With help from Ian Kullgren, Andrew Hanna and Timothy Noah
DOL WAGE-THEFT PROGRAM: Labor Secretary Alexander Acosta announced Tuesday that the Labor Department was preparing a six-month pilot program to encourage companies to hand over voluntarily back pay that they owe workers. The Payroll Audit Independent Determination program — or PAID — would indemnify employers if they came forward of their own accord and paid up.
Testifying before a House Appropriations labor subcommittee, Acosta said the program “will help ensure employees receive back wages they are owed, faster.” Participating employees will forfeit their right to sue to recover the money, but, DOL argues, they won’t have to pay attorney’s fees. Employers tied up in litigation or under investigation by DOL’s Wage and Hour Division won’t be eligible to participate, and employers who do participate won’t be permitted to do so more than once. The indemnification is meant to incentivize employers to pay the wages they owe. Proponents say businesses will jump at the opportunity to settle up without the threat of a lawsuit.
But employers can’t be trusted to hand over back pay now, even after litigation or administrative action finds them at fault, as POLITICO’s Marianne LeVine demonstrated in a wage-theft investigation published in February. Working off survey data for 15 states — the other states were unwilling or unable to provide the necessary information, or (in the case of six southern states) had no wage-theft enforcement mechanism at all — LeVine found that fully 41 percent of the wages that employers were ordered to pay workers was never recovered. The federal Labor Department had a higher recovery rate, but was much more selective about which wage-theft cases it would investigate.
Given that lax wage and hour enforcement nationwide renders minimum wage and overtime compliance very nearly voluntary, it isn’t clear why bosses should tremble at the thought of getting sued by (typically low-wage) workers. DOL’s fact sheet says participating employers could avoid the threat of paying additional penalties or damages, but these are difficult to impose in wage-theft cases. As a consequence, workers typically have a hard time interesting lawyers in pursuing wage-theft cases on contingency.
Business and labor backers were split over the new initiative. Tammy McCutchen, a former Wage and Hour administrator under President George W. Bush who now works at the management-side law firm Littler Mendelson, said employers will appreciate the chance to seek assistance from DOL. “I’m going to have clients lining up to do this,” she said. But Judy Conti, federal advocacy coordinator for the National Employment Law Project, told the Wall Street Journal “it’s a get out of jail free card for employers.” Read more from the Wall Street Journal’s Eric Morath here and a DOL fact sheet here.
GOOD MORNING! It's Wednesday, March 7, and this is Morning Shift, POLITICO's daily tipsheet on employment and immigration policy. Send tips, exclusives and suggestions to firstname.lastname@example.org, email@example.com, firstname.lastname@example.org and email@example.com. Follow us on Twitter at @tedhesson, @AndrewBHanna, @IanKullgren and @TimothyNoah1.
Trump, Acosta at Latino event: President Donald Trump will speak at an annual legislative summit hosted by the business-centered Latino Coalition. Helen Aguirre Ferre, White House director of media affairs, said Trump’s economic achievements (the Republican tax reform bill and low levels of unemployment) “are of great interest to the Hispanic community.” Trump is scheduled to speak at noon. Acosta will participate in an 8 a.m. session. Find more info here and watch a livestream here.
NLRB nominee vote: The Senate HELP Committee will vote today on management-side attorney John Ring’s nomination to the NLRB. The vote will likely break along partisan lines. Chairman Lamar Alexander (R-Tenn.) lauded Ring’s qualifications at a confirmation hearing last week, while Ranking Member Patty Murray (D-Wash.) ripped the nominee for “representing the interests of companies, not workers.”
Ring’s nomination has been colored by a scandal outside his control. In late February, the NLRB vacated a pro-business joint employment decision after questions arose about a conflict of interest affecting board member William Emanuel. At his confirmation hearing last week, Ring pledged to provide Congress with a list of cases that involved his management-side law firm, Morgan Lewis. The time and location of the vote haven’t been announced. Find more info here.
HSGAC considers authorization bill: The Senate Homeland Security and Governmental Affairs Committee will resume consideration of a DHS authorization bill, H.R. 2825 (115). The committee meets at 10 a.m. in Dirksen 342. Watch a livestream here.
