Newly appointed Labor Secretary Thomas Perez addressed the 2013 AFL-CIO Convention earlier this week, providing details on the Obama Administration’s legislative and administrative wage-hour agenda for the remainder of the President’s second term. The wage-hour agenda likely will be overseen by the President’s new nominee for Wage and Hour Administrator, Dr. David Weil, a professor at Boston University.
Among the top priorities Secretary Perez highlighted is the Department’s commitment to pursue Davis-Bacon Act violations by federal contractors who fail to pay prevailing wages on covered construction contracts. The Secretary indicated the DOL’s intent to continue to move to debar offenders, preventing or impeding their ability to obtain future federal contract work. “While Davis-Bacon Act enforcement historically has been selective, the increase in DOL investigation activity combined with the stepped up use of the ‘nuclear option’ debarment sanction makes compliance paramount,” observed Jackson Lewis Partner and Davis-Bacon expert Leslie Stout-Tabackman. “Indications that the debarment penalty is being wielded more freely in an effort to ‘weed out’ alleged violators means every business engaged in Davis-Bacon covered work should take a renewed look at its compliance efforts.”
The Secretary pledged to continue the Department of Labor’s crackdown on misclassification of workers as independent contractors, going so far as to call “misclassification” a misnomer that should be categorized as “workplace fraud.” On the heels of recovering a record $280 million dollars in back wages in 2012, Secretary Perez emphasized the Department of Labor’s plan to continue seeking liquidated damages in more cases than in past years.
Secretary Perez also reiterated the Obama administration’s support for increasing the federal minimum wage. As it is questionable whether there is enough support in Congress for legislation to increase the minimum wage on the federal level, employers likely will continue to see legislative action at the state level, leaving a continually fragmented patchwork of minimum wage laws for multi-state employers to manage.
Secretary Perez’s comments are consistent with the Department of Labor’s aggressive enforcement posture under President Obama. Employers should not expect any downturn as the Administration continues to carry out its agenda.