The US Labor Standards Enforcement System and Low-Wage Immigrants: Recommendations for Legislative and Administrative Reform

Abstract

Low-wage immigrants in the United States, particularly the 8 million unauthorized workers, suffer from widespread labor standards violations. Their protection represents a singular challenge for modestly-resourced federal and state regulators, particularly in an era of record immigration enforcement. Many employers hire the unauthorized, knowingly or unknowingly, because they cannot attract sufficient numbers of authorized workers. An enduring minority, however, prefer to employ unauthorized workers in order to suppress wages and working conditions and to gain an advantage over their competitors. Their business model depends on the exploitation of workers who are less likely to complain, organize or pursue other remedies for mistreatment. Exacerbating matters, the unauthorized work disproportionately in jobs to which certain labor standards do not apply, and they belong to labor unions at lower rates than the US workforce as a whole (Schmitt 2010). Employers, in turn, face intense competition and pressure to cut costs. In addition, intensive immigration enforcement can make employees more vulnerable to retaliation for exercising their rights and less likely to challenge abuses (Cho and Smith 2013). This paper analyzes labor standards enforcement in light of the challenges posed by bad-faith employers, the historically high population of low-wage immigrant laborers (particularly the unauthorized), and record spending on immigration enforcement. It draws from a comprehensive report titled Labor Standards Enforcement and Low-Wage Immigrants: Creating an Effective Enforcement System (Kerwin and McCabe 2011). The paper identifies gaps in protection in the legal and regulatory labor standards framework, with a particular focus on the US Department of Labor's (DOL's) Wage and Hour Division (WHD) which enforces the Fair Labor Standards Act (FLSA).1 It argues that labor standards should be strengthened and enforcement resources bolstered. However, it also recognizes that federal and state agencies will never be able to investigate, penalize, or monitor a significant share of the employers subject to their jurisdictions. Thus, it concludes that the overall goal of these agencies should be to deter violations and to maximize compliance with the law. To achieve these goals, regulators must be able to identify industries, sectors and firms with vulnerable workers; map the structures, relationships, and the distinct incentives of employers within these industries; and continuously evaluate the effectiveness of their enforcement strategies. WHD, in particular, needs to establish robust partnerships with other federal and state enforcement agencies, as well as with businesses, labor unions, and community-based organizations (CBOs) that enjoy direct access to low-wage immigrant workers. Status-blind enforcement and a coordinated response to the “misclassification” of employees as independent contractors must also be key priorities. In addition, a large-scale legalization program would strengthen the ability of immigrant workers to exercise and defend their rights.