Wage Division Reports Banner Year for Fines, Record Low Actions

The US Labor Department’s wage enforcement arm assessed nearly $26 million in fines against employers in 2023, the highest on record in a decade.

The Wage and Hour Division, in charge of policing federal minimum wage, child labor, overtime, and other labor laws, concluded 20,215 compliance actions and recovered about $212.3 million in back wages in FY 2023, data from the agency show. That’s roughly on par with the 20,422 enforcement actions and roughly $213.1 million in back wages collected in FY 2022, but also marks the lowest enforcement year since at least 2013, according to the agency’s records.

Despite the lower number of cases, the agency still fined employers a 10-year-high of $25.8 million in civil monetary penalties for violations of federal labor laws in 2023. Businesses hit with those fines include a Subway restaurant operator in San Francisco and Wisconsin-based Packers Sanitation Services Inc., both of which were accused of illegal child labor, among other claims.

The past year’s enforcement numbers provide some insight into how budget constraints may be impacting the agency’s enforcement work. They also underscore calls made by Democrats and worker advocates that the DOL’s worker protection agencies need more resources to carry out the agency’s mission—especially as the department takes on new initiatives like its child labor exploitation taskforce.

“There is a budget issue here, Wage and Hour is severely understaffed,” Catherine Ruckelshaus, general counsel at the National Employment Law Project, said in reaction to the data.

Rebecca Rainey

The wage division is currently facing a probe from the DOL’s inspector general over its response to a surge in child labor violations, and the DOL’s Office of the Solicitor has turned away at least one case in recent months due to a lack of resources.

It’s also grappling with a record low number of investigators, with only 733 on board as of December, according to a blog post from the agency. The Biden administration requested a nearly $81 million boost for the wage division in 2024, arguing that it’s still struggling with hiring backlogs caused by the flat funding its received in recent years.

“They’re starting to build back up again, even within the budget cap they have,” Ruckelshaus said, but she noted that bringing on new investigators also presents “a lag time in terms of training and expertise.”

Beyond the Numbers

Labor observers warn that the topline numbers don’t provide the full picture or strength of the agency’s enforcement work, however, especially because they only reflect cases closed by the agency and don’t include pending investigations.

“There are definitely limitations from a personnel perspective and a caseload perspective as to how many enforcement actions can be pursued at any given time,” said Jeffrey Ruzal, a former trial attorney in the DOL’s solicitor’s office. He noted there are numerous factors that can influence differences in the year-end figures, like the nature of the violation, the length of the investigation, or whether the employer cooperates with investigators.

“The number of cases, in my opinion, does not in any way reflect any sort of paucity in the robustness of its enforcement agenda,” said Ruzal, who is now an attorney at Epstein Becker & Green P.C.

The amount of back wages collected by the department also comes with caveats when using it to assess the agency’s enforcement work. The wage division typically targets low wage industries, which could depress the amount of back wages the agency is able to recover each year.

“If you’re really doing your job and going after the low wage, high violation industries, your dollars aren’t going to look high, because by definition, the damages are low,” said Ruckelshaus.

Rebecca Rainey

Overall, Ruzal said that although the topline numbers from the wage division may look lower this year, that hasn’t been reflected in the agency’s enforcement presence.

“In my practice, I have not seen any noticeable decrease or reduction in the number of investigations or audits that are brought against companies in which I’m involved. So, you know, on a micro level, I’m not seeing any particular difference,” he said.

Repeat Offender Crackdown?

The wage divison’s record year for civil monetary penalties could be a sign that the agency is going after employers for “repeat” violations, which can draw higher fines, or that it’s targeting enforcement on violations that don’t necessarily draw back-wage awards, like those that are part of its child labor enforcement initiative.

The record penalties reported by the division “could very well reflect a greater number of investigations of recidivist employers” Ruzal said, and would also explain why the agency reported fewer back wages this year.

Part of the uptick is also likely attributable to the child labor enforcement focus the agency launched in February, in an effort to curb a rising trend of children working in illegal conditions across the US. The agency nearly doubled the amount of penalties assessed for child labor violations this year, fining employers more than $8 million in FY 2023 compared to about $4.4 million in FY 2022.

In response to a request for comment, a wage division spokesperson said the agency is “wholly committed to strategic enforcement of worker protections focused on the nation’s most vulnerable workers.”

It’s also working to increase access to its services by partnering with “diverse stakeholders,” they said in an emailed statement, and will use “every available tool to protect the rights of workers in historically low-wage and high violation industries.”