Recently, the US Department of Labor (“DOL”) issued its Strategic Plan (the “Plan”) for Fiscal Years 2011- 2016. The Plan includes five (5) strategic goals and various supporting outcomes that must be reached in order to achieve the overall goals. Strategic Goal No. 1, entitled “Prepare Workers for Good Jobs and Ensure Fair Compensation,” involves securing wages and overtime pay for vulnerable workers and misclassified employees.
According to the Plan, the DOL intends to concentrate its enforcement efforts on ensuring that “vulnerable workers,” such as young workers and those reluctant to file complaints for work-related violations, are protected. Accordingly, the DOL expects to step-up its investigations of high-risk industries such as agricultural, janitorial, construction, and hotel/motel that commonly employ many vulnerable workers. Additionally, noting that the DOL and Treasury are involved in a joint project to detect and deter the misclassification of employees as independent contractors, the DOL has stated that it intends to increase it enforcement activities in industries described as “rife with misclassification” such as construction, janitorial, home-health care, child care, transportation, warehousing, meat and poultry processing and other professional and personal services industries for independent contractor misclassification issues.
Having monitored and reported on DOL enforcement activities in previous Updates, we continue to urge our clients to take some preventative steps, such as: (1) reviewing all current pay and record retention practices with regard to exempt and non-exempt employee classifications and (2) reexamining the use of independent contractors. With wage and hour compliance and employee misclassification becoming Strategic Goal No. 1 for the DOL, all employers have been placed on notice regarding the DOL’s enforcement priorities for the next five years. Moreover, many plaintiffs’ lawyers are actually concentrating their legal practice on wage and hour and independent contractor claims. This practice concentration has led to an increase in the number of lawsuits against companies and their senior executive officers (in their individual capacity) for alleged improper practices. Should you have any questions about employee classifications, independent contractors and/or preventative measures, please contact your Masuda Funai relationship attorney.