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Labor Agency Seeks More Wage Information for Employees

December 7, 2009
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Companies would have to provide more detailed information about compensation to employees under a regulation that the Department of Labor will propose next year.

In releasing the agency’s regulatory agenda on Monday, December 7, Secretary of Labor Hilda Solis put a high priority on wage-and-hour enforcement.

“In these difficult times, American workers deserve to be paid every cent that they earn on the job,” Solis said in an online video. “It’s an issue of transparency.”

The department will require employers to increase the amount of information they provide to employees about the hours they work, the amount they’re paid and the overtime they’ve earned.

The rule would “update decades old record-keeping regulations in order to enhance the transparency and disclosure to workers as to how their wages are computed and to allow for new workplace practices such as telework and flexiplace arrangements,” the department said in a statement.

The regulation is slated to be circulated in August. In an online exchange with the media and public, Solis said that compliance costs for companies would not be determined until the rule is drafted.

Large employers, particularly those who have employees in many states, may not feel too much of an impact, according to Noah Finkel, a partner at Seyfarth Shaw in Chicago, because they’re providing a lot of wage information.

“This will federalize what they’re doing already,” Finkel said. “The key is how our midsized and smaller employers will respond to this regulation, especially those who don’t use payroll vendors like ADP.”

In her video statement, Solis said that the record-keeping rule and other parts of the regulatory agenda will not burden employers, but rather will “help level the playing field for businesses that play by the rules.”

Much will depend on how the regulation is written and the penalties that are applied, Finkel said. California, which already has stringent reporting requirements, may serve as a model. There has been an increase of “gotcha litigation” revolving around pay statements.

“Enterprising plaintiff’s lawyers are becoming a thorn in employers’ sides,” Finkel said.

The wage record-keeping rule is one of 90 regulations that the department will be proposing. It outlined 12 “specific strategic outcomes” it is seeking with the package.

They include “increasing workers’ incomes and narrowing wage and income inequality”; “securing safe and healthy workplaces, wages and overtime, particularly in high-risk industries”; “assuring skills and knowledge that prepare workers to succeed in a knowledge-based economy”; “helping workers who are in low-wage jobs or out of the labor market find a path into middle-class jobs”; and “ensuring workers have a voice in the workplace.”

Facilitating unionization is the point of another rule that will be proposed. The Office of Labor-Management Standards will draft a regulation requiring greater disclosure by employers of consultants that they hire to advise them on union organizing campaigns.

“When workers or union members have more information about what arrangements have been made by their employer to persuade them whether or not to join a union, this information helps them make more informed choices and acts to level the labor-management relations playing field,” the department said in a statement.

—Mark Schoeff Jr.

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