Last week, Secretary of Labor Thomas Perez testified during a hearing held by the House Education and Workforce Committee to discuss President Obama’s budget proposal for the Department of Labor. Secretary Perez’s testimony touched a wide range of topics, most notably the oft-delayed FLSA regulations rewrite we have discussed in recent months. The DOL Secretary also echoed President Obama’s call for an increase in the federal minimum wage, despite the action of 17 states to enact increases in the past few years.
Secretary Perez testified as to the DOL’s ongoing efforts “to modernize the nation’s rules on overtime pay, which have not kept up with inflation or with changes in the economy.” The regulatory rewrite, which President Obama directed the Secretary to undertake last spring is not imminent. However, Secretary Perez quipped that DOL staff members were “working overtime” to prepare the new rules and that they would be released “sometime this spring.” He did not provide further details about timing, but again highlighted the salary threshold as a point of emphasis. “The basic premise of the overtime law that Congress enacted more than 75 years ago is pretty straightforward: If you work more, you should get paid more. But that basic principle is undermined in too many cases,” Perez said. He also highlighted the plight of “[t]he assistant manager at a fast food restaurant who puts in 60 to 70 hours a week for $455 and spends almost all of their time performing the same work as the employees they supervise and who does not get overtime is getting a raw deal. We are updating the rule to prevent this situation.”
Secretary Perez also commented on the Wage and Hour Division’s (WHD) increased compliance efforts. He observed that DOL had increased enforcement staff at the WHD, but that these efforts had only brought enforcement staffing back to 1970s levels, hence the administration’s request for additional appropriations in 2016 for WHD. He explained that the WHD had “shifted the focus of [its] enforcement efforts” to “targeted investigations in industries where we know workers are vulnerable,” based on industry analysis, data, and trends, rather than taking a “purely reactive” approach dependent on workers first lodging complaints.
In particular, WHD plans to focus on sectors where “wage violations are pervasive, especially for low-wage workers,” and will look to target not just violators themselves but also employers at the “top of the [supply] chain to evaluate the compliance practices of those below them; and to get them to think twice about whether it is worth the risk to their good name, and possibly their bottom line, to do business with a supplier or subcontractor who skirts the law.”
Secretary Perez’s testimony shows that employers should not breathe easy just because the FLSA regulations have been delayed again. The DOL and the WHD in particular clearly plan to continue their aggressive outreach and enforcement this year and into the 2016 fiscal year.