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eTrends - U.S. Department of Labor Strategic Plan, Fiscal Years 2011-2016

10.29.2010

The U. S. Department of Labor's Strategic Plan, Fiscal Years 2011-2016 ("Plan") confirms that the Department intends to continue increased enforcement activity particularly in the industries it views as "high-risk," such as agricultural, janitorial, construction, hotel/motel, food services, and home health care industries.

The Plan, dated September 30, 2010, provides the Department's "strategic goals" and its "outcome goals" for the next five years. The first of the strategic goals is: "prepare workers for good jobs and ensure fair compensation." To achieve this goal, the Department has as an outcome goal: "secure wages and overtime." In addressing these goals, the Plan states that the Department intends to concentrate its enforcement resources on "vulnerable workers." Vulnerable workers are "those who are at risk of exploitation at work, such as young workers and workers who are reluctant to file complaints when they are subject to violations at work." The Department believes many vulnerable workers are employed in what it calls "fissured" industries. Fissured industries are "those sectors that increasingly rely on a wide variety of organizational methods that have redefined employment relationships: subcontracting; third-party management; franchising; independent contracting; and other contractual forms that alter who is the employer of record or make the worker-employer relationship tenuous and less transparent." (Plan, p. 30) The Department is concerned that employers in these types of industries often fail to recognize or classify workers as employees, and thus, the workers may be subject to unfair treatment and disparate wages.

The Plan states that the Department will ensure compliance with the Fair Labor Standards Act ("FSLA") not only by collecting back wages when appropriate, but also through "enforcement activities, litigation strategies, and penalty assessments." The Department intends to expand its public awareness programs through such programs as the current We Can Help campaign and will continue its use of Spanish/English bi-lingual public service announcements.

Of particular interest to employers is the Department's proposal in the Plan that recordkeeping requirements under the FLSA be modified to require that covered employers notify individually each of their workers of their rights under the FLSA. Employers would be required to provide individual employees with information regarding hours worked and wage computations. This proposed change in the recordkeeping requirements is expected to be published as a Notice of Proposed Rulemaking in 2011.

All employers, not only those in the identified "high-risk" industries, should be aware of the Department of Labor's emphasis on enforcement as articulated in its recently published Strategic Plan and should consider conducting internal audits of worker classification and compensation in advance of any investigation by the Department of Labor.

Please contact Susan Parrott with any questions.

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Smith Anderson publishes eTrends periodically as a service to clients and friends. The purpose of this eTrends is to provide general information about a significant legal development in the field of employment law. Readers should be aware that the facts may vary from one situation to another, so the conclusions stated herein may not be applicable to the reader’s particular circumstances.

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