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Violations of Wage Laws Targeted in Crackdown, Solis Says

The Obama administration is cracking down on violations of laws governing pay and working hours, especially in the health-care, tourism and construction industries, Labor Secretary Hilda Solis said.

The agency is backing a proposal requiring employers to give workers more information about pay to help curb wage-and- hour violations, Solis said today at a media breakfast sponsored by the Christian Science Monitor in Washington.

“The idea is promoting more transparency so people can know how salaries are being calculated,” she said. “Wage theft occurs and it’s to make accountable businesses not playing by the rules.”

The proposal would require companies to give employees a report explaining how their pay and hours are set and is aimed at ensuring companies compensate workers for overtime. The U.S. Chamber of Commerce, the largest U.S. business lobby group, in March began briefing its members about the possible regulation that they said will encourage lawsuits by workers.

President Barack Obama’s administration is stepping up enforcement of wage-and-hour rules. Employers paid $6.5 million in back wages in the year ended Sept. 30 in response to Labor Department lawsuits, more than double the $2.6 million in the previous year, according to a report last year by Seyfarth Shaw LLP, a Chicago law firm that represents employers.

Solis today identified industries such as construction and health-care where employers fail to comply with pay laws.

Minimum Pay, Overtime

A 2009 study of 4,400 low-wage workers in Chicago, New York and Los Angeles found 26 percent earned less than the minimum hourly wage, and 76 percent who worked overtime in the previous week weren’t paid for the time, according to a report released by the New York-based National Employment Law Project, the Center for Urban Economic Development in Chicago and the UCLA Institute for Research on Labor and Employment in Los Angeles. The study examined employees in such industries as construction, food service, retail and home health-care.

The Fair Labor Standards Act requires overtime payments for 130 million workers, according to the Labor Department website. The average settlement in the 10 biggest wage-and-hour class- action lawsuits was more than $12 million last year, according to Littler Mendelson PC, an employment law firm in San Francisco that tracks such cases.

Employees eligible for overtime must receive no less than 1 1/2 times their regular compensation for work exceeding 40 hours in a work week.

To contact the reporter on this story: Stephanie Armour in Washington at sarmour@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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