Last week, Department of Labor Wage and Hour Division (WHD) Administrator Dr. David Weil, who we have profiled in the past, announced on the DOL’s blog that WHD recovered more than $240 million dollars from employers on behalf of workers during fiscal year 2014, which ended last September. This total was down about 4% from last year’s $249 million, but is still an enormous total given WHD’s limited investigative capabilities.
According to Dr. Weil, WHD has recovered a total of more than $1.3 billion since 2009. Last year’s average recovery of $890 was distributed to more than 270,000 workers. Notably, though, Dr. Weil reports that WHD initiated 43% of its investigations, up from just 35% five years ago. WHD credits its focus on data analysis and “emerging business models” as leading to this increase. WHD’s fissured industry initiative is clearly paying dividends for the agency. Most importantly, WHD investigators found violations in these agency-initiated investigations 78% of the time.
Coupled with the continued increase in FLSA lawsuits, the Wage and Hour Division’s eye-popping haul and the fact that an investigation leads to a violation nearly 80% of the time should remind employers that now is the time to audit wage and hour practices. As part of this analysis, we suggest that employers carefully examine some of the practices that we’ve highlighted here on the blog, including volunteers and interns, independent contractors, meal breaks, and wages for salaried employees. To me, an 80% violation rate does not signal that the overwhelming majority of employers are necessarily “stealing” from their employees. Instead, I see this more as a result of an outdated, complex regulatory system (FLSA) that makes compliance a struggle (at best), particularly without careful attention and good counsel.