Enforcing Change

Five Strategies for the Obama Administration to Enforce Workers’ Rights at the Department of Labor

Report from David Madland and Karla Walter outlines five strategies for the Obama administration to enforce workers’ rights at the Department of Labor.

Tallassee Mills employee Kathy   Redden rethreads a warper machine on the floor of the cloth factory in Tallassee, Alabama. (AP/Rob Carr)
Tallassee Mills employee Kathy Redden rethreads a warper machine on the floor of the cloth factory in Tallassee, Alabama. (AP/Rob Carr)

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From air pollution to food safety to children’s toys, one of the hallmarks of President George W. Bush’s administration has been its failure to enforce laws designed to protect ordinary Americans. This failure is perhaps nowhere more evident than at the Department of Labor, where the Obama administration will have an opportunity and an obligation to correct the Bush administration’s inadequate enforcement of important workplace protections.

Lax enforcement by DOL harms workers, taxpayers, and law-abiding businesses. Every year, workers lose $19 billion in wages and benefits through illegal practices, nearly 6,000 American workers die on the job, and at least 50,000 workers die due to occupational dis- ease. Taxpayers are cheated out of $2.7 billion to $4.3 billion each year in Social Security, unemployment, and income taxes from just one type of workplace fraud that misclassifies employees as independent contractors. Employers who play by the rules have trouble competing with irresponsible firms that keep labor costs illegally low. As one business owner frustrated with weak enforcement of labor laws wrote recently, “It is very difficult to compete when someone is not paying his/her dues and not playing by the rules.”

Workers in traditionally low-wage and potentially dangerous industries are harmed most by the Bush DOL’s weak enforcement. At least 50 percent of garment, nursing home, and poultry employers violate basic minimum-wage and overtime protections, and 50 percent of day laborers are paid less than the wages they are owed. Construction workers and truck drivers are especially likely to get killed on the job, with fatality rates over five times the national average. At least one in 10 meatpackers is injured on the job every year, but the Occupational Safety and Health Administration only inspects about 75 of the more than 5,000 meatpacking plants annually.

This report provides a detailed guide for how the Obama administration can protect workers and their paychecks by enforcing existing wage-theft and worker-safety laws that are already on the books. Wage-theft laws prevent employers from paying less than minimum wage, failing to pay overtime, forcing employees to work off the clock, stealing workers’ tips, and violating prevailing wage laws on work contracted by the federal government. Worker-safety laws regulate occupational health and safety standards in American workplaces.

This report differs from other examinations of Bush’s lax labor law enforcement to date in two key ways. First, the recommendations are geared toward initiatives that DOL officials can adopt immediately under existing authority. We do recommend legislative changes, but this report is focused on helping the Obama administration hit the ground running and quickly improve the lives of working Americans.

Second, we take a broad view of the enforcement problem, systematically analyzing the effect of weak enforcement across DOL, rather than focusing on just one problem or agency. This perspective allows us to recommend policy changes that apply to multiple programs, encourage cross-divisional cooperation, improve the balance between enforce- ment programs and other activities, and highlight areas where the agency’s culture as a whole must shift to better enforce worker protections.

We recommend five major strategies for a new Department of Labor:

Opportunity 1: Use penalties to create a culture of accountability. Under Bush’s watch, DOL has not used penalties to its full authority to go after scofflaw employers—even though an agency-commissioned study found that when employers are penalized, they and other employers are more likely to comply with wage-theft laws. Moreover, the civil and criminal penalties are simply too low to deter or even adequately punish lawbreak- ers. The Obama administration must use penalties forcefully, especially in cases of willful, repeated, or high-hazard violations. It should also work with Congress to increase maxi- mum allowable fines, and it must promote a depoliticized agenda where DOL is again seen as the top labor cop. These changes will send a message to lawbreakers that there is a new culture of accountability at DOL.

Opportunity 2: Increase enforcement staff and use partnerships to assist underfunded enforcement divisions. DOL worker-protection programs have insufficient personnel to meet enforcement needs. The Bush administration has worsened this long-standing prob- lem through its budget cuts and by rejecting community partnerships that can multiply DOL’s enforcement capacity. Increased funding from Congress is necessary for adequate enforcement, though the Obama administration can immediately increase agency capabil- ities by strengthening relationships with community organizations, industry associations, state worker-protection agencies, and labor unions. These groups can inform the agency’s enforcement agenda and assist with industry monitoring.

Opportunity 3: Target high-violation sectors with strategic initiatives. Bush’s DOL has relied on investigation methods that do not catch enough lawbreaking employers. DOL allowed department resources to be used inefficiently and many offenders to go unpun- ished by focusing on reactive, complaint-driven wage-theft investigations, poorly targeted worker-safety inspections, and voluntary compliance assistance. The Obama administra- tion should reduce safety violations and wage theft by targeting high-violation industries and locations through strategic initiatives backed by sound data.

Opportunity 4: Use thorough record keeping to drive enforcement priorities, enhance public accountability, and improve performance evaluation. Good data is key to enforcement, but the Bush administration squandered opportunities to improve data collection on worker protection. Important workplace data often goes unrecorded and underutilized, and limited online availability weakens public accountability. Moreover, the administration has intentionally weakened critical reporting requirements for businesses. The Obama administration should ensure that DOL collects quality data and then uses that information to accurately target strategic enforcement initiatives, improve public accountability, evaluate past performance, and plan for future operations.

Opportunity 5: Strengthen immigrant protections to improve job quality for all work- ers. Immigrant workers—both legal and undocumented—frequently face abuse from lawbreaking employers, which drives down job standards for all workers in industries with high concentrations of immigrant workers. The Obama administration must ensure that laws are enforced for all workers and decrease reporting barriers for immigrants by renew- ing the agency’s commitment to treat all workers equally, increasing outreach to trusted community organizations, and improving bilingual services.

The Obama administration can take a major step forward in helping to protect workers, taxpayers, and responsible businesses by employing these five strategies to effectively enforce labor laws. The Obama administration can immediately implement these strate- gies, but doing so will not be easy. It will require strong leadership to change DOL’s culture and make enforcement a priority.

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David Madland

Senior Fellow; Senior Adviser, American Worker Project

Karla Walter

Senior Fellow, Inclusive Economy