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- January 7th, 2010
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Labor law violators are rarely fined
January 7th, 2010
By Clark Kauffman, DesMoinesRegister.com
The U.S. government fined only three of the 797 employers that violated federal labor laws while paying subminimum wages to disabled workers over a five-year period.
The newly disclosed statistics come from the U.S. Department of Labor and are in response to questions posed nine months ago by U.S. Sen. Tom Harkin, D-Ia.
Harkin has been studying the enforcement of a 71-year-old federal law that enables companies to pay disabled workers less than the minimum wage if they first obtain federal approval.
Harkin chaired a Senate committee hearing that examined why Henry’s Turkey Service was allowed to pay its mentally retarded workers 41 cents an hour to work in a turkey processing plant in West Liberty.
Critics say the new statistics confirm what they have long alleged: Companies typically have nothing to lose by violating wage-and-hour laws intended to protect disabled workers.
Harkin said Monday that there is “no question” the law currently fails to provide the disabled with “fair employment opportunities that are sufficiently policed to prevent exploitation.”
He said he is preparing “substantial legislative changes” that he expects to make public in the next few months.
Federal fines for labor law violations can be imposed only in cases of willful or repeated misconduct. The department accused Henry’s Turkey Service of labor-law violations in 1997, 1998 and 2003, but the department did not impose any fines or penalties against the company.
Department of Labor spokesman Joseph De Wolk said that of the 797 cases described in the report to Harkin, 635 stemmed from “self audits” by employers.
Those cases were excluded from the penalty process, he said, because the department would have been unable to prove the violations in court.
De Wolk said many of the violators were small, non-profit agencies for which a penalty may not have been appropriate.
The 797 cases, handled between 2003 and 2008, involved almost $5 million in unpaid wages owed to more than 18,500 workers. All but eight of the cases resulted in an order to pay back wages to the workers.
In the three cases that resulted in penalties, the fines totaled $8,360.
Curt Decker of the National Disability Rights Network said the numbers illustrate a long-standing problem with the department’s inability to effectively enforce labor laws.
“I do think that sanctions and fines, when they’re appropriately administered, send a great message to people about abusing the law and treating certain people as having less value than others,” he said.
Over the past four years, roughly 10,000 employers asked the Department of Labor to renew the certificate that authorized them to pay disabled workers less than the minimum wage. Only two of those requests were denied.
In Iowa, there are 88 employers now authorized to pay less than the minimum wage. Most of them are nonprofit agencies.
“They grant that authorization easily,” Decker said, “and they don’t do any follow-up or oversight, and they don’t look at the workers’ productivity to see if they’re being paid a fair wage. It just seems like a system that really is ripe for abuse.”
The Department of Labor sued Henry’s Turkey Service in civil court, alleging multiple violations of federal labor laws.
In a separate action, Iowa Workforce Development has imposed a $900,000 fine on the company for alleged violations of state labor laws.
The company is appealing that fine.
The state case involves allegations of illegal deductions from workers’ pay and failure to pay the minimum wage. In Iowa, there are no criminal penalties for those offenses, and the civil penalties for each violation are capped at $100.
Nationally, the number of enforcement actions in response to alleged violations of wage-and-hour laws has dropped from 47,000 in 1997 to 30,000 in 2007.
Earlier this year, the Government Accountability Office alleged that the Department of Labor took a year or more to respond to some workers’ complaints of unpaid wages and lied to others about efforts to resolve their complaints.