The Trump administration’s wage-and-hour chief is putting her own imprint on federal minimum pay and overtime enforcement through a wide-ranging bureaucratic reorganization designed to give political appointees more control, according to Labor Department documents obtained by Bloomberg Law.
The DOL Wage and Hour Division’s chain of command will be overhauled to give political leadership in Washington more oversight of the agency’s investigatory work throughout the country. Senior career executives, including a newly created data management position, will start reporting directly to a Trump-appointed deputy administrator. Certain government contracting and other enforcement positions have been eliminated, WHD Administrator Cheryl Stanton informed staff in an internal memo Aug. 22.
The changes come amid other recent moves by Stanton to seize a firmer grip on her agency, which regulates and enforces laws that aim to protect workers’ paychecks and family leave benefits and to prevent child labor violations. Shortly after she was sworn into office in April, Stanton emailed staff to revoke their previously delegated enforcement power until she had personally approved each action. She has since been gradually restoring certain authorities to her subordinates, including the ability to subpoena companies for evidence in wage-hour investigations, while issuing a policy to step away from other Obama-era enforcement tools.
“For several years, WHD has grown in size and scope resulting in work streams within WHD that no longer meet the agency’s mission,” Stanton wrote in justifying her plans. “The current organizational structure has impeded the strategic focus, hindered accountability, and deemphasized its attention to the field.”
However, Stanton’s claim of size increase comes as the agency has experienced significant attrition among investigators, which make up the bulk of the WHD’s overall workforce. As of May, the division was down to 775 wage investigators, a 20% decline in less than three years. At least 60 investigators have left since the start of the current fiscal year, or last October.
A DOL spokeswoman told Bloomberg Law that the WHD regional staff “has been asked to do more and more” in recent years and that the adjustments transfer more administrative work under the national office’s purview.
Stanton announced earlier this summer that she would hire 25 new employees to probe workplaces for payroll violations.
The new hierarchy, which will take effect along with all other announced changes on Oct. 1, gives current Deputy Administrator Keith Sonderling direct command over the WHD’s policy, program performance, budgetary, operations, and data functions. Sonderling, who was recently nominated by President
“The National and Regional restructuring was done to more closely align with WHD’s long-standing structure that existed before 2014,” the DOL spokeswoman said. “This structure reinforces the commitment to regional enforcement and data.”
The Obama administration’s sole Senate-confirmed WHD administrator, David Weil, arrived in office in 2014. Under Weil’s watch, the division implemented changes in enforcement strategy designed to ensure enforcement was targeted at businesses most likely to employ vulnerable workers and to be committing violations. Late in Weil’s term and shortly before Trump was inaugurated, the WHD shifted the chain of command to give Davidson authorities that had been previously overseen by his political deputy Laura Fortman.
Construction Wages Office Gone
Stanton is scrapping a separate office that enforces wage-and-hour requirements on government contracts, a move that could be perceived as de-prioritizing those investigations. Building trades unions, whose members have been more supportive of the administration than the majority of organized labor, have long been concerned that the DOL under new leadership may water down important wage protections for construction and other workers on public projects.
The position of assistant administrator for government contracts, instituted in the Obama administration, is being eliminated. Its responsibilities will be folded into the new “Office of Data Management” and the existing policy division.
“Given how fraught the Labor Department’s relationship with the building and construction trades unions has been around apprenticeship contracts and regulations, demoting the office that safeguards David-Bacon could add fuel to that fire,” said Seth Harris, a deputy and acting labor secretary during Obama’s presidency. After a mostly positive rapport in Trump’s first two years, trade union officials have more recently been critical of the DOL for a rulemaking to boost apprenticeship programs and the cancellation of apprenticeship contracts, which has since been reversed.
The head of the office of government contracts was responsible for “providing broad direction, management, and oversight” for the agency’s enforcement, policies, and prevailing wage surveys under the Davis-Bacon Act and Service Contract Act, according to the government’s description of the job. The 1931 Davis-Bacon Act requires employers to pay a prevailing wage, as determined by the WHD, to construction workers on public infrastructure contracts, while the Service Contract Act sets minimum pay and benefits levels for government contractors performing service work.
“I’m sure that many will attempt to shape a particular perception, but I highly doubt that the elimination of the Government Contracts position has anything to do with a de-emphasis on enforcement in those programs,”
Passantino now defends businesses as a partner at Seyfarth Shaw in Washington. He noted that it makes more sense to place government contracts enforcement in the same division that enforces the Fair Labor Standards Act, as well as to transfer wage survey work to the new data office.
Representatives for the construction union umbrella group, North America’s Building Trades Unions, didn’t respond to requests for comment. Several former Obama WHD officials and DOL staff unions didn’t immediately provide a comment, with some saying they are still trying to digest the revisions.
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(Updated with Harris reaction and additional DOL comment.)