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The Department of Labor is stationed and ready to battle companies who skirt labor laws whether intentionally or by accident. David Weil, administrator of the Wage and Hour division of the Department of Labor Blog explained how they plan on “taking strategic enforcement to the next level.” The strategy is simple, to “create ripple effects that impact compliance far beyond the workplaces where we (the DOL) physically conduct investigations.” The first step has been targeting industries that hold the highest likelihood of misclassifications, deliberate or otherwise and where such violations are least likely to be reported. The next steps in the process were designed to make the “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.” To do this the DOL equipped its vessel with some new weapons:

  1. An increase to the cost of non-compliance including “civil money penalties, liquidated damages, and debarments.”
  2. Identification of the entire contracting stream or supply chain 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.”
  3. Publication of the results of significant cases to educate and encourage compliance

An example given by Weil in his blog post tells the story of $600,000 owed by a drywall contractor in Arizona after they were found to have misclassified employees as independent contractors. In addition to the hefty fines, the company must make presentations to educate peers about the importance of compliance as well as ensuring that their own future subcontractors are licensed, insured and comply with labor laws. While past success of labor law enforcement has been measured by the amount of back wages recovered for workers, the new measure will have a lesser need for such investigation to occur in the first place.

Want to avoid being one of the DOL’s “Ripple Starting” companies? LCPtracker can help you stay in compliance, to learn more click HERE.

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