Examine Wage Practices: U.S. DOL Recovers Record Amount of Back Wages
In fiscal year (FY) 2019, the U.S. Department of Labor (DOL) recovered a record $322 million in wages for workers, up from $304 million in FY 2018. The DOL also held more than 3,700 educational outreach events to help employers understand their responsibilities under the law. Employers should examine their wage-and-hour practices to make sure they are complying with state and federal laws.
In the last five years, the DOL has recovered more than $1.4 billion in back wages for more than 1.3 million workers. Recognizing that most employers want to play by the rules, the DOL has conducted more than 16,000 outreach and education events in the past five years to educate both employers and workers on wage-and-hour compliance.
“We are delivering a level playing field for employers and employees alike,” said Wage and Hour Division Administrator Cheryl Stanton in a press release. “We are delivering more back wages for workers than ever before, and we are steadfastly eliminating any unfair economic advantage employers may try to gain by skirting the rules. We are protecting those who do the right thing, pay their employees what they have legally earned, and operate in compliance.”
The top industries that had the most money in back wages recovered are:
- Construction ($48 million);
- Food services ($36 million); and
- Health care ($14.8 million).
The DOL is constantly improving their data-driven tools to focus their resources more efficiently and secure the largest possible impact. For FY 2019, the DOL recovered an average of $883,000 per day in back wages, which averages to $1,025 for each employee. Employers who don’t comply with state and federal wage-and-hour practices may face heavy fines, civil or criminal penalties, and class-action lawsuits.
Employers should examine their wage practices with a self audit, especially in the current climate of increased enforcement.
Although employers might cringe when they hear the phrase “self audit,” the process isn’t as bad as it sounds. Like any other process, following a plan makes things simpler. But these audits can backfire if they’re not conducted properly.
Employers can download our free Eight Steps for Examining Your Wage Practices white paper, which outlines the key steps you need to take when you prepare a plan for a self audit. CalChamber members can read the white paper here.
Katie Culliton, Editor, CalChamber