This is the Department of Labor blog post, authored by Dr. David Weil, administrator of the Department's Wage and Hour Division.  In his blog he states that  we need to create ripple effects that impact compliance far beyond the workplaces where we physically conduct investigations.  He also affirms that  creating ripple effects through strategic enforcement will help the Department of Labor reach their fundamental goal of making sure workers in the U.S. receive a fair day’s pay for a fair day’s work. Achieving that goal also requires education and outreach. 

Editor’s note: This is the second in a series of several blog posts about a Wage and Hour Division for the 21st Century Workplace.

The goal of the Wage and Hour Division is to protect the earnings and welfare of workers, and ensure a fair and level playing field for employers. We have a lot of ground to cover to accomplish that mission. More than 7.3 million establishments and 135 million workers are covered by the laws we enforce. Yet, we have limited resources. To carry out our job, we must be prudent and strategic in our enforcement actions.

Over the last several years, we’ve been targeting investigations where evidence shows labor law violations are greatest—that is, in industries where workers are most likely to be mistakenly or deliberately cheated out of their wages, and where they are least likely to speak up and report such violations. And now, we are taking strategic enforcement to the next level.

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. We need to continue to find 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.

Creating ripple effects requires doing several things:

• We’re increasing the cost of non-compliance by using all enforcement tools provided by Congress where appropriate, including civil money penalties, liquidated damages, and debarments.
• 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.
• When we conclude significant cases, we publicize the results through traditional and digital media. Publicizing wage and hour violations is an effective way to educate other employers about their responsibilities and encourage compliance.

Here’s a recent case example. A drywall contractor in Arizona was found liable for $600,000 in back wages and penalties after its labor provider misclassified the workers it supplied as independent contractors rather than employees. The contractor also was required to ensure that any subcontractors it hires in the future are properly licensed and insured, and that they comply with federal labor laws. Additionally, the contractor must educate its peers about the importance of compliance, including making presentations to home builders. The ripple effect created by this one investigation will spread across the entire Arizona residential construction industry. It will be good for workers, and good for those businesses that play by the rules.

The success of our enforcement efforts won’t be statistics showing the amount of back wages we have collected for workers. It will be improving compliance levels, so that when we enter workplaces in the future, we find fewer and fewer violations. Creating ripple effects through strategic enforcement will help us reach our fundamental goal of making sure workers in the U.S. receive a fair day’s pay for a fair day’s work. Achieving that goal also requires education and outreach – which I will address in my next blog post.

Dr. David Weil is administrator of the department’s Wage and Hour Division.