Shapiro, Murphy announce partnership for labor law enforcement

Posted by National Alliance for Fair Contracting on

April 17, 2023

PHILADELPHIA – New Jersey Gov. Phil Murphy and Pennsylvania Gov. Josh Shapiro last week visited the International Union of Painters and Allied Trades (IUPAT) District Council 21 training facility in Philadelphia to tour the innovative center and announce their intention to form an interstate task force to address wage theft and worker misclassification in the two states.

The interstate task force will work to better foster the collaborative enforcement of each state’s labor laws, which include robust worker protections, while enabling healthy business competition between good actors.

New Jersey and Pennsylvania entered a regional memorandum of understanding agreement in 2019 to facilitate data sharing, joint investigations and cooperative referrals. Thursday’s commitment to a continued partnership between the two states bolsters those efforts and demonstrates Shapiro’s and Murphy’s ongoing focus on worker protections.

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Earlier in the day, the governors directed Rob Asaro-Angelo, commissioner of the New Jersey Department of Labor and Workforce Development, and Nancy Walker, acting secretary of the Pennsylvania Department of Labor & Industry (L&I), to ensure a continued partnership between the states, highlight specific opportunities the departments should pursue, and request the identification of key individuals within each agency to serve on the interstate task force.

“Cooperative efforts with our partners in Pennsylvania are crucial to bringing fairness to workers and businesses in our region,” said Asaro-Angelo. “This teamwork among states ensures consistent enforcement, and dissuades bad actors from exploiting workers on both sides of the Delaware River.”

“Worker misclassification is not a phenomenon that exists only in the construction industry or in large metropolitan areas. Law-abiding contractors are losing out on bids across the commonwealth, and workers in virtually every sector are losing out on rights and protections they’ve earned as an employee. Workers represented by unions are protected from misclassification, but too many workers are vulnerable to the exploitative actions of bad actors,” L&I Acting Secretary Nancy Walker said. “I look forward to continued collaboration with our partners in New Jersey to hold accountable those employers who think they can get away with cheating the system.”

In response to growing misclassification problems in New Jersey, Murphy issued Executive Order No. 25 on May 3, 2018, establishing an interagency misclassification task force to “promote fairness, fight against discrimination, and work to end unfair labor practices… that create an unfair advantage over companies that play by the rules and hurt our working families.” New Jersey has since been considered the “gold standard” for addressing worker misclassification. Similarly, the Pennsylvania Joint Task Force on Misclassification of Employees, created by Act 85 of 2020, made 15 recommendations to improve data sharing, strengthen compliance laws, and increase interagency collaboration, all of which are furthered by Thursday’s action.

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DOL and IRS Unite to Battle Misclassifying Workers

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Jan. 12, 2023 | David Sparkman

Agreement follows similar arrangements between other federal agencies.

In mid-December 2022, the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) published an updated Memorandum of Understanding (MOU) for employment tax referrals that arise from investigations of workers’ possible employment misclassifications.

This agreement follows a pattern of similar partnerships entered into by other federal agencies during the Biden Administration that also have been crafted specifically to deal with the classification issue.

“We are determined to identify and resolve labor violations by employers who benefit by misclassifying employees as independent contractors and deprive them of the protections of the labor standards laws we enforce,” said Jessica Looman, principal deputy wage and hour administrator.

In 2011, DOL’s Wage and Hour Division (WHD) and the IRS first entered into a similar MOU to allow both agencies to use their resources to promote employer compliance with obligations to pay employee’ and related employment taxes.

The new MOU explains that the two agencies will establish a methodology for exchanging investigative leads, complaints and referrals of possible violations “to the extent allowable by law and policy.” However, the agencies assert that the terms of the MOU do not provide for any exchange of federal tax information.

The memo explains that the collaboration will enable both agencies to leverage existing resources and promote employer compliance with obligations to properly pay their employees and to pay all applicable employment taxes.

Although concerns over misclassification have been around for decades, the primary target has most often centered around independent contractors, such as trucking owner-operators. Concerns at the state level have included the failure of contractors to pay for workers’ compensation insurance and unemployment taxes. The focus has been expanded in recent years to include all sorts of freelancers and gig workers, such as computer programmers, and also has been a long-term issue for the nation’s labor unions who are prohibited by law from organizing independent contractors.

A new set of criteria that eliminates most of those workers who previously were able to legally claim independent contractor status was enacted in a California law and is being emulated by other states. The California approach also is contained in legislation that was introduced by Democrats in Congress as soon as President Biden was sworn in but has yet to make much headway.

Before the DOL-IRS announcement took place, the most recent similar agreement between federal agencies was forged between the National Labor Relations Board (NLRB) and the Federal Trade Commission (FTC) regarding gig workers. That MOU is aimed at addressing a number of other labor law issues in addition to workers’ misclassification, such as noncompete and nondisclosure provisions that may be included in worker contracts.

