Leveling the Playing Field
By Enforcing the Rules of the Game
Our nation’s worker protection laws are only as good as the will to enforce them.
This administration set forth a bold vision for resetting the terms of the basic bargain of America — that if you work hard and play by the rules, you can make it. We’re proud to have played a major role in leveling the playing field.
Protecting What You Earn
With limited opportunities available in his hometown of Brownsville, Texas, 20-year-old Miguel Garcia left his wife and 3-day-old baby to work in a Napa Valley vineyard for the summer − hoping to return with enough money to build a better future.
What awaited him was a nightmare. Seventy hours a week in 100-plus-degree temperatures out in the fields without sufficient water. Skimpy meals, sometimes just scraps from supervisors’ meals. Rat-infested housing with no plumbing, windows or beds. Worst of all: The employer, a contractor, sometimes withheld paychecks, claiming housing and meals were enough.
When Miguel returned home to Texas, he contacted the Labor Department’s Wage and Hour Division. We alerted the vineyard owner, who pledged to take action, and a local nonprofit helped the workers find safe housing. We recovered $19,000 in back pay for 31 workers and plan to assess a civil penalty against the employer.
Miguel received $1,400 and the proof of employment he needed to enroll in a welding training program. And thanks to the back pay, his wife was able to enroll in nursing school.
Since 2009, the Wage and Hour Division has secured nearly $1.6 billion in back wages for more than 1.7 million workers like Miguel across the country. During that time, we’ve focused on industries where workers are most likely to be mistakenly or deliberately cheated out of their wages.
In fiscal year 2015 alone, we helped more than 240,000 workers recoup nearly $247 million they had rightfully earned. An average of more than $1,000 per worker is real money that helps them put food on the table, pay rent and care for their children.
Under President Obama, the Labor Department has taken a new approach to enforcing the laws that protect workers and create a level playing field for businesses.
We allocate our limited resources in smarter and more creative ways, deploying our inspectors and lawyers where they can make the most impact; three-quarters of wage and hour investigations are conducted in priority industries.
Here are just two examples:
- Temporary production line workers jointly employed by J&J Snack Foods and multiple staffing agencies were paid more than $2.1 million in back wages and damages after being systematically denied minimum wage and overtime pay. Our investigators determined that J&J Snack Foods, a nationwide snack food distributor, was a joint employer and as a result had joint liability for compensation to 677 workers in New Jersey and Pennsylvania.
- The department found that Staples Contract and Commercial Inc., a subsidiary of Staples Inc., incorrectly terminated a worker’s employment for taking time off to care for his critically ill wife, and secured $275,000 in lost wages, benefits and damages. As part of the settlement, the company is providing Family and Medical Leave Act training nationwide and updating its personnel policies.
Taking on Misclassification
Misclassified employees (that is, workers who are employees under the law but are incorrectly classified as independent contractors) are often denied access to critical benefits and protections to which they are entitled, such as the minimum wage, overtime compensation, job-protected family and medical leave, unemployment insurance, worker’s compensation and safe workplaces.
At the same time, when businesses skirt the law, they also evade their responsibility to pay into state unemployment insurance and workers’ compensation programs, as well as Social Security and other taxes. Make no mistake about it: misclassification hurts working people, businesses that play by the rules, and American taxpayers. It presents a serious problem for our entire economy.
Since 2009, we have been engaged in an initiative to combat misclassification. Our Wage and Hour Division and Employment and Training Administration are working with the Internal Revenue Service to combat employee misclassification and to ensure that workers get the wages, benefits and protections to which they are entitled.
Under this administration, the department has also entered into unprecedented partnerships with 29 states to work together on this issue in a variety of ways — including information sharing and coordinated enforcement — to ensure that we are all using our resources most strategically, effectively and efficiently to address this significant problem.
These collaborations are making a difference. In fiscal year 2015, WHD investigations of low-wage industries, where misclassification is prevalent, resulted in more than $74 million in back wages for more than 102,000 workers.
Securing Your Benefits and Savings
In the fall of 2008, when the stock market crashed, Americans lost trillions in their investments, including their hard earned retirement savings.
In the midst of this economic distress, a major investment firm Bernard L. Madoff Investment Securities — turned out to be nothing but a giant Ponzi scheme that lost billions of dollars for its clients, which included plumbers, electricians, carpenters, bricklayers, iron workers, laborers, doctors, charitable foundations and institutions of higher education.
Ultimately, the department’s Employee Benefits Security Administration achieved settlements to recover more than $260 million for victims of Bernie Madoff.
EBSA also worked closely with the FBI, the U.S. Attorney’s Office for the Southern District of New York and other law enforcement agencies in obtaining criminal convictions for Madoff and others involved in the scheme.
A secure retirement is one of the pillars of middle class life in America. At the Department of Labor, we take very seriously our responsibility to protect the hard earned retirement savings of so many workers. Since 2009, EBSA has recovered more than $1.7 billion affecting 696,403 plans and more than 188.7 million plan participants, when only including monetary results from investigations that directly impacted plans, participants and beneficiaries.
Additionally, under its Voluntary Fiduciary Correction Program, EBSA resolved 12,018 violations that employers, plan officials and service providers self-reported. The program, which aims to protect workers’ benefits by correcting self-identified violations of ERISA, resulted in the voluntary restoration of more than $215 million to employee benefit plans.
This means more money going back into the pockets of workers and their families saving for retirement.
Higher Standards for Employers That Receive Taxpayer Dollars
Janice Stevenson, an employee of a federal contractor, was reassigned to a work station that required her to lift heavy objects — even though she has a disability that prevents her from performing such tasks.
She asked her supervisor for reasonable accommodations, but was denied. Our Office of Federal Contract Compliance Programs worked with her employer to restructure the way she worked, including a tool that eliminated the need for her to do any heavy lifting.
Companies that contract with the federal government in return for taxpayer dollars are expected to meet the reasonable standards of non-discrimination and inclusion that reflect our national values.
From January 2009 to December 2015, OFCCP found discrimination in 553 cases and recovered $71.1 million in back pay for 133,000 workers and job seekers, and negotiated more than 11,900 job opportunities.
Some notable successes include:
- The 2015 Fastenal settlement remedied hiring discrimination with $1.25 million in back pay and 171 job opportunities, and discontinued the use of discriminatory tests that screened out over 8,000 qualified females and African-Americans at Indianapolis and Atlanta distribution facilities.
- A 2012 settlement with FedEx resolved sex, race, and national origin discrimination in hiring at 23 locations in 15 states. The settlement included $3 million in back wages and 1,700 job opportunities for over 21,000 applicants, along with wide-ranging reform of the hiring process. The 21,635 rejected job seekers represent one of the largest classes of victims of any case in OFCCP’s history.
- A 2011 settlement agreement with Embassy Suites resolved a claim that the hotel failed to reinstate an employee to her original pay and seniority after maternity leave. As part of the settlement, the company agreed to implement a new leave policy for all of its 75 establishments across 24 states.
Workers and employers with questions about labor laws can call our Wage and Hour Division at 1–866–4-US-WAGE (1–866–487–9243). Federal contractors and their employees can contact OFCCP at 1–800–397–6251. For questions about retirement and health benefits, call EBSA at 1–866–444–3272.
This post is part of our “Working for You” series, highlighting how the Department of Labor, and the efforts of the Obama administration, are helping hardworking Americans succeed. View them all at www.medium.com/workingforyou.
