Jeffrey (Jeff) H. Ruzal, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was quoted in the Bloomberg Daily Labor Report, in “Wage Division Reports Banner Year for Fines, Record Low Actions,” by Rebecca Rainey. (Read the full version - subscription required.)
Following is an excerpt:
The US Labor Department’s wage enforcement arm assessed nearly $26 million in fines against employers in 2023, the highest on record in a decade.
The Wage and Hour Division, in charge of policing federal minimum wage, child labor, overtime, and other labor laws, concluded 20,215 compliance actions and recovered about $212.3 million in back wages in FY 2023, data from the agency show. That’s roughly on par with the 20,422 enforcement actions and roughly $213.1 million in back wages collected in FY 2022, but also marks the lowest enforcement year since at least 2013, according to the agency’s records.
Despite the lower number of cases, the agency still fined employers a 10-year-high of $25.8 million in civil monetary penalties for violations of federal labor laws in 2023. Businesses hit with those fines include a Subway restaurant operator in San Francisco and Wisconsin-based Packers Sanitation Services Inc., both of which were accused of illegal child labor, among other claims.
The past year’s enforcement numbers provide some insight into how budget constraints may be impacting the agency’s enforcement work. They also underscore calls made by Democrats and worker advocates that the DOL’s worker protection agencies need more resources to carry out the agency’s mission—especially as the department takes on new initiatives like its child labor exploitation taskforce. …
Beyond the Numbers
Labor observers warn that the topline numbers don’t provide the full picture or strength of the agency’s enforcement work, however, especially because they only reflect cases closed by the agency and don’t include pending investigations.
“There are definitely limitations from a personnel perspective and a caseload perspective as to how many enforcement actions can be pursued at any given time,” said Jeffrey Ruzal, a former trial attorney in the DOL’s solicitor’s office. He noted there are numerous factors that can influence differences in the year-end figures, like the nature of the violation, the length of the investigation, or whether the employer cooperates with investigators.
“The number of cases, in my opinion, does not in any way reflect any sort of paucity in the robustness of its enforcement agenda,” said Ruzal, who is now an attorney at Epstein Becker & Green P.C.
The amount of back wages collected by the department also comes with caveats when using it to assess the agency’s enforcement work. The wage division typically targets low wage industries, which could depress the amount of back wages the agency is able to recover each year. …
Overall, Ruzal said that although the topline numbers from the wage division may look lower this year, that hasn’t been reflected in the agency’s enforcement presence.
“In my practice, I have not seen any noticeable decrease or reduction in the number of investigations or audits that are brought against companies in which I’m involved. So, you know, on a micro level, I’m not seeing any particular difference,” he said.
Repeat Offender Crackdown?
The wage divison’s record year for civil monetary penalties could be a sign that the agency is going after employers for “repeat” violations, which can draw higher fines, or that it’s targeting enforcement on violations that don’t necessarily draw back-wage awards, like those that are part of its child labor enforcement initiative.
The record penalties reported by the division “could very well reflect a greater number of investigations of recidivist employers” Ruzal said, and would also explain why the agency reported fewer back wages this year.