The United States Department of Labor, Wage and Hour Division, administers the Fair Labor Standards Act (“FLSA”). That authority includes the power to investigate employers, their customers and payroll practices.
The New Orleans District Office of the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) recently announced an initiative to investigate the payroll practices of companies in the oilfield, maritime, and maritime fabrication industries throughout Louisiana. The initiative will also investigate the practices of staffing companies that provide labor to these employers.
The WHD investigations will focus on the existence of joint employer relationships, “day rate” pay practices, and payments of “per diems,” through aggressive on-site visits. For example, investigators are expected to insist on touring employee work spaces to assess whether a joint employer relationship exists. Accordingly, the investigation of a subcontractor might lead to the investigation of a company using the subcontractor’s services.
The WHD’s initiative is scheduled to begin in February of 2016. The New Orleans District Office will partner with other WHD district offices to increase their staffing levels in order to carry out this initiative.
The WHD’s New Orleans District Office is undertaking an education and outreach effort in advance of this initiative. However, the district office is not offering any safe harbors to companies that engage in the education and outreach events. Thus, the best action for Louisiana companies in the oilfield, maritime, and maritime fabrication industries (including staffing companies that provide staffing on a temporary or permanent basis to companies in these industries) is to immediately review their payroll practices.