** Our readers depend on Morning Shift to get the up-to-date insights they need to act. To engage with our select audience, contact firstname.lastname@example.org for advertising opportunities. **
PUZDER TO REPLACE COHN?: The White House is considering former fast-food executive Andrew Puzder as a possible replacement for outgoing chief economic adviser Gary Cohn, according to a Tuesday evening tweet by Rebecca Ballhaus, a White House reporter for the Wall Street Journal. (The Journal itself reported that Puzder was under consideration about an hour later, in a story to which Ballhaus contributed.)
To review: Trump nominated Puzder in December 2016 to become Labor secretary, a business-minded choice to helm the department. But Puzder’s support among Senate Republicans cratered after POLITICO unearthed a 1990 videotape of his ex-wife airing allegations of domestic abuse on “The Oprah Winfrey Show.” Puzder denies the allegations of abuse, and the ex-wife, Lisa Fierstein, eventually retracted the allegations as part of a child-custody agreement. Fierstein said she’d leveled the charges only to leverage a better divorce settlement, but in her Oprah appearance, Fierstein had appeared in disguise and under an assumed name — making it hard to see how going on television could have affected any court proceeding.
Matthew Haller, a senior vice president of the International Franchise Association, told Morning Shift that Puzder would “be a great choice” to take Cohn’s place as director of National Economic Council. “He’s spent a lot of time promoting the economic accomplishments of the administration on the WSJ editorial page and on TV since stepping back from the DOL nomination,” Haller said. “He has a great feel for the impact of public policy on employers and employees and how to generate and sustain the economic growth from deregulation and tax reform.”
Whether Puzder would want the job is another question. A source close to the former executive told Morning Shift he’s said privately that he’s no longer interested in a Trump administration position. As of 9:30 p.m. Tuesday evening, Puzder hadn’t heard from the White House. More from the Journal here.
DOJ SUES CALIFORNIA OVER ‘SANCTUARY’ LAW: “After more than a year on defense against a flurry of legal challenges to [Trump’s] immigration policies, the Justice Department is going on offense, filing a suit against the State of California that alleges obstruction of federal immigration enforcement,” POLITICO’s Josh Gerstein reports.
The lawsuit, filed in a Sacramento federal court Tuesday evening, “targets three sanctuary-focused laws that the California Legislature passed last year as part of a backlash against Trump’s vows to step up immigration enforcement,” writes Gerstein. “The litigation is modeled on a suit the Obama administration filed in 2010 against a controversial state law in Arizona that sought to crack down on illegal immigrants, SB 1070. That case resulted in a Supreme Court ruling that found that some provisions of the Arizona law unconstitutionally intruded into Congress’ right to set federal immigration policy.”
Sessions will speak in Sacramento today at 11:05 a.m. ET (8:05 a.m. PT) at the Kimpton Sawyer Hotel. California Gov. Jerry Brown (D) dismissed the attorney general’s visit in a tweet Tuesday. "At a time of unprecedented political turmoil, Jeff Sessions has come to California to further divide and polarize America,” he wrote. “Jeff, these political stunts may be the norm in Washington, but they don’t work here. SAD!!!" Read more from POLITICO here and the complaint here. Watch a livestream of Sessions here.
WEST VIRGINIA TEACHERS STRIKE ENDS: West Virginia teachers and Gov. Jim Justice (R) reached a deal Tuesday raising pay for all state employees, including teachers, by 5 percent, POLITICO’s Kimberly Hefling reports. The agreement brings an end to a strike that has shuttered public schools since Feb. 22.
“Justice announced the deal had been struck earlier in the day, sending it to the GOP-controlled House and Senate,” writes Hefling. “Both chambers unanimously approved increases spelled out in the agreement, which was praised by union leaders from the American Federation of Teachers-West Virginia and the West Virginia Education Association.”
UMWA President Cecil Roberts said the teachers “inspired working families throughout our state and across America.” The deal, however, does not address skyrocketing health premiums, one of the issues that sparked the protests in the first place. More here.
FLAKE’S ‘DREAMER’ FIX BLOCKED: A bill from Sen. Jeff Flake (R-Ariz.) that would extend the DACA program for three years in exchange for $7.6 billion in border security over the same period failed to advance to a vote in the Senate on Tuesday, Dan Nowicki reports in the Arizona Republic. To bring the measure, S. 2464 (115), to a vote, Flake needed agreement from all other senators — a tall order on a contentious topic.
