Donald Trump's incoming labor secretary could put hourly workers "at peril": Wage and hours chief

The Obama administration's new rules recovered $1.8 billion in back wages for 2 million workers

By Sophia Tesfaye

Senior Politics Editor

Published January 3, 2017 5:10PM (EST)

 (AP/Jack Plunkett)
(AP/Jack Plunkett)

In 2015, for the first time since before the Great Recession, median household income rose — 5.2 percent according to the Center on Budget and Policy Priorities. The poverty rate also ticked down to 13.5 percent in 2015, from 14.8 percent a year earlier. Meanwhile, the share of those without health insurance dropped below 10 percent, marking the first time all three measures have improved in nearly two decades, according to the Center on Budget and Policy Priorities. But with the incoming Trump administration set to take office in a few weeks, a leading Obama administration official is now warning that the Department of Labor will be "at peril" if it fails to enforce new rules that saw $1.8 billion in back wages paid to 2 million workers in recent years.

David Weil, the outgoing administrator of the Labor Department’s Wage and Hour Division, has offered perhaps the strongest warning of any Obama administration official aimed at the incoming Trump administration: Do not roll back protections for workers. Weil oversaw strategic enforcement initiatives that are now in limbo and could be withdrawn by a new administrator.

"What does making America great again mean?" Weil asked, expressing concern that Andy Puzder, the fast food executive President-elect Trump has nominated to be labor secretary, will undermine efforts to crack down on widespread wage violations.

"I would offer the interpretation that we went from the post-war period, when there were productivity increases, those increases went not only to the owners of capital, they also went to working people. That started to fall apart in the 1980s, and continued to erode for decades," Weil told the Houston Chronicle last month.

With incoming inequality on the rise and wage stagnation dragging the economy, Weil's wage and hour division went after the practice of misclassifying employees as independent contractors, which deprives workers of certain legal protections and benefits, and also shorts states on payroll tax income. The agency’s average yearly wage theft recoveries under Obama, adjusted for inflation, have been stronger than those during the George W. Bush years and Bill Clinton’s second term, which is as far back as the publicly available data go. During the 2016 fiscal year alone, the Labor Department found that 10,300 fast-food workers were owed more than $5.4 million in back wages.

“We’ve pretty much fundamentally changed the way we do enforcement,” Weil recently explained to the Huffington Post. “We have the largest impact we possibly can to help and protect the vulnerable workers that are out there.”

Weil's stricter enforcement has even targeted the company headed by Trump's pick to lead the Labor Department, Andy Puzder. The head of CKE Restaurants, which owns the Hardee’s and Carl’s Jr. burger chains, agreed to pay $58,000 in back pay to a group of 456 workers after a wage-and-hour investigation by the agency in 2006 and 2007.

But while Weil's reforms have helped recover millions in owed wages for workers, corporate CEOs have decried the new rules — including the CEO Trump tapped to enforce the country’s labor laws and hold unscrupulous employers accountable.

Puzder publicly opposed to the new overtime rule that gave the right to time and a half pay to millions of salaried employees earning less than $47,476 a year. The overtime rule "will simply add to the extensive regulatory maze the Obama Administration has imposed on employers, forcing many to offset increased labor expense by cutting costs elsewhere. In practice, this means reduced opportunities, bonuses, benefits, perks and promotions.” Puzder wrote in a 2014 Forbes op-ed.

The rule was scheduled to go into effect at the beginning of December but was blocked by a federal judge in Texas. Still, Walmart has already raised its managers’ pay, as did about half of all big retailers. If he becomes labor secretary, one of Puzder’s top responsibilities would be enforcing the overtime standard.

"If you define our mission as a fair day's pay for a fair day's work, I think we have updated the definition of a fair day's pay," Weil told the Chronicle.  "That was what the overtime rule was all about. The notion that Donald Trump won by fighting for workers — well, a lot of the workers who will be helped by the overtime rule are the ones that helped elect him president."

Weil said he is prepared to watch the new administration simply drop the Obama administration's appeal of the injunction in order to kill the rule.

"I obviously am concerned about things I hear,” Weil told the Guardian in an interview published Tuesday. Without mentioning Puzder by name, Weil said he "would expect as a base that any incoming secretary of labor understands there are certain principles about what this department does that are really sacrosanct – the notion of fairness embedded in our agency, paying people for the work they do, is something we support.”

Weil told the Guardian that he fears Trump and Puzder will cut the number of wage and hour investigators, which number only 1,000 in a country with 7.3 million business establishments, even though the current number of investigators is smaller than 40 years ago under Jimmy Carter.

“The president-elect campaigned to help a set of workers who felt they were left behind on the economy,” Weil said. “My agency helps a lot of people who were left behind. A certain part of the job requires a responsible use of your resources.”

He also noted that Puzder is a big opponent of raising the minimum wage. “It’s absurd – we’re almost in 2017 and the federal minimum wage is just $7.25 an hour,” he said. “I think the pressure will continue to raise it,” Weil said. For his part, Puzder argued in August, “If you give [workers] a raise to $15 dollars, you lose about $6,000 dollars per employee. So you actually go from a situation where your, you’ve got a business that can survive and that has economic strength to a business that you really can’t run; you really can’t hire people, so, and you can’t offset these costs of this magnitude with pricing, even if there was meaningful inflation, which we don’t have.”

After January 20, Weil will go back to his old post at Boston University and look for ways to continue the work he did at the Department of Labor. Weil has also pledged to publicly fight the Labor Department under Trump if it moves against workers.

"We got closer to an aspect that we should aspire to attain again. Working people work very hard every day, and until this last year, didn't recover their share of those benefits," Weil told the Guardian. "It's unclear to me whether this president-elect is really going to be consistent with what he says, and make sure that happens in the future."

In another interview with  Bloomberg, Weil acknowledged that “One can have a different balance of enforcement versus guidance and compliance, and certainly over the history of this agency and this department, that has varied across party lines.” But a new administration would be “at peril” if it thought the job could be done by guidance and partnership with corporations alone. “Enforcement remains an important part of anyone’s toolbox because there are irresponsible employers out there,” he explained.

“If they do things that are attempts to just undermine the department’s mission, I think that is something they should be called on,” Weil said of the incoming administration. “[A]nd if they fail to hold to that standard, they should be held accountable.”

By Sophia Tesfaye

Sophia Tesfaye is Salon's senior editor for news and politics, and resides in Washington, D.C. You can find her on Twitter at @SophiaTesfaye.

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