Wage and labor agencies hoping to reduce duplicate efforts, attorney says

By Karen Kidd | Aug 24, 2016

HARRISBURG – Reducing duplicate effort is among the benefits that government wage and hour officials hope will result from a recent partnership between federal and state agencies, a Philadelphia labor and employment attorney says.

"Otherwise, they would operate as different parties, as agencies often do," Daniel V. Johns, partner in Ballard Spahr's Philadelphia office, told the Pennsylvania Record.

Such duplication of effort is common among the many differing state and government agencies that monitor wage and labor law enforcement in the nation, Johns feels - "They could easily work on the same issue and they wouldn't know it," he said.

The partnership between the U.S. Department of Labor’s Wage and Hour Division and the Pennsylvania Department of Labor & Industry was announced in a press release issued Aug. 4 by the U.S. Department of Labor. The partnership is part of the federal agency's misclassification initiative.

The two agencies signed the three-year Memorandum of Understanding to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses, the press release said.

"The two agencies will provide clear, accurate and easy-to-access outreach to employers, employees and other stakeholders, share resources, and enhance enforcement by conducting coordinated investigations and sharing information consistent with applicable law," the press release said.

The U.S. Labor Department has signed similar agreements with agencies in dozens of states, including Alaska, California, Florida, Idaho, Kentucky, Louisiana and Vermont. These agreements are part of the department's continued focus on misclassification issues, particularly those concerning independent contractors.

Minimum wage in Pennsylvania currently is $7.25 per hour. In March, Gov. Tom Wolf issued an executive order to raise the minimum wage for state government employees and workers on jobs contracted by the state to $10.15.

The announced partnership comes only a few months after the report "Shortchanged: How Wage Theft Harms Pennsylvania's Workers and Economy" was released by the Sheller Center for Social Justice at Temple University’s Beasley School of Law. The report found that in any given work week, almost 400,000 Pennsylvania residents suffer a minimum wage violation, more than 300,000 experience an overtime violation and workers in the state lose between $19 million and $32 million in wages.

The report included four pages of recommendations, including improvements at the Pennsylvania DLI Bureau of Labor Law Compliance and imposing criminal penalties against employers in the state who violate wage and hour laws.

The announced partnership also follows a U.S. Supreme Court decision last spring not to consider a $187.6 million Pennsylvania class action case involving several thousand Wal-Mart employees.

The Pennsylvania DOL's Industry, Bureau of Labor Law Compliance has had a number of successes over the years, including getting more than $745,000 in unpaid wages for laid off-workers at Infinite Care in Philadelphia last year.

However, wage and labor allegations continue to be filed in state courts. In April, a former Cenergy International Services employee filed suit in the U.S. District Court for the Middle District of Pennsylvania over allegations of unpaid overtime compensation. The following month, Rush Wellsite Services employees filed a class action lawsuit against that company over alleged failure to pay proper overtime compensation.

In June, a class action was filed in U.S. District Court for the Western District of Pennsylvania against Cinco Energy Management Group, alleging violations of the Fair Labor Standards Act of 1938 and the Pennsylvania Minimum Wage Act.

This month, lawsuits alleging wage and labor law violations have been filed against JDK Management Company, Chili's Bar and Grill and Concordville Development.

Pennsylvania employers can take comfort in the fact that the announced partnership changes no Fair Labor Standards Act or state wage and hour laws. That means it's still perfectly legal to employ independent contractors and any challenges remain up to the courts, not the two governmental agencies.

Other than that, it isn't clear how the announced partnership will affect employee lawsuits, those already in the courts and those to come, Johns said.

"It's hard to know," he said. It's possible that the partnership will bring with it additional enforcement options, Johns said.

"There certainly is a feeling that there will be more of an effort to hold employers accountable, which could result in more litigation," Johns said.

While there remain the usual options for businesses to influence policy, Johns said the time for input in regards to this announced partnership is largely over.

"In some ways, no, they're not going to have much opportunity for input," Johns said. "I'm sure people will try to address it as best they can but, otherwise, it's kind of done and over."

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