Thursday, May 7, 2009, 4:31 PM

"A New Sheriff in Town"

Hilda Solis - former Democratic member of Congress and the new Secretary of Labor - told the AFL-CIO, "You can rest assured that there is a new sheriff in town." The Administration and Congress have now given the sheriff a larger posse and a potful of money. The 2008 budget gave DOL $175.7 million for wage-hour enforcement; that rose to $193.1 for 2009, and the stimulus package in ARRA added another nearly $5 million. The 2010 tally is a whopping $227.7 million for this function alone; the total DOL budget request is $104.5 billion for discretionary and mandatory programs. If you want to see the details, look at the 81-page "budget in brief" at http://www.dol.gov/dol/budget/2010/PDF/bib.pdf; the wage-hour discussion is on page 36. Solis plans to add at least another 150 wage and hour field investigators, plus 100 more to focus on employers who have received stimulus payments. Additionally, you may have noted that the Administration has determined enforcement of laws and regulations targeting union corruption as "not a priority"; in fact, the overall DOL budget is less than 2009's, reflecting a reordering of what the agency deems important.

The DOL initiative is buoyed by the release of a General Accounting Office report charging that the Wage and Hour Division of DOL "has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn." Secretary Solis has also pledged that those Department employees who were negligent or dishonest in the past will be dealt with. All in all, you can expect the agency to be persistent and exhaustive in its efforts, and the plaintiffs' bar will take note. FLSA filings were marginally down last year; don't expect that trend to continue. By the way: state agencies with wage enforcement responsibility are likely to echo, or even attempt to outstrip, their federal counterpart; for example, more than 3000 California employees of a Michigan-based construction company recently garnered an aggregate settlement of $8.5 million as a result of alleged nonpayment for hours spent performing gutter installation work. Gutierrez v. Schmid Insulation Contractors Inc., CV 08-6010 (C.D. Cal., 3/9/09). A prudent employer will take note and attempt to insure it isn't the first kid on the block to have one of these problems.

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