In its budget request to Congress seeking a 22 percent increase in funds, the Department of Labor’s Wage & Hour division (WHD) stated that it wants to expand its enforcement activities in so-called “fissured industries”. These are industries that use a lot of independent contractors, “leased” employees and those that operate as franchises.
Examples include restaurants, hotels, construction firms and employee leasing companies. Presumably the “fissure” is the divide between permanent employees with benefits and job security, and those who don’t have that status.
Part of the budget increase would go to technology upgrades to allow the agency to detect potential trouble spots more efficiently. The rest would go towards adding 300 new inspectors. Congress is highly unlikely to give WHD much, if any, of what it wants.
WHD can proceed with some aspects of its plan without a big budget increase. That involves taking a more systemic approach to enforcement. Rather than focus on individual employee complaints of wage and hour rule violations, WHD says it will focus more deeply on the employer’s business practices and leave policies.
In its last fiscal year, WHD demonstrated that it has already shifted enforcement resources to address its new priority. Nearly half of its investigations were initiated by the Division itself, instead of in response to employee complaints. In the prior year, only 17 percent of investigations were proactive.
Meanwhile, the Equal Employment Opportunity Commission (EEOC) has released a summary of its activities in the last fiscal year. It reported that 43 percent of the approximately 89,000 complaints it received were claims that an employer had retaliated against the employee for various reasons.
For the last six years, retaliation complaints have been the most common category. The next three complaint categories, in order of prevalence, were discrimination based on race, gender and disability status.
The most common specific event leading to those charges was termination — a logical fact given the severity of the action. Harassment is the second most common event.
Although relatively rare, other bases for discrimination charges were employment testing, discriminatory advertising, unlawful waivers and early retirement incentives.
Although defending against an EEO charge is a time-consuming and sometimes expensive nuisance, charges rarely stick. How rarely? Last year, the number of cases in which the EEOC initially sided with the employee was only 3.1 percent of the total. That’s down from 3.6 percent the prior year, and way below the 10 percent mark reached in 2001.
Still, for those 3.1 percent, the average amount paid to those who filed the charges was about $108,000 — an outcome to be avoided. You can minimize the chances of being charged and ultimately losing an EEO case by ensuring that all managers are properly trained. This includes training not only to prevent them from behavior that could give rise to a complaint, but also training to look for such behavior in those who report to them.
Training is Key
For example, given the prevalence of retaliation claims, managers should be trained to keep their cool even when an employee accuses them falsely of discriminatory behavior. Reacting strongly to such a charge, while perhaps tempting, can lead to a legitimate EEO claim when otherwise none would exist.
Harassment charges are often difficult to defend, so supervisor training in this area is critical as well.
Finally, a 105 percent jump in accusations of discriminatory recruitment advertising (for example, ads that suggest that only people of a particular gender or age bracket should apply) suggests it might be wise to be sure that advertising language is cleared by someone sensitive to these issues before being posted.
Workplace safety, or the lack of it, can affect employees indiscriminately. So while you aren’t likely to face an EEO claim for unsafe working conditions, you’ll hear from the Occupational Safety and Health Administration (OSHA) if those conditions cause an injury or are reported. And depending upon your industry, you could just get a visit from an OSHA inspector even in the absence of a complaint or incident.
Many industries are exempt, however, based on their aggregate safety track record over a specified time period. Also, employers with 10 or fewer workers are exempt from routine inspection.
The formula for industry exemption is having a lower “DART” (days away, restricted or transfer) rate per 100 employees than the 1.7 overall private sector average. Industries that come under that rate are updated and listed by OSHA annually. Here is where you can find this year’s list of industries that made the exempt list.