Wage & Hour Division: Right To Know Rule

Previously DOL's Wage and Hour Division announced plans to update recordkeeping requirements that are associated with the Fair Labor Standards Act.  The DOL stated that it “proposes to update the recordkeeping regulations under the Fair Labor Standards Act in order to enhance the transparency and disclosure to workers of their status as the employer's employee or some other status, such as an independent contractor, and if an employee, how their pay is computed.”  

Identified as the "Right to Know" rule, the DOL’s original timeline for the regulation was October 2011.   In the most recent edition of the Unified Regulatory Agenda, published on January 20, 2012, the DOL moved the “Right to Know” rules into a category labeled “Long Term Actions.” The DOL defines “Long Term Actions” as those items “under development but which the agency does not expect to have a regulatory action within the 12 months after publication of this edition of the Unified Agenda.” That initially put off any action on the Right To Know until at least January 2013.

With the re-election of Obama, the "Right to Know" rules are expected to re-emerge as a major issue to workers and we can now expect the department to move forward once again on this proposal.

Under the FLSA, employees are entitled to overtime unless they're executives who manage, hire and fire employees; administrators who make key decisions; or professionals with advanced degrees, among other criteria.  (Also exempt are IT workers and sales representatives.)  Rank and file employees are commonly and wrongly classified as exempt.   These low-level employees, with limited responsibilities, are dressed up to look like managers so that employers don't have to pay for overtime.   U.S. workers are putting in more than 40 hours per week through a variety of practices including:

• Jobs misclassified as exempt;
• Smartphones and other technology allowing business to bleed into personal time; and,
• Employees working off the clock.

Acting Wage and Hour Administrator Nancy Leppink called the Right to Know rule one of the Wage and Hour Division's priorities, stating "We're continuing to work on that regulation," and that "We're learning about what the issues are" from the Department's ongoing misclassification enforcement initiative.

A record-high 7,064 FLSA suits were filed in federal court during the year-long period ending March 31st.  The WHD reported that over $225 million in back wages for FLSA violations were collected during this period.   These numbers provide reinforcement for the belief that FLSA claims will continue to gain momentum into 2013 and beyond.  

Employers know that FLSA collective actions are more prevalent than ever and they are costly to defend or resolve.  With the majority of the lawsuits pertaining to employee misclassification, it's an incentive to the employer to carefully review how employees are classified.