The new DOL-IRS agreement states that the “collaboration will enable both agencies to leverage existing resources and promote employer compliance with obligations to properly pay employees and to pay employment taxes. This multi-agency approach presents a united compliance front to employers and their representatives.”

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L&I Partners With U.S. Department Of Labor To Coordinate Labor Law Enforcement In Pennsylvania

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Pennsylvania Pressroom
8/19/22

​Harrisburg, PA – Department of Labor & Industry (L&I) Secretary Jennifer Berrier today announced a Memorandum of Understanding (MOU) between L&I and the U.S. Department of Labor’s Wage and Hour Division (DOL) to share information regarding violations of labor and workers’ compensation laws that fall under the investigation purview of both departments.

“Our partnership with the federal Department of Labor extends greater protections for Pennsylvania’s workers and ensures more robust compliance assistance for employers,” Berrier said. “Sharing information and resources between federal and state agencies charged with enforcing similar laws allows us to better achieve our joint mission of protecting Pennsylvania workers effectively and efficiently.”

Created due to the overlap in some of the services that the DOL administers, and laws enforced by L&I’s Bureau of Labor Law Compliance and Bureau of Workers’ Compensation, the MOU establishes a five-year agreement, allowing DOL and L&I to partner where applicable. The agreement allows the departments to, among other things, perform joint investigations throughout the commonwealth, share training materials, assist employers and employees with compliance assistance information, coordinate enforcement activities, and suggest referrals for violations.

“We look forward to working with Pennsylvania Labor & Industry as our partner. Our combined efforts will enhance our own resources and ensure increased compliance by employers throughout the commonwealth,” said DOL’s Northeast Wage and Hour Division Regional Administrator Mark Watson. “Our agencies share a common purpose of ensuring the proper working conditions for workers in Pennsylvania. Our working together and sharing resources to achieve efficiency in that common purpose makes sense.”

The Department of Labor & Industry enforces 14 labor laws, including the Construction Workplace Misclassification Act (Act 72), Prevailing Wage Act, Child Labor Act, Minimum Wage Act, Wage Payment Collection Law, Prohibition of Excessive Overtime in Health Care Act (Act 102), Medical Pay Law, Apprenticeship and Training Act, Equal Pay Law, Industrial Homework Law, Personnel File Inspection Act, Seasonal Farm Labor Act, Construction Industry Employee Verification Act, and Workers’ Compensation Act, and the regulations expressed for each.

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Justice Department and National Labor Relations Board Announce Partnership to Protect Workers

Posted by National Alliance for Fair Contracting on

Department of Justice – Office of Public Affairs
Tuesday, July 26, 2022

Agencies Will Enhance Enforcement Efforts Through Greater Coordination and Information Sharing, Cross-Agency Training and Outreach

The Justice Department’s Antitrust Division and the National Labor Relations Board (NLRB) signed a memorandum of understanding (MOU) today to strengthen the partnership between the two agencies to better protect competitive labor markets and ensure that workers are able to freely exercise their rights under the labor laws. By strengthening their partnership, the agencies also achieve the objectives of the President’s Executive Order on Promoting Competition in the American Economy just days after the Order’s one-year anniversary.

“Protecting competition in labor markets is fundamental to the ability of workers to earn just rewards for their work, to live out the American dream, and to provide for their families,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “By cooperating more closely with our colleagues in the NLRB, we can share information on potential violations of the antitrust and labor laws, collaborate on new policies and ensure that workers are protected from collusion and unlawful employer behavior. As the department noted in the amicus brief we submitted in the NLRB’s recent Atlanta Opera matter, we support the Board’s ongoing efforts to update its guidance to ensure that workers are properly classified under the labor laws. Protecting the right of workers to earn a fair wage is core to the work of both our agencies, and it will continue to receive extraordinary vigilance from the Antitrust Division.”

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

Posted by National Alliance for Fair Contracting on

Jan. 6, 2022
Bloomberg Law

  • Agreement involves Labor Department, federal labor board
  • Effort targets cases involving misclassification, retaliation

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.

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U.S. DEPARTMENT OF LABOR AND NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS PARTNER TO PROTECT THE STATE’S WORKFORCE AND ENFORCE WAGE LAWS (NM)

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Agency: Wage and Hour Division
Date: February 11, 2020
Release Number: 20-21-DAL

ALBUQUERQUE, NM – The U.S. Department of Labor and the New Mexico Department of Workforce Solutions have signed a Memorandum of Understanding (MOU) to expand and improve the protection of New Mexico’s workforce, strengthen enforcement of wage laws and level the playing field for responsible employers.

The MOU will allow both organizations to work together to protect employee rights, defend law-abiding employers against unfair competition and maximize taxpayer resources.

“This agreement will help us better protect New Mexico’s workers and help the state’s employers understand wage laws and avoid costly non-compliance,” said Wage and Hour Division District Director Evelyn Sanchez in Albuquerque, New Mexico. “Working together, we can more effectively identify those employers that deliberately attempt to unfairly gain a competitive advantage over those that comply with the law.”

