Wage-Hour Enforcement Unchanged, Labor Department Official Says

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By Chris Opfer

The Labor Department’s recent decision to scrap a pair of Obama-era informal guidance documents hasn’t changed how the department enforces federal wage-and-hour laws, at least in one part of the country, DOL Regional Solicitor Janet Herold told Bloomberg BNA July 17.

“There is no change in our enforcement practice in my region because the law has not changed,” said Herold, whose region covers Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, and Washington. “The administrator interpretations were literally nothing new, they just reiterated existing law.”

The department in June announced that it had withdrawn a pair of administrator interpretations. Former Wage and Hour Division chief David Weil explained in one document that most workers should be classified as employees, rather than independent contractors, for minimum wage and overtime eligibility purposes. He said in the other that joint employer liability for affiliated businesses in wage cases should be read broadly.

The recent moves were largely seen as an indication that the DOL under Labor Secretary Alexander Acosta is ready to take a more business-friendly approach to enforcement of federal wage-and-hour and other laws. Management attorneys and advocacy groups criticized the administrator interpretations as heavy-handed attempts to update workplace laws without going through Congress.

“The department will continue to fully and fairly enforce all laws within its jurisdiction,” DOL spokeswoman Jennifer Hazelton said when the DOL announced it was withdrawing the interpretations. Hazelton and DOL spokeswoman Jillian Rogers didn’t immediately respond to Bloomberg BNA’s requests for comment July 17.Worker advocates have long decried what they say is the rampant misclassification of workers as independent contractors, a designation that means the workers aren’t entitled to minimum wage and overtime protections, workers’ compensation, or unemployment insurance. Supporters of expanded joint employer liability say the Obama administration’s approach helped to ensure that the employers that actually set the terms and conditions of the job are accountable to workers.

“What we do is enforce the law,” Herold said. “The law hasn’t changed. I don’t believe there’s any change across the country.”

Matters of Nuance

Business advocates hailed the decision to withdraw the documents, especially after the DOL said it would return to the practice of allowing employers and workers to request opinion letters on legal issues in a particular factual situation. Employers can then use those letters in court as a good-faith defense in federal minimum wage and overtime cases.

Pat Brady, who represents businesses as an attorney at Epstein Becker & Green, told Bloomberg BNA July 17 that the administrator interpretations marked a shift in emphasis for the Labor Department instead of a wholesale change in its approach to the classification and joint employer issues.

“The words never really changed,” Brady said of the joint employer and classification tests under the Fair Labor Standards Act. “What changed is the nuance and the emphasis.”

Specifically, Brady said the classification administrator interpretation focused more on whether independent contractors operate as a “stand-alone business” and less on the relationship between the contractor and the entity for which it performs work. He also said the joint employer document shifted focus to potential indirect control by one business of another business’s workers, similar to the expanded test recently adopted by the National Labor Relations Board in its Browning-Ferris Industries of California Inc. decision.

Brady said the administrator interpretations didn’t have the force of law.

“A lot of these cases are decided by the courts, not the Department of Labor,” he said.

To contact the reporter on this story: Chris Opfer in New York at copfer@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

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