Employers Take Note—Child Labor Violations Continue to Be Major DOL Focus

Earlier this year the Department of Labor’s (DOL) Wage and Hour Division (WHD) released statistics on its child labor enforcement activity for 2023. Astonishingly, WHD found an 88% increase since 2019 in the unlawful employment of minors. As we head into the summer months when many employers hire minors, companies should be mindful of the Fair Labor […]

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Earlier this year the Department of Labor’s (DOL) Wage and Hour Division (WHD) released statistics on its child labor enforcement activity for 2023. Astonishingly, WHD found an 88% increase since 2019 in the unlawful employment of minors. As we head into the summer months when many employers hire minors, companies should be mindful of the Fair Labor Standards Act’s (FLSA) restrictions on youth employment. Combating the unlawful employment of minors is one of WHD’s principal priorities, and there are several recent high-profile settlements with WHD across various industries that underscore that effort. All indications are that WHD will continue to be aggressive in its enforcement efforts.

Child Labor Divide

In general, the FLSA and its associated regulations divide child labor restrictions into two categories: agricultural and nonagricultural. For nonagricultural work, the DOL has issued 17 different hazardous occupation orders (HOs), which prohibit minors from holding certain positions or working with certain equipment out of concern that the work is too dangerous for minors. HO 3 bans minors from holding most positions in coal mining, and HO 5 prohibits minors from operating chain saws and similar power-driven woodworking equipment.

Additionally, the FLSA heavily restricts the hours and times of day that 14 and 15 years olds can work in nonagricultural positions. Minors of those ages cannot work more than three hours during the school day or more than eight hours on a non-school day. Minors under the age of 14 are prohibited from working in almost all cases. Employers should also be mindful that the FLSA sets the legal “floor” for youth employment restrictions but that individual states can impose more strenuous guardrails.

Penalties under the FLSA can be significant. Currently employers can be assessed up to $71,031 in civil money penalties if the violation results in the serious injury or death of a minor and up to $15,629 per child for all other violations. In addition, the DOL may ask a federal court to prevent the shipment and sale of goods produced at an establishment where a child labor violation occurred (referred to as “hot goods”) up to 30 days prior.

Hot Summer

As alluded to above, it’s common for employers to hire minors in the summer months when school isn’t in session. Many of these positions are in retail and hospitality, though lawful youth employment occurs across a variety of industries.

For this reason, the summer season is a good time of year for affected employers to retrain staff on the FLSA’s restrictions. Even unproven allegations of this nature can be incredibly damaging to a company’s reputation and business. This is even more important because in recent years the United States has experienced a surge in child labor trafficking primarily from Central America, where minors are trafficked into positions prohibited for anyone under 18 years of age though use of false documentation.

Priority Enforcement

Combatting child labor violations remains a principal priority of the WHD in 2024, and the division is becoming more aggressive with its enforcement efforts. In March, the DOL’s fiscal year (FY) 2025 budget proposal to Congress requested an additional $20.8 million dollars for WHD, in part to help fuel its child labor enforcement efforts. In an oversight hearing before the U.S. House of Representatives Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, Acting Secretary of Labor Julie Su stated that the money would be used to “increase boots on the ground, to increase the number of investigators in the field.”

In the last few weeks, the WHD reached several high-profile settlements with employers in the food production and manufacturing industries. For example, in May it announced a consent order and judgment (COJ) issued by the U.S. District Court for the Central District of California for child labor violations against the owners and operators of a poultry products company. The COJ included $171,919 in civil money penalties and disgorgement of $1 million in profits earned from the sale of goods tainted by child labor violations. Similarly, in March the WHD announced it obtained a COJ against Tuff Torq Corp., a manufacturer of power equipment parts, for child labor violations. Under the COJ issued by the U.S. District Court for the Eastern District of Tennessee, Tuff Torq was required to pay $296,951 in civil money penalties and $1.5 million in profits obtained related to the use of child labor.

Takeaway

Typically, the DOL won’t pursue disgorgement of profits in child labor cases, making these remedies unusual and aggressive. We are also likely to see the WHD seek to expand liability to companies based on violations in their supply chains through novel use of legal theories such as joint employer. Given the current environment, companies cannot afford to be anything less than hypervigilant regarding youth employment restrictions, including reviewing their employment verification practices and retraining their staffs.

Savanna L. Shuntich is an attorney with FortneyScott in Washington, D.C. You can reach her at sshuntich@fortneyscott.com.

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