be issued in July but possibly released as early as  spring.

Nonetheless, if the department’s requests are granted, employers should ensure their wage and hour compliance i’s are dotted and t’s are crossed because several of the department’s budget proposals were devoted to enhancing wage enforcement, as well as other wage and hour topics pertinent to payroll, and given the department’s recently issued guidance, failure to properly classify a worker may be harder to justify.

Expanding Enforcement

The fiscal year 2017 president’s budget asks Congress for $12.8 billion in discretionary spending for the Labor Department, which is about 5 percent more than Congress enacted in fiscal 2016, according to the White House budget proposal.

The Labor Department’s budget asks that $277 million, an increase from $228 million, be appropriated for the Wage and Hour Division to hire more than 300 employees to support enforcement of wage and hour laws and to  prevent the illegal misclassification of some employees as independent contractors, as well as to fund  a new, integrated case management system, to hire employees to support back wage collection and payment systems and to build the department’s strategic enforcement data analytic capabilities

The budget’s “proposed investments in investigative staff, case management, back wage collection and payments and data analytics would allow WHD to reach more workplaces to achieve compliance with the laws WHD enforces on an industry-wide basis while leveling the playing field for employers who are in compliance,”  a department document about the funding request said.

Prioritizing Fair Pay, Paid Leave

In addition to focusing enforcement efforts, particularly for industries characterized by subcontracting and temporary labor providers, the department aims to pursue strategies that allow for a more in-depth review of employer business and leave practices with regard to the Family and Medical Leave Act.  

In fiscal 2017, the department is committed to implementing its home-care final rule, which extended minimum wage and overtime protections to certain home-care workers, and its minimum-wage for contractors final rule, which raised the minimum wage that certain contractors must pay their workers to $10.10, and will focus on “carrying through and implementing additional regulatory initiatives,” including the white-collar overtime rule that it proposed in July 2015.

In 2016, the Labor Department plans to issue a proposed rule to let employees of federal contractors to earn seven days of paid sick leave per year to care for themselves, family members or loved ones.

The federal budget includes more than $2 billion for a paid-leave initiative to help up to five states launch paid leave programs, providing eligible states with funding for the initial set up and three years of benefits. Funding also will help states and localities analyze and develop paid family and medical leave programs.

 

Take a free trial to Bloomberg BNA’s  Payroll Decision Support Network , your one-stop resource for reliable, up-to-date guidance and analysis in every area of payroll administration and compliance.