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U.S. Labor Agencies Strike Deal to Share Enforcement Information

Jan. 6, 2022, 3:01 PM

The U.S. Department of Labor’s wage regulator and the National Labor Relations Board have struck an agreement to collaborate on investigations and share information on potential violations of law, specifically targeting independent contractor misclassification and retaliation against workers.

Their new memorandum of understanding, made public Thursday, will create a formal referral process for violations of federal labor and employment laws, making it easier for the government to pursue employers who have breached laws enforced by both agencies, Jessica Looman, acting administrator of the DOL’s Wage and Hour Division, said in an exclusive interview.

“This MOU allows us to have that formal referral process back and forth between the two agencies, so that we can help the worker get to the place where they need to be and have their rights enforced, as opposed to relying on the worker to have to try to navigate the government system on their own,” Looman said.

The agreement will take effect immediately at the WHD. Looman said the agency will review its current investigations for cases that may have potential overlap with the federal labor board.

The NLRB and the WHD will work together to create a system to share information in an effort to “maximize” and “improve” enforcement, according to the agreement, which was signed in early December.

The new pact partners two agencies with similar goals. The NLRB enforces the National Labor Relations Act, protecting workers’ federal right to form a union and speak up about working conditions, while the Labor Department’s wage regulator enforces the Fair Labor Standards Act, ensuring minimum wage and overtime standards, among other laws.

Employers often violate measures from each at the same time—for example, a crooked manager could deny workers overtime pay and then retaliate against them when they complain. But bad actors aren’t always held accountable by both the WHD and the NLRB, because their investigations operate independently.

The agreement is the latest sign that the Biden administration is toughening its enforcement posture on the issue of businesses shedding legal liability by classifying workers as independent contractors rather than employees who are subject to additional protections under the law.

“Particularly in so many low-wage sectors, we see workers being misclassified as independent contractors,” Looman said. “If we can work together to help identify that misclassification, we can help both address that for the individual workers who are being misclassified but also help address it as a problem for different sectors or industries where they’re using that business model of misclassification” to avoid their obligations under the law.

Under the pact, WHD and labor board officials can request information that supports their agency’s enforcement initiatives as permitted by law, or officials can refer information to the appropriate agency.

The agreement also says the agencies will work to “systematize” information sharing regarding “the identification and investigation of complex or fissured employment structures,” including single or joint employer relationships, among other areas. The WHD and NLRB also plan to hold joint trainings for their field staff and team up on outreach and education efforts involving labor rights.

The agreement follows a tri-agency discussion late last year involving DOL, the NLRB and the U.S. Equal Employment Opportunity Commission that sought to address employer retaliation against workers when they file complaints, cooperate with investigators, or engage in collective activity.

“All too often, workers face adverse action for speaking out about their compensation, whether it is discussing their wages, fighting back against wage theft, or advocating for higher wages,” NLRB General Counsel Jennifer Abruzzo said in a written statement. “These issues frequently cut across multiple worker protection agencies, which is why it is so important to work collaboratively to prevent and address them.”

To contact the reporters on this story: Rebecca Rainey at rrainey@bloombergindustry.com; Ian Kullgren in Washington at ikullgren@bloombergindustry.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com