Commentary: Wages and Hours compliance

Later this week, the nomination of Alexander Acosta to be the next Secretary of Labor will likely be voted out of the Senate HELP Committee and head for confirmation on the Senate floor. The administration made headlines just prior to his confirmation hearings outlining cuts to the Department of Labor budget in the neighborhood of $2.5 billion or roughly 20%.



If the cuts are sustained, they likely will come at the expense of job training and similar programs. One area that we know will be pared back, one way or the other, is enforcement, specifically in the Wage & Hour division.



The Obama Administration pursued a program of zealous enforcement of violations, specifically “working off the clock” and meal and rest breaks whereby they classified such infractions as “wage theft.” While the Acosta said little in this regard during his confirmation, hearing, operators and other retailers can expect a “climate change” in the enforcement environment.



But before business owners think the heat is off, think again. Since the labor community was quite supportive of the Obama administration’s approach to enforcement, they put relatively little pressure on enforcement mechanisms at the state and local level.



That will change now. We should expect many state attorneys general, especially those in big, blue populous states like California, New York, Illinois and others to get into the game and pick up the mantle. New York Attorney General Eric Schneiderman has already been aggressive in this space and filed numerous actions against employers, even putting a franchisee from a prominent restaurant chain in jail. Schneiderman and others will now ramp it up.



Expect “wage theft” to become a common refrain among state and local agencies, as well as policymakers. Enforcement is enforcement and whether it happens at the federal or state/local level, it will happen nonetheless.



Plaintiffs attorneys will also get in the game in a bigger way and fill the gaps. Operators and retailers need to maintain vigilance when it comes to compliance and in this regard, pretend the election never happened.

Joe Kefauver is managing partner of Align Public Strategies, a full-service public affairs and creative firm that helps corporate brands, governments and nonprofits navigate the outside world and inform their internal decision-making. Align specializes in service sector industries.