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Labor Perspective: Trump's Labor Department ‘Walks Away From Wage Theft’

Published Monday, July 6, 2020
by Michael Felsen Via The Hill
Labor Perspective: Trump's Labor Department ‘Walks Away From Wage Theft’

Once again, the Trump Administration is showing Workers in the U.S. the back of its hand.

As if going AWOL on Workplace Safety in the face of the Coronavirus Pandemic wasn’t enough, now the Trump Administration's Labor Department has decided to tell employers not to worry too much about paying their employees properly.

It telegraphed that message when it stripped away an effective Obama-era enforcement tool designed to catalyze employers to comply with this country’s Wage and Hour Laws.

Wage theft in the U.S. is not an imaginary problem.

Yes, there are lots of law-abiding employers in this country, but studies have shown that Workers - especially those on the lowest end of the pay scale - are annually cheated out of billions of dollars of pay they’re entitled to under Federal Law.

It’s the Labor Department’s job to ensure that doesn’t happen.

It’s a hard job and the Trump Administration just made it a lot harder.

The Law that applies here is the Fair Labor Standards Act (FLSA).

Passed in 1938, among other things it requires employers to pay their workers at least the prescribed Federal Minimum Wage (currently a meager $7.25 per hour) and time and a half the Workers’ regular rate for all hours over 40 in a week.

It also provides that employers who fail to pay according to these basic mandates face consequences.

Specifically, an employer who fails to pay a Worker their proper Minimum Wage or overtime “shall be liable” to the employee for the unpaid wages, “and an additional equal amount as liquidated damages.” 

In other words, if you violate the law, you must pay the Worker double the amount you shorted them.

Since a crucial goal of the statute is to induce employers to comply with its mandates, this makes a lot of sense.

Employers who are inclined to cut corners and avoid the Law’s requirements need a reason to comply.

Knowing they’ll be obligated to pay double when they violate the law provides such an incentive.

Conversely, being required to pay only the back wages owed provides no compliance motivation at all.

In fact, if that’s the only consequence for employers who pay their workers improperly, they’ve effectively obtained an interest-free loan - on the backs of their Employees.  

As of July 1st, under the Trump team’s latest “deregulatory” act, that’s precisely the gift employers who cheat their Workers out of the pay they’ve earned will receive.

We’re not talking here about employers who made a serious, good faith effort to comply with the Law, reasonably thought they were complying, but made an innocent mistake.

Those employers have never had to pay double.

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