Figures released by the DOL show that the pace of FLSA claims continues to rise. According to the DOL’s latest statistics, in fiscal year 2008, more than 197,000 employees received a total of $140.2 million in minimum wage and overtime back wages as a result of Fair Labor Standards Act (FLSA) violations. Wage and Hour Division (WHD) investigators examined FLSA compliance in over 24,500 of the 28,242 cases and found 19,000 FLSA violations and assessed $3.1 million in FLSA civil money penalties. The figures for fiscal year 2009 have yet to be released—probably because they are still counting!
In spite of these staggering numbers, a Government Accountability Office (“GAO”) report released in March 2009 criticized the WHD as slow and ineffective. In response, Labor Secretary Hilda L. Solis declared that she plans to increase WHD’s staff by a third in order “to refocus the agency on [its] enforcement responsibilities.”
In addition, President Obama included in his proposed 2011 budget $25 million for a joint Labor-Treasury initiative to strengthen and coordinate federal and state efforts to enforce statutory prohibitions, and to identify and deter misclassification of employees as independent contractors.
Furthermore, if compliance was not hard enough, in March 2010 the WHD not only did an about face with regard the exempt status of mortgage loan officers—withdrawing two previous Opinion Letters from 2006—but the WHD announced that it would, for all practical purposes,be eliminating the issuance of Opinion Letters. Instead, the WHD will provide only references to statutes, regulations, interpretations and cases that are relevant to the specific request. Coupling the decision to stop issuing opinion letters with increased enforcement efforts indicates that the DOL is becoming more focused on punishing employers rather than helping them.