CLIENT ALERT: U.S. Department of Labor, Wage and Hour Division Sets Enforcement Record
Client AlertIn advance of Halloween, the U.S. Department of Labor announced the results of its Wage and Hour Division's (WHD) recovery efforts for Fiscal Year 2019, and it reads like a horror story.
The good news to lull you into a feeling of safety was that the 18,844 Complaints Registered was the fewest amount over the past 22 years or published records.
Even more reassuring was that that total number of Concluded Cases was the fewest since 2009/10.
NOW FOR THE SCARE...
the total amount of Wages Recovered was $322M! This amount overwhelmingly surpasses the $260M average of total wages recovered for the previous five (5) years. These wage recoveries do not include any data from civil litigation.
WHAT WERE THE VIOLATIONS?
As usual, the vast majority of enforcement actions were Unpaid Overtime - approximately 83%. This includes the typical errors in calculating overtime for employees as well as the Misclassification of Independent Contractors.
WHAT INDUSTRIES WERE HIT THE HARDEST?
The biggest increase in wage violations hit the Construction Industry, which saw a greater than 25% increase in back wages recovery from the previous year. A similar increase struck Health Care, which increased just under 25% from FY 2018. The Food Services and Hotels and Motels industries both saw significant decreases in violations from previous years.
WHAT DOES IT MEAN?
Frequent followers of these posts know we highlight that, each year, the annual budget of the Wage and Hour Division increases to allow more investigators and more enforcement action. Emboldened with a record recovery, we can expect more and more investigations for years to come. It means that Construction and Health Care employers need to take a close look at their wage and hour practices to ensure compliance.
For questions about your Wage and Hour practices, the recent changes to Overtime Exemption Thresholds, the Increase to Minimum Wage, or any other Labor + Employment questions, please contact any of our Team Members.
Labor + Employment Partner
BMD Cleveland | 200 Public Square | Suite 3270 | Cleveland, OH 44114