DOL Prioritizes Enforcement of Youth Employment Laws

The U.S. Department of Labor (DOL) oversees and enforces federal youth employment laws through the Fair Labor Standards Act (FLSA). The FLSA prohibits organizations from employing “any oppressive child labor in commerce or in the production of goods for commerce or in any enterprise engaged in commerce or in the production of goods for commerce.” Employers that fail to comply with federal youth employment laws can be subject to costly investigations and penalties. In recent years, the DOL has prioritized the enforcement of youth employment laws, reiterating its commitment to combating illegal child labor by using all appropriate enforcement tools. For example, in fiscal year 2023, the DOL’s Wage and Hour Division (WHD) concluded 955 investigations that found child labor violations, representing a 14% increase from the previous year. The agency found nearly 5,800 children employed in violation of the law, an 88% increase since 2019, and assessed more than $8 million in penalties, an 83% increase from the previous year. Employers hiring youth-aged workers should take steps to ensure compliance with federal youth employment laws to avoid costly consequences and ensure youth workers have a safe and beneficial experience.

Action Steps

The DOL has recently taken several steps to reduce instances of child labor violations and better hold employers accountable. This Compliance Bulletin provides a broad overview of FLSA youth employment laws, summarizes the DOL’s recent increased enforcement efforts and outlines steps employers may take to mitigate the risk of violating federal child labor protections

Overview of Federal Youth Employment Laws

The FLSA establishes federal youth employment regulations and protections. The WHD administers and enforces youth employment regulations under the FLSA. The FLSA protects most minors employed in the United States. These laws help to ensure that minors work in safer occupations that do not endanger their well-being or educational opportunities. The FLSA imposes restrictions on employers employing minors, including the minimum age for employment, permissible work activities and limitations on the work hours for individuals under 18 years old. The FLSA also sets the minimum wage for employment and subminimum wage standards for certain employees who are less than 20 years of age, full-time students, student learners, apprentices and workers with disabilities.

Federal youth employment regulations do not:

·         Require minors to obtain “working papers” or “work permits”;

·         Restrict the number of hours or times of day that workers 16 years of age and older may be employed;

·         Apply where no FLSA employment relationship exists;

·         Regulate or require such things as breaks, meal periods or fringe benefits; and

·         Regulate such issues as discrimination, harassment, verbal or physical abuse, or morality.

In addition to the FLSA, states can implement their own laws governing the employment of minors. When both federal and state regulations apply to youth workers, the law with the stricter standard must be followed.

Increased Enforcement Efforts

According to the federal government, child labor exploitation is rising in the United States. Between 2018 and 2022, the DOL has seen a 69% increase in children being employed illegally. In response, the DOL has recently taken several steps to reduce child labor violations and hold employers accountable. These measures include creating a DOL-led interagency task force to combat child labor violations, issuing new guidance to clarify when and how agency officers should evoke the “hot goods” provisions of the FLSA’s child labor laws, and increasing civil money penalties (CMPs) for violations.

Creation of an Interagency Child Labor Task Force

On Feb. 27, 2023, the DOL and the U.S. Department of Health and Human Services (HHS) announced the creation of a new interagency child labor task force, which applies a whole-of-government approach to enhance federal efforts to protect children from exploitative situations. The DOL-led Interagency Task Force to Combat Child Labor Exploitation furthers collaboration and improves information-sharing among agencies, including the HHS and Departments of Agriculture, Commerce, Education, Homeland Security, Justice and State. These departments are making concrete efforts to improve cross-training, outreach, education and health outcomes of children who could be subject to child labor. In addition, the task force uses data-driven strategies to initiate investigations that are likely to uncover children employed in violation of the child labor provisions, using all available enforcement tools, including injunctions to stop the movement of goods made with child labor (hot goods actions), to hold employers accountable for those violations and deter future violations. Since the launch of these enhanced efforts, enforcement of child labor laws has increased. For example, between Oct. 1, 2022, and July 20, 2023, the WHD concluded 765 child labor cases, finding 4,474 children employed in violation of federal child labor laws and assessing employers with more than $6.6 million in penalties. This represented a 44% increase in findings of federal child labor violations and an 87% increase in penalties assessed compared to the same period in the previous fiscal year. Additionally, in July 2023, the DOL announced it intended to pursue the more than 700 open child labor cases, demonstrating the agency’s commitment to addressing child labor violations more aggressively than in the past. To help with these efforts, the DOL requested increased funding for its enforcement agencies and asked Congress to increase CMPs for child labor violations

Guidance on Hot Goods Provision Under the FLSA

On Aug. 31, 2023, the DOL published Field Assistance Bulletin (FAB) 2023-03 to clarify when and how agency officers should evoke the “hot goods” provision of the FLSA’s child labor laws. While FABs are not necessarily legally binding, they offer insight into how the DOL interprets labor and employment laws and how agency officers will analyze workplace conditions and circumstances to enforce compliance.

As part of its enforcement authority, the DOL can prohibit businesses from shipping hot goods, which are goods that were produced “in an establishment in or about which oppressive child labor occurred.” If oppressive child labor occurs, the goods produced in or about that establishment are considered “hot,” regardless of whether the children in question worked directly on the goods. Hot goods are barred from interstate commerce under the FLSA, and the DOL can request that businesses voluntarily refrain from shipping the goods until the child labor violation is remedied. The DOL also has the authority to seek injunctions or restraining orders against employers that do not voluntarily withhold goods from shipment. The prohibition against the shipment of hot goods also applies to downstream shipments of these goods if the goods were removed from the producing establishment in the 30 days following a child labor violation. In addition, the DOL may also impose civil penalties and other remedies to encourage compliance before lifting objections to the shipment of goods.