Sen. James Lankford (R-Okla.) objected to the stopgap solution. "If Congress does a temporary patch once, it'll do it 20 times again," Lankford said. "My concern is for the DACA kids that are in my state in Oklahoma, the 7,500 of those. They are looking for an actual solution. They want a sense of permanence. Their status has been in limbo since 2012. The question that we need to resolve is: Can we actually resolve this for them?"
Flake argued his temporary solution wasn’t ideal, but was the best path forward at the moment. “What we cannot do is force these kids through more uncertainty,” he said. Flake has vowed to continue pushing for the short-term bill until Congress finds an answer. More from the Arizona Republic here.
ACOSTA TAKES FIRE OVER TIPS: Rep. Rosa DeLauro (D-Conn.) railed at Labor Secretary Alexander Acosta over DOL’s proposed tip-pooling rule during a House Appropriations subcommittee hearing Tuesday on the DOL budget. DeLauro lit into the Labor secretary again and again, saying the rule (which would rescind Obama-era regulations preventing employers from redistributing tips to back-of-house-employees) would lead to widespread wage theft. She also questioned him about reports that DOL suppressed an economic analysis of the proposed rule that said it would transfer billions from workers to employers.
DeLauro asked Acosta why the tip-pooling regulation didn’t explicitly bar wage theft; he answered that he’d "fully support a provision that says establishments should not be permitted to keep any portion of a tip." Subcommittee Chairman Tom Cole (R-Okla.) said he would, too.
Acosta, who’s usually cucumber-cool, was clearly agitated by Democrats’ aggressive questioning. But he didn’t crack. The only real hiccup came when Rep. Katherine Clark (D-Conn.) pressed Acosta on an earlier promise that he would never eat at a restaurant known to have stolen tips. How would he even know, she asked? Acosta said he reads a lot of Yelp reviews.
DELAYS TO H-1B FAST-TRACK: “Officials with the U.S. Citizenship and Immigration Services indicated that the agency will temporarily delay the ability to fast-track certain H-1B applications this year,” Trisha Thadani reports for the San Francisco Chronicle, citing multiple attorneys. The premium processing service allows businesses to have an H-1B petition for a high-skilled worker considered within 15 calendar days if they pay a $1,225 fee; otherwise, the wait can last months. USCIS spokesman Carter Langston said the delay will apply to fiscal year 2019 petitions subject to the annual visa cap. The agency previously paused fast-track processing in April (ostensibly to reduce overall H-1B processing times) and gradually resumed the service over a six-month period. Read more here.
OUTSOURCERS CHANGE THEIR APPROACH: “The [Trump] administration’s tough stance on work visas is flipping the dynamics of the Indian IT industry,” Itika Sharma Punit reports in Quartz. “The sector, among India’s top employment generators until some years ago, has been laying off employees in bulk at home. Yet, in the US — its main market, where it has been battling to secure visas for its Indian tech workers — it is hiring more locals than ever before.”
Quartz points to an announcement Tuesday from the India-based Infosys, which said it hired 2,500 U.S. workers in the past year. Infosys “also announced the launch of an innovation hub in Indianapolis, where it will train, up-skill, and re-skill employees according to its business requirements,” the outlet reports. “In May 2017, the company had said it would hire 10,000 American techies over two years.” Read more from Quartz here and the announcement here.
IMMIGRANTS AVOID PUBLIC BENEFITS: Immigrants who aim to obtain permanent residence are avoiding public nutrition programs over the fear that accepting assistance could jeopardize future green-card applications — even if such regulations aren’t yet in place, Emily Baumgaertner reports in the New York Times.
“Statistics on participation in state and local efforts show fewer people are using an array of food programs, including the Supplemental Nutrition Program for Women, Infants and Children (called WIC) as well as the Supplemental Nutrition Assistance Program (or SNAP, formerly known as food stamps) and food banks,” the Times reports. More here.
EPI UPDATES FAMILY BUDGET TOOL: The left-leaning Economic Policy Institute updated its Family Budget Calculator Tuesday to reflect recent economic data. The tool allows users to find out the cost of living for families of varying sizes across 611 metro areas. View it here.