Labor Department Sharpening Focus on Misclassification


From Bloomberg BNA – “

In combating employee misclassification, the Labor Department is taking strategic misclassification enforcement to the next level by placing greater priority on measures that are tactical and swift, a department official said.

“To carry out our job, we must be prudent and strategic in our enforcement actions,” said David Weil, administrator of the Labor Department’s Wage and Hour Division.

“We need to create ripple effects that impact compliance far beyond the workplaces where we physically conduct investigations, or the organizations to which we provide outreach directly,” Weil said Oct. 31 in a blog post.

Additionally, the division needs to be persistent in discovering ways to “make our investigation of one employer resonate throughout that particular sector and influence the behaviors of employers across that entire industry, to promote compliance across networks of business organizations,” Weil said.

Plan of Action

To accomplish the goal, Weil said the department needs to:

  • increase the cost of noncompliance associated with misclassification, including debarments, civil penalties and damages;
  • identify all potential employers involved; and
  • publicize the results to educate other employers on responsibilities and encourage compliance.

“We’re identifying the contracting stream, or supply chains, so those at the top of the chain will evaluate the compliance practices of those below them and consider whether it’s worth their own good name and possibly their own bottom line to utilize the services of subcontractors or suppliers who skirt the law,” Weil said.

More than 7.3 million employers and 135 million workers are covered by the laws enforced by the department, Weil said. The success of enforcement initiatives, however, is best shown by improving compliance “so that when we enter workplaces in the future, we find fewer and fewer violations,” he said.

Although the Labor Department aims to be more deliberate in its enforcement efforts, it maintains focus on large industries that generally hire low-income workers, said Michael Kravitz, communications director for the department’s Wage and Hour Division.

The department seeks to make  its enforcement efforts resonate through entire industries.

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