As those who follow DOL initiatives on their own or through this blog know, this year we’ve been introduced to new dramatically new initiatives revealing a new tone and approach the DOL is taking to enforce the FLSA and other laws within its jurisdiction. November is no exception. On November 23rd, the DOL announced an alliance it has formed with the ABA’s lawyer referral service so that it can get workers to knowledgeable counsel quickly, and it will cooperate with those private counsel in obtaining their litigation objectives. Before discussing this latest development in detail, let’s review the trend of this overall new enforcement trajectory.
First, as a part of the most recent Stimulus Package, the DOL’s Wage and Hour Division added to its ranks 350 new investigators. Presumably, with more investigators, more employers will be audited and compliance concerns – some valid, and some not valid – will be uncovered.
Next, in March 2010, we were informed that instead of issuing Administrator Opinion Letters, the Wage and Hour Division will now only issue “Administrator Interpretations.” Opinion Letters, which have been utilized since the FLSA was enacted, advises the requester and the rest of the country whether a specific compensation plan or practice is consistent with the Act. These Opinions were based on specific factual scenarios so that the readers would learn, applying the same facts, whether or not they are complying with the law (at least in the opini0n of the DOL). With the new AdministratorInterpretations, specific factual scenarios are not provided. Rather, the interpretations are general broad-brush strokes explaining general enforcement perspectives of the Wage and Hour Division. As a result, the Interpretations will not be helpful to those with nuanced questions, nor will they likely serve as absolute defenses to liability to those who wish to rely on the DOL’s opinions.
Later this past Spring, we were told of the Wage and Hour Division’s “We Can Help” campaign. Under this campaign, which entails a nationwide series of radio and television public service announcements, coupled with other media such as bill boards and posters, the DOL is specifically reaching out to employees and instructing them how to document their employer’s payroll practices and bring their information to the DOL for review. While advising employees of their rights is in no way objectionable, it is indicative of the Department’s enforcement tone that it will help employees catch their employers not complying with the law, while at the same time it will no longer help employers comply with the law by providing them with meaningful Opinion Letters.
Fourth, the DOL has announced as a part of its regulatory agenda an intent to implement new regulations requiring employers to create and deploy comprehensive compliance programs relating to how they comply with the various labor laws, including OSHA, the FMLA and the FLSA. This initiative is entitled the “Plan/Prevent/Protect” strategy. Under this initiative, employers will have to document how they train management to comply with the laws, and how management reaches certain compliance decisions (such as classifying workers as exempt or as independent contractors). An employer’s failure to adequately have and enforce an adequate compliance program will be in violation of the law.
Fifth, the DOL’s Solicitor has announced that the enforcement policy of the Department will be to punish non-complying employers to the fullest extent possible. The DOL will no longer endeavor to work out disputes, compromise claims, or just seek prospective compliance.
Now, the DOL has acknowledged that it may not have sufficient staff to adequately prosecute employers whose compensation practices may be somehow contrary to the law. Up until now, when this has occurred, the DOL has informed employees that, while their employer may have violated the FLSA or the FMLA, they are declining to prosecute the employer. Instead, the employees have been told that they have the right to pursue private causes of action against their employers. Just doing this, the DOL has concluded, is not enough. As it explained in its November 23rd announcement: “When it is difficult for workers to pursue redress for denied rights, it makes it easier for those employers who exploit their workers to obtain an unfair competitive advantage, which denies law-abiding employers a level playing field.”
To address this perception, the Wage and Hour Division has entered into a referral alliance with the American Bar Association’s Standing Committee on Lawyer Referral and Information Service. Under this system (which takes effect on December 13, 2010), when the Division declines to prosecute an FMLA or FLSA case due a lack of resources, it will provide the claimant with an “800 Number” to the ABA’s referral service, who will in turn refer the claimant to attorneys knowledgeable in the subject-matter at issue. Also, as a part of this process, the DOL will provide the employees with its calculation of back pay which may be due, and the employee’s attorneys will have access to much of the DOL’s investigatory file and other information for the prosecution of the case. See http://www.dol.gov/whd/resources/ABAReferralPolicy.htm
To be sure, this enhances the bar’s and public’s general desire to provide the public with a better access to justice. As explained by the DOL: “When it is difficult for workers to pursue redress for denied rights, it makes it easier for those employers who exploit their workers to obtain an unfair competitive advantage, which denies law-abiding employers a level playing field.” In other words, the DOL claims that with its new outsourcing plan, it will catch more law violators, which will in turn “level the playing field” for employers complying with the law.
While this may sound good, and while no one can object to these laws being fairly enforced, this level of partnering with the plaintiffs’ bar — in effect, being in the wings of its cases — potentially provides the plaintiffs’ bar with resources never seen before. One wonders if this is necessary given that the plaintiffs’ bar seems to be doing just fine without this assistance. Significantly, this assistance is not in and of itself objectionable, though it should open the eyes of employers (as it’s intended to do).
The issue this blogger has with this trend with this is more subtle. This latest development is just a reflection of an attitude the DOL is now taking. The DOL apparently believes that most employers do not care about complying with the law — which is not true. As a result, it believes that its resources should be devoted to catching employers who may not be in full compliance (though often, inadvertently), as opposed to helping employers comply with the law that is complex, nuanced and is still evolving under new case law. If the DOL were not abandoning the later and just focusing on the former, then perhaps these concerns would be mooted. Unfortunately, that is not the case and the new tone is now clear — EMPLOYERS BEWARE.