The Obama administration has sent yet another clear message to employers: enforcement of workplace pay issues by the Wage & Hour Division will only increase, as the President’s most recent proposed budget for the 2015 fiscal year reveals a hefty boost to the Division’s enforcement resources.
The proposed Federal budget provides for an 18% increase of more than $41 million to the WHD budget – out of a whopping $11.8 billion in discretionary funding to the DOL overall - allowing the Division to hire 300 new investigators and implement risk-based strategies targeting industries and employers most inclined to commit violations. The sum is predominantly intended to help the WHD ensure employers pay employees appropriate wages and overtime and offer employees job-protected family and medical leave. Additionally, the budget also allocates $10 million in state grant funding and another $4 million to the WHD for investigations into employee misclassification.
We will continue to monitor the proposal’s, arguably unlikely, approval through the congressional appropriations progress, and will update you on any developments. In the meantime, employers are well-advised to review and identify any vulnerabilities and gaps in compliance in payroll and recordkeeping practices to avoid being subject to the increase of investigations by the Division. Employers in “fissured industries,” such as hotels, restaurants, construction and janitorial services, are particularly susceptible to WHD investigations and should contact counsel to take the necessary pro-active steps to protect themselves.