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Ask not for whom the labor agency comes, it comes for thee

January 10th, 2013  |  Matt Pavich

Well, we’re just about two weeks into the new year and two actions announced on January 10, 2013 by the Obama Department of Labor and National Labor Relations Board may signal an aggressive pro-labor stance by the two key labor agencies. If you thought that the gloves were off before, in a purely L&E sense, these new actions suggest that you’re in for a rude awakening.

The DOL published a request for comments on its proposed information collection into worker’s knowledge of basic employment laws, part of the DOL’s ongoing efforts to combat employee misclassification. In the notice, the DOL states that the study is intended to improve the DOL’s understanding of workers’ experiences with employee misclassification, which it defines as “…the practice, intended or unintended, of improperly treating a worker who is an employee under the applicable law as in a work status other than an employee (i.e., an independent contractor.)”

Now, the DOL has good reasons for pursuing employee misclassification. It claims that if only one percent of workers were misclassified, the loss in unemployment insurance revenue alone would be $220 million annually. In addition, the DOL cited a finding by the U.S. Government Accountability Office that unpaid taxes stemming from employee misclassification may amount to more than $2.7 billion annually.

Thus far, the ongoing DOL effort to clamp down on this costly practice has recovered more than $29 million in back-pay for over 29,000 employees since 2009. The new information collection, however, indicates that the DOL now wants to do more than simply prosecute cases of employee misclassification. It now seemingly is taking steps to ensure that workers know whether they’re being misclassified. That effort could result in even more wage and hour suits being filed, a prospect that no doubt sends a chill down the collective neck of the business community. The recently announced retirement of Labor Secretary Solis can be expected to derail the emphasis on wage and hour suits not one bit.

And that’s not all. The favorite labor-related punching bag of the first term of the Obama Administration is back with an alteration to its longstanding policy on remedies.

In a move that will almost certainly raise suspicions, Acting General Counsel Lafe Solomon announced that his office will now allow the inclusion of front-pay in Board settlement agreements. While the move is ostensibly intended to remedy the increasingly disparate approach to front pay in lieu of reinstatement taken by the various regional offices, it’s hard not to see the change as putting another weapon in Solomon’s arsenal. If the Board starts tacitly encouraging front-pay, employers could be facing a financial windfall… for their former employees.

The faces may change, but the aggressive, pro-labor actions of the Obama Administration apparently won’t.