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Monday, May 2, 2011

Inconsistent Enforcement of State Wage and Hour Laws Could Lead to "Regulatory Race to The Bottom, " New Study Finds

The National State Attorneys General Program at Columbia Law School has issued a report on state wage and hour law enforcement, analyzing survey responses from 37 states and the District of Columbia. Workers' compensation benefits are usually determined by the amount of wages paid to the injured worker at the tie of the accident. Low wage reduce the amount of workers' compensation benefits to be paid.

The study is the first of its breadth and depth to be conducted on a national scale, and includes an objective analysis of wage and hour enforcement on the state level, measuring the methods and extent of enforcement, and the ability of states to track and share data on wage and hour enforcement. It is based on data available in the fall of 2010.

As the report notes, while 45 states have minimum wage laws, the mere existence of such laws does not mean they are followed. “Without meaningful enforcement by state regulators, some employers will simply disregard their legal obligations if doing so allows them to save time, money or effort, putting the majority who wish to abide by the law at a significant competitive disadvantage,” the report warns. “This creates a regulatory race to the bottom by states as they seek to compete to attract businesses.”

Among the study’s key findings:
·        Most states surveyed saw a significant increase in the number of low-wage workers in 2009. That increase was often matched by corresponding cuts or freezes in resources devoted to wage and hour enforcement. Alleged violations over pay for low-wage workers generate the most wage and hour complaints.
·        The degree and scope of wage and hour enforcement varies widely among the states. Some state labor departments have more comprehensive mandates, which include oversight of child labor, worker training, and employment discrimination, while Alabama, Georgia, Louisiana, Mississippi and Florida have no state agency that enforces wage and hour standards. In these states, complaints are referred to the federal government or private attorneys.
·        The most common way that states identify potential wage and hour violations is via individual complaints by employees. Of the few states that engage in more proactive enforcement, their primary focus was violations of prevailing wage laws—which establish wages for public works projects—and employee misclassification laws—which aim to prevent employers from evading wage and hour and other labor laws.
·        The number of complaints trailed off as the recession began in 2008, which the study suggests could be linked to employees being more hesitant to challenge employers in the midst of harsh economic conditions. Wisconsin noted specifically that it had experienced lower complaint totals during prior economic slowdowns.

The study was conducted by attorneys Jacob Meyer ’09 and Robert Greenleaf, under the direction of James Tierney, director of the National State Attorneys General Program. Funding for the study came from the United Brotherhood of Carpenters, International Brotherhood of Electrical Workers and other unions, as well as employer groups such as the National Electrical Contractors Association.

The report does not issue any recommendations other than to call for more research by states and other stakeholders about how to improve wage and hour enforcement, especially in the face of sharply curtailed state budgets.

“We realize the fiscal realities faced by the state, but this is one area that can’t be ignored,” said Tierney, who served as Maine’s attorney general from 1980-1990. "But without sufficient enforcement, families, law abiding businesses and the communities where they live in will be hurt. That would only be a further drag on the economy. We hope that this report will stimulate discussion and result in increased state-by-state research on the effectiveness of state wage and hour enforcement."

The report can be found below:

For over 3 decades the Law Offices of Jon L. Gelman  1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.