Earlier this month, the U.S. Department of Labor’s Wage and Hour Division and the National Labor Relations Board announced a Memorandum of Understanding (MOU) described as “strengthening the agencies’ partnership and outlining procedures on information-sharing, joint investigations and enforcement activity, as well as training, education and community outreach.”
Most worrisome for employers, the agencies created a mechanism to share information and refer charges. This means that if an employee files an NLRB charge and the investigation reveals that there may also be wage and hour violations, the NLRB investigator will advise the employee of this potential violation and provide information on how to file a complaint with the Department of Labor’s Wage and Hour Division. The NLRB investigator may also directly “refer the case to the regional DOL/WHD office for investigation.”
A similar procedure exists for the Wage and Hour Division to refer charges to the NLRB, though they cannot refer directly as the NLRA requires a charge to be filed by an individual – the NLRB cannot investigate without a charge filed.
The partnership is unnerving for employers because it signals an enforcement change pushed by a pro-employee administration. The NLRB and Wage and Hour Division make clear in the MOU that their crosshairs are on misclassification of employees, both as independent contractors and in situations the agencies describe as “fissured employment structures.” The MOU broadly defines that term to include joint employment structures and seemingly any workplace structure that doesn’t involve direct employment.
This comes at a time when the NLRB has recently announced an intention to revisit its rules and legal standards on both joint employment and independent contractors. Employers can expect more charges or complaints filed against them if they are in front of either agency, and for that reason should take a close look at both their wage and hour practices and their labor law compliance as we head into this new era.