The agreement will help both agencies communicate and cooperate more effectively and efficiently in areas of common interest, including cross training staff and providing employers and employees with information about the law. By doing so, the two organizations seek to protect the wages, safety and health of America’s workforce.

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U.S. DEPARTMENT OF LABOR AND NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS PARTNER TO PROTECT THE STATE’S WORKFORCE AND ENFORCE WAGE LAWS (NM)

Posted by National Alliance for Fair Contracting on

Agency: Wage and Hour Division
Date: February 11, 2020
Release Number: 20-21-DAL

ALBUQUERQUE, NM – The U.S. Department of Labor and the New Mexico Department of Workforce Solutions have signed a Memorandum of Understanding (MOU) to expand and improve the protection of New Mexico’s workforce, strengthen enforcement of wage laws and level the playing field for responsible employers.

The MOU will allow both organizations to work together to protect employee rights, defend law-abiding employers against unfair competition and maximize taxpayer resources.

“This agreement will help us better protect New Mexico’s workers and help the state’s employers understand wage laws and avoid costly non-compliance,” said Wage and Hour Division District Director Evelyn Sanchez in Albuquerque, New Mexico. “Working together, we can more effectively identify those employers that deliberately attempt to unfairly gain a competitive advantage over those that comply with the law.”

The agreement will help both agencies communicate and cooperate more effectively and efficiently in areas of common interest, including cross training staff and providing employers and employees with information about the law. By doing so, the two organizations seek to protect the wages, safety and health of America’s workforce.

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Employers Misclassifying Workers Face Joint Federal/State Investigations

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Brian J. Hoffman, The Legal Intelligencer
November 22, 2016

Employers have often played “fast and loose” with regulations governing workforce classification, tempted by the significant savings associated with independent contractor treatment. As such, in August 2016, Pennsylvania became the 35th state to reach an agreement with federal authorities to coordinate inquiries and share enforcement data in wage and hour investigations.

The Pennsylvania Department of Labor and Industry (PA DOL) and the United States Department of Labor (“US DOL”) inked a Memorandum of Understanding which serves to facilitate the exchange of information during enforcement actions. Historically, a particular focus of both the US DOL and PA DOL has been the misclassification of employees as independent contractors. Previously, an investigation by the PA DOL or US DOL of an employer would NOT necessarily lead to a reciprocal investigation by the other party. Now, given the execution of the Memorandum of Understanding, employers should expect that a wage and hour investigation by one department will likely lead to an investigation by the other. As such, employers challenged on employment classification practices while under audit will likely see overall liabilities increase during any given inquiry, as both federal and state taxes and penalties will be imposed.

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US DEPARTMENT OF LABOR, PENNSYLVANIA DEPARTMENT OF LABOR & INDUSTRY SIGN AGREEMENT TO PROTECT WORKERS FROM MISCLASSIFICATION

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WHD News Brief: 08/04/2016
Release Number: 16-1603-NAT

Participants: U.S. Department of Labor’s Wage and Hour Division
Pennsylvania Department of Labor & Industry

Partnership description: The U.S. Department of Labor’s Wage and Hour Division and the Pennsylvania Department of Labor & Industry signed a three-year Memorandum of Understanding intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses. 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.

Background: The division is working with the U.S. Internal Revenue Service and 31 other U.S. states to combat employee misclassification and to ensure that workers get the wages, benefits and protections to which they are entitled. Labeling employees as something they are not – such as independent contractors – can deny them basic rights such as minimum wage, overtime and other benefits. Misclassification also improperly lowers tax revenues to federal and state governments, as create losses for state unemployment insurance and workers’ compensation funds.

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US DEPARTMENTS OF LABOR, HOUSING AND URBAN DEVELOPMENT SIGN PARTNERSHIP TO REDUCE EMPLOYEE MISCLASSIFICATION IN SIX WESTERN STATES

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MOU aligns federal departments in effort to ensure full pay, benefits for workers

 

WHD News Release: 08/22/2016
Release Number: 16-1726-DAL

DENVER – Officials from the U.S. Department of Labor and the U.S. Department of Housing and Urban Development signed a Memorandum of Understanding to help stop the misclassification of workers in Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming.

The first MOU of its kind represents a new effort on the part of the agencies to work together to protect employee rights and level the playing field for responsible employers by reducing the practice of misclassification.

In Fiscal Year 2015, the department’s Wage and Hour Division recovered more than $74 million in back wages for more than 102,000 workers in industries, such as janitorial, food, construction, daycare, hospitality and garment. The division regularly finds low-wage workers are victims of misclassification.

The agreement will help both agencies communicate and cooperate more effectively and efficiently in areas of common interest, including cross training staff and providing employers and employees with information about the law. By doing so, the two agencies seek to protect the wages, safety, and health of America’s workforce by sharing information.

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