Even as the Department of Labor (DOL) and Internal Revenue Service (IRS) begin scouring workplace records for the improper classification of employees as independent contractors, Congress is weighing in with patches to the Fair Labor Standards Act (FLSA) to put some bite behind the bark.

Senator Sherrod Brown, D.-Ohio, has introduced the Employee Misclassification Protection Act (EMPA), which amends the FLSA to require employees to notify newly hired independent contractors in writing of their status.

The law would require employers to retain a record of each notification and specifies that the absence of this record immediately makes the contractor a regular employee of the company. The bill also comes packed with a set of fines and other consequences.

The legislation follows last year’s introduction by Senator John Kerry, D.-Massachusetts, of the Taxpayer Responsibility, Accountability and Consistency Act (TRAC?), which would remove the safe harbor provision of the Revenue Act of 1978 regarding employee misclassification.

DOL Secretary Hilda Solis immediately hailed the EMPA for addressing "this significant and troubling issue" of worker misclassification.

Thus far the DOL under Secretary Solis has targeted interns, independent contractors and non-exempt employees who are misclassified and not paid overtime as the focus of their wage and hour enforcement.

Employers, don’t fly by the seat of your pants in this important area of worker classification. If you get it wrong, you could be subject to back overtime wages and other penalties. Get yourself a copy of Personnel Concepts’ FLSA Overtime Rules Compliance Kit and ensure your employees are classified and paid correctly.

Taking the stage in Chicago at what was once Jane Addams’ Hull House, where FDR Labor Secretary Frances Perkins got started, Obama Labor Secretary Hilda Solis launched a nationwide public awareness program called "We Can Help" on April 1.

"I have a message for those employers who break this nation’s labor laws and prey on vulnerable workers: It ends today," she said in her self-announced role as "the new sheriff in town." 

The new "We Can Help" campaign is essentially a public-relations effort to remind workers—particularly those in construction, hotels/motels, the food service industry and home healthcare—that the Labor Department exists to protect workers, not employers.

"This sheriff believes that workplace enforcement is not only our responsibility, but it is our moral obligation," Solis said, noting that she has increased enforcement staff in all of the Labor Department’s agencies, including 250 new field investigators for the Wage and Hour Division. "If someone is stealing your wages, you can and should call the Department of Labor," she said.

Employers, a good guide for staying in compliance with the Fair Labor Standards Act (FLSA) is to get a copy of Personnel Concepts’ FLSA Overtime Rules Compliance Kit. The kit will help you properly classify–and then pay–your workforce, while keeping the new sheriff and her posse from your doorstep.

The Department of Labor (DOL) is launching a Wage and Hour (WHD) investigation of Denver area restaurants for compliance with overtime pay, working hours, and child labor, according to the local DOL office.

Chad Frasier, district director for the Wage and Hour Division in Denver, says that the restaurant industry has been targeted because of past performance by similar businesses.

"The industry typically pays relatively low wages and employs workers who may not be aware of their rights under the FLSA, or how to complain when those rights are violated," he said. "Many of them are recent immigrants to this country and may not speak English; some of them are simply young and new to the workforce."

The goal, according to Frasier, is as much to inform restaurant owners of the standards they must maintain as it is to redress back pay issues.

Over the next year, the initiative "will seek to bring employers into compliance for the future and get back wages paid to workers where they are found due," said Frasier. "Even those workers who do not receive back wages will benefit by having a more informed employer and being more informed themselves."

Typically, small businesses without fully developed human resource capacities can run afoul of the Fair Labor Standards Act (FLSA), which covers such standards as minimum wage, overtime and child labor.

Even larger businesses often misclassify their employers and end up being slapped with past-due overtime bills once the WHD gets alerted and begins proceedings.

Stay clear of WHD fines and legal actions by getting a copy and following the advice in Personnel Concepts’  FLSA Overtime Rules Compliance Kit.

Testifying before a House subcommittee, Department of Labor (DOL) Secretary Hilda Solis recently detailed plans for fiscal 2011 to use $1.7 billion out of a budget of $116.5 billion, along with 10,957 employees out of 17,800 total, for what she called "worker protection activities."

Plans also call for adding another 90 inspectors to the Wage and Hour Division (WHD) after the addition of 250 in fiscal 2010. WHD inspectors check out employee claims of unpaid overtime, minimum wage violations and other wage disputes.

Along with the Internal Revenue Service (IRS), which is auditing 6,000 businesses in the next three years over the misclassification of employees, DOL agents also will be looking for cases of employers labeling employees independent contractors to avoid their share of payroll taxes (as well as paying benefits).

Another trap: Employers often misclassify employees as exempt when in fact they are non-exempt and subject to overtime pay. Avoid this trap by getting a copy of Personnel Concepts’ FLSA Overtime Rules Compliance Kit and then properly classifying–and paying–your employees.

The Office of Federal Contract Compliance Programs (OFCCP) is receiving a 33-percent budget increase for fiscal 2011 and will use the money to hire 213 new compliance officers and launch a more rigorous enforcement program.

The OFCCP is tasked with monitoring compliance with federal labor laws and regulations by contractors working on federal government contracts.

In announcing its "unprecedented initiative," the OFCCP said it will increase monitoring of contractors’ self-audit obligations and also will target two industries for random audits. It will then re-audit the two industries in fiscal 2013 to evaluate recidivism rates (to see if they’re back-sliding).

The agency will also vigorously pursue affirmative action and fair pay violations by contractors in accordance with President Obama’s vow in the State of the Union Address to "crack down on violations of equal pay laws." As part of that effort, the OFCCP plans to update its regulations to strengthen affirmative action requirements for covered veterans, for individuals with disabilities, and for construction workers.

Contractors, a good way to start on ensuring your full compliance is by posting mandated OFCCD notifications at all your work sites. Get your copy of Personnel Concepts’ All-In-One Federal Contracts Poster today.

The Department of Labor (DOL) has released its agenda for the coming year, and it has a few surprises to spring on American business.

First (for discussion’s sake), the DOL wants each paycheck to come with a stub or explanation of hours worked, overtime paid and everything else that went into the computation of the amount.

Next, it’s eyeing the resurrection of the ergonomics standard that was rejected early in this decade, and with David Michaels now firmly in charge of OSHA, that standard should be forthcoming.

The 2010 agenda includes a new standard for combustible dust as well.

Finally, the retired Beck Poster will be replaced by one with Barack Obama’s interpretation of workers’ rights on it (you know, join a union now).

Full details here.

We’ve just posted a new white paper in that section on the Personnel Concepts new Web site entitled “Popular Misconceptions,” in which we examine the ingenious ways that employers seek to stay off the overtime-pay radar of the Department of Labor (DOL).

Let’s look at one of those methods: Say Employer A sends 20 hourly employees to training on a Saturday. He calls it “voluntary,” but the employees sense that they’d better go or suffer the consequences.

Calling it “voluntary” and “off the clock,” Business A Head Owner Guy says he doesn’t have to pay overtime for the extra day of work beyond 40 hours that week.

What does the FLSA (Fair Labor Standards Act) and DOL say?

Wrong! Since the employees felt pressure to attend, and since the benefits of their attending fell mainly on the company, all 20 of them deserve time-and-a-half for the training.

Let’s put it this way: About the only way an employer can send employees to training and avoid paying them is to say something like, “Okay, go study whatever you like this weekend and I’ll pay for it.” The workers head off to yoga, meditation, screenwriting and start-your-own-business classes voluntarily and without benefit primarily to the company. Since Head Boss is a Nice Guy, he doesn’t have to pay them overtime.

For more information, check out the white paper.