Yesterday, the White House released the President’s budget request for FY2015. The U.S. Department of Labor’s budget request includes more than $11.8 billion in funding increases across all of its programs. The Wage & Hour Division would get $41 million of that increase.
This massive (18%) increase to WHD’s budget seeks to allow it to add more than 300 new investigative positions and improve the technology used to target employers. It would be used to continue WHD’s focus on independent contractor investigations and to increase enforcement under the Family and Medical Leave Act.
The increase would also allow WHD to continue its targeted investigations in fissured industries, something which is a particular focus for President Obama’s nominee for the top position at WHD, David Weil. As we’ve discussed before on the blog, fissured industries include those industries that use subcontracting, employee leasing, and/or franchise relationships, including restaurants, hotels, staffing companies, cleaning services, and construction, among several others.
Although the budget purportedly reflects the priorities for FY2015, which would begin in October, the DOL budget also focuses on the Administration’s current efforts to raise the minimum wage — through the President’s recent executive order raising the minimum permissible wage to $10.10 for certain employees of federal contractors, as well as through the possibility of Congressional action. Not surprisingly in this election year, the Administration appears to intend to put on a full-court press to raise the minimum wage.
The budget makes an interesting reference to WHD’s FLSA enforcement efforts with respect to “low-salaried non-exempt managers.” Ostensibly, these efforts will take place through directed (i.e., targeted enforcement activities), most likely in the same fissured industries described above. The reference to low-salaried managers raises another interesting issue: given that the President’s Executive Order and legislative efforts would raise the minimum weekly pay for a 40-hour non-exempt employee to $404.00 per week, and the minimum salary for the FLSA’s Part 541 (i.e., white collar) exemption is $455 per week, will WHD amend the FLSA regulations to raise the minimum salary level?
Nothing has yet been identified in the Department’s regulatory agenda, but as is the case with how much of the budget request actually will be enacted by Congress, only time will tell.