With 4.5 million employees quitting their jobs and one of the lowest job participation rates in decades, employers are struggling to fill the over 10 million open jobs reported by the Bureau of Labor Statistics earlier this month. Yet, two stealth developments at the Department of Labor are poised to make that struggle even worse.
First, on Jan. 4, President Biden renominated David Weil to serve as administrator of the wage and hour division, the agency responsible for enforcing the minimum wage and overtime provisions of the Fair Labor Standards Act. Weil previously served in this position during the Obama administration and was nominated to reprise that performance in June 2021. His nomination stalled in the Senate, having failed to be voted favorably out of committee, but it’s now getting a do-over, with the Senate Health, Education, Labor & Pensions Committee again considering Weil’s nomination.
Second, the Labor Department quietly posted its enforcement statistics for the first year of the Biden administration. Last year, it recovered just $234.3 million in back wages. That is a decline of $23.5 million from 2020, when many businesses and Labor Department offices were closed due to the pandemic, and a decline of $98.2 million from the Trump administration’s record year in 2019. Weil fared no better during his previous tenure, as his high was $266.5 million in 2016 — less than every year in the Trump administration, including the lost year of 2020.
This poor performance in Democratic administrations may seem odd. Counterintuitive, but easily explicable. Under Democrats, instead of enforcing the law as written to protect low-wage workers from clear violations, the Labor Department prefers to engage in social activism.
For example, Weil doesn’t like independent contracting (IC). Contractors overwhelmingly supported the Trump administration’s IC rule (withdrawn by the Biden administration), and California voters rejected a strict IC test in 2020. Contractors want the financial independence and the flexibility of choosing when, where and how they work. The independent workforce increased by 34 percent in 2021, to 51.1 million workers, with 68 percent of newcomers from Gen Z and 55 percent women, according to MBO Partners. MBO Partners also reports that 87 percent of these workers are happier working independently, 78 percent say they are healthier, and nearly 30 percent reported annual earnings of over $100,000. Yet, with Weil at the helm, the Labor Department is likely to focus enforcement on ending independent contractor relationships, returning to his 2015 guidance concluding that “most workers are employees.”
Weil is also wrong about franchising, which he attacked in his book, “The Fissured Workplace,” as being responsible (with contracting) for lower wages, lack of health benefits, and diminished opportunities for upward advancement. In fact, independent franchise owners pay higher wages, offer health insurance at higher rates, and provide greater opportunity for advancement than other small businesses — and create 2.3 times as many jobs than their large corporate competitors. Weil published his book just weeks before taking over as the nation’s top FLSA enforcer in the Obama administration, and then spent his time at the Labor Department using the power of federal investigations attempting to prove his theories. After leaving, he furthered his academic career by claiming he saw violations caused by “fissuring” while at the Department of Labor. Coincidence?
Also on Weil’s hit list is the fossil fuel industry. This industry has among the highest percentage of private sector union membership and highest wages for blue collar workers. During his previous tenure, Weil led an initiative against that industry. A December 2014 press release, for example, bragged about a “multi-year initiative” in the Pennsylvania and West Virginia oil and gas industry: “The oil and gas industry is . . . ripe for noncompliance,” Weil stated. Given his disdain for the industry, we can expect increased scrutiny if Weil is confirmed. This would do nothing to protect low-wage workers, but instead turn regulatory power against an industry that already has high union membership and high wages.
In this labor market, now is not the time — and Weil is not the person to put in charge of FLSA enforcement.
Tammy McCutchen served as the administrator of the Labor Department’s Wage & Hour Division during the administration of President George W. Bush.