By Abigail Rubenstein
Law360, New York (March 04, 2014, 8:05 PM ET) -- The budget that President Barack Obama submitted to Congress on Tuesday seeks a noteworthy sum to boost the U.S. Department of Labor's Wage and Hour Division's enforcement capabilities, which attorneys say signals that cracking down on workplace pay issues remains a top priority for the administration.
The president's proposed budget for the 2015 fiscal year would give the DOL $11.8 billion in discretionary funding, along with new, dedicated mandatory funds. While the budget would leave the allocation of funds to most of the department's agencies relatively close to the level they were at in 2014, it includes an increase of more than $41 million for the WHD to ensure workers receive appropriate wages and overtime pay, as well the right to take job-protected leave for family and medical purposes.
“This is sort of playing into the bigger thematic of this war, if you will, on inequality and help for the middle class which permeates some of the other White House initiatives,” Ilyse Schuman of Littler Mendelson PC told Law360. “From the employer perspective, this budget request is a reflection of where the administration wants to use its resources, and it clearly wants to use its resources on enforcement, especially on the enforcement of wage-and-hour laws.”
It's not unusual for the government to seek additional funding for the WHD each year, but it is rare for the request to be for such a big jump, lawyers say.
“I think it is kind of extraordinary that in a time of record budget deficits and high unemployment and a struggling economy, the administration wants to increase the budget for the Wage and Hour Division by more than 18 percent,” said Paul DeCamp, the national chair of Jackson Lewis LLP's wage and hour practice group and a former WHD administrator. “It is an extraordinary request and one unlikely to make it through the appropriation process.”
But whether or not the administration actually gets what it is asking for - which is unlikely given Republicans' control of Congress - employers should not ignore the message that the request sends.
“Whether they get the 300 employees or not or get the $41 million or not is less interesting and less important than where they are going to put their priorities, and that is clearly on targeted industries and on misclassification,” Lawrence Lorber of Seyfarth Shaw LLP said.
Even if the administration does manage to secure the funds, the immediate impact remains unclear, since attorneys say it would be difficult for the WHD to actually find, hire and train 300 new staffers in one year. Nonetheless, that the administration has such ambitious plans for the agency shows just how important the administration believes it to be, which means employers should be aware of their vulnerabilities and take steps to protect themselves, lawyers say.
“Employers need to know that the Wage and Hour Division is going to be looking at them, so they really need to do as much proactively as possible to make sure that if the DOL Wage and Hour Division does come knocking, they're in good shape,” Schuman said.
“There are going to be certain industries that the division is going to continue to target, probably the so-called fissured industries ... so employers in those industries really need to make sure they get things right,” she said.
The “fissured industries” include hotels, restaurants, construction, janitorial services and others, and they are known to be a particular priority not only for the current agency but also for Obama's nominee to head the WHD, David Weil, who was approved by a Senate committee in January but has yet to have his nomination put to a full Senate vote.
Although the significant budget increase for the WHD is certainly the most remarkable demonstration of the administration's commitment to the enforcement of workplace laws, attorneys noted that it was not the only place in the proposed DOL budget that would give additional funds for enforcement. The budget also would provide the Occupational Safety and Health Administration with an extra $4 million to enforce whistleblower laws, and would earmark $1.1 million of the Office of Federal Contract Compliance Programs' budget to strengthen efforts to eliminate pay discrimination affecting women.
Meanwhile, on the legislative side, the proposal calls on Congress to raise the minimum wage to $10.10 an hour and to pass comprehensive immigration reform legislation - two legal proposals that experts say could have significant consequences for employers across the country.