Child labor laws do not require that minors employed in oppressive child labor are themselves engaged in commerce or the production of goods for commerce or are employed by an enterprise engaged in commerce or the production of goods for commerce. Unlike other provisions of the FLSA, the hot goods provision does not require that the minor be covered by the law on an individual or enterprise basis. FLSA Section 212(a) states, “No producer, manufacturer, or dealer shall ship or deliver for shipment in commerce any goods produced in an establishment situated in the United States in or about which within 30 days prior to the removal of such goods therefrom any oppressive child labor has been employed.” To help increase the effectiveness of efforts to enforce child labor laws, FAB 2023-03 provides agency interpretations for key terms of the law. Notable definitions include those of “goods,” “in or about an establishment,” and “oppressive child labor.”

What Are Goods?

“Goods” is defined as “wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof.” This includes such items as food, clothing, machinery and printed materials, as well as news, ideas, intelligence and other intangibles. This also includes any raw materials, parts, or ingredients that will be used, processed or converted into a new product. Where a hot good has been incorporated as a component of a new product, the entire new product will also become a hot good. For example, buttons produced at a factory in or about which child labor violations occurred are hot goods. If the buttons are removed from the factory within 30 days after the last child labor violation occurred and are subsequently shipped to a clothing producer who sews the buttons onto shirts, then the shirts become hot goods. Additionally, the commingling of hot goods with other goods will make all the goods hot. For example, if T-shirts that were produced at a factory where child labor violations occurred within 30 days of removal are stored at a third-party distributor’s warehouse and mixed with T-shirts from other factories, then all the T-shirts will be considered hot goods. In order to ship the T-shirts that are not hot, the distributor would need to be able to clearly separate the hot goods T-shirts from the other T-shirts.

What Is “In or About an Establishment”?

Section 212(a) applies when a minor is engaged in oppressive child labor “in or about” an establishment. A minor is employed “in” an establishment when they perform at least some of their occupational duties on the premises, regardless of whether they are employed by the actual owner or operator of the establishment. This does not include situations where the minor only visits an establishment for short periods of time or for the sole purpose of picking up or delivering messages or small packages and is not employed by the owner or operator of the establishment.

A minor is employed “about” an establishment if they perform their occupational duties close in proximity to the establishment and their occupation is directly related to the activities carried out in the producing establishment. For example, a minor who regularly loads products onto a truck outside the factory where the products were produced may be considered employed “in or about” such establishment, regardless of whether they enter the factory itself.

The term “establishment” refers to a physical place where goods are produced. An establishment may extend over an area of several square miles, such as a farm or logging operation, or may be confined to a few square feet, such as an individual workshop. Furthermore, an establishment does not need to have a permanently fixed location. For example, a boat that is used to catch fish may be considered an establishment for purposes of Section 212(a).

What Is Oppressive Child Labor?

Section 212(a) prohibits the shipment of goods in commerce that were produced in establishments in or about which oppressive child labor occurred. The FLSA defines “oppressive child labor” broadly. Different rules apply to agricultural and nonagricultural employment. In nonagricultural employment, 16- and 17-year-olds are not permitted to perform work prohibited by hazardous occupations orders issued by the WHD. However, minors in this age group are not restricted in the number of hours or times of day they can work. Fourteen- and 15-year-olds employed in nonagricultural employment are only permitted to perform work specifically permitted by wage and hour regulations and only at certain times of the day and for limited hours per day and per week. Children under the age of 14 are generally not permitted to work in nonagricultural employment except under limited circumstances, such as when they are employed by a parent or a person standing in place of a parent or when performing work such as acting or delivering newspapers to consumers. 

Changes to Assessing CMPs for Child Labor Law Violations

On Nov. 28, 2023, the WHD issued FAB 2023-04, addressing changes to assessing CMPs for child labor law violations. This FAB supersedes portions of the WHD’s 2016 guidance on noninjury and nonserious injury violations. The new assessment procedures are aimed at helping the agency more fully utilize its regulatory authority to prevent and remedy child labor violations under the FLSA. The FLSA contains two provisions authorizing the WHD to assess CMPs. The first provision allows the WHD to assess nonserious injury and noninjury child labor violations on a per-violation basis, currently up to $15,138. The second provision is for enhanced penalties for violations that cause death or serious injury of an employee under the age of 18, currently up to $68,801. Before FAB 2023-04, the WHD assessed CMPs for nonserious injury and noninjury violations on a per-child basis based on an employer’s size and the violation’s gravity. A nonserious injury means any injury that requires treatment no more extensive than first aid and results in a minor missing school or work or having their normal activities curtailed for less than five days. Under FAB 2023-04, CMPs for nonserious injury and injury violations are assessed on a per-violation basis instead of per child. As a result, an employer may be assessed separate CMPs for the same child, each of which can reach the statutory maximum. Additionally, CMPs for hot goods violations will be assessed on a per-shipment or per-delivery basis rather than on a per-investigation basis, and recordkeeping violations will be assessed on a per-employee basis.

When determining the CMP amount for noninjury and nonserious injury violations, including recordkeeping and hot goods violations, the WHD uses the statutory maximum ($15,138) and increases or decreases the CMP amount based on gravity factors. These factors include:

• Repeated violations (e.g., has the employer previously been found by the WHD to have violated the FLSA’s child labor provisions?);
• Willfulness (e.g., was there evidence that the employer knew that its actions were unlawful, showed reckless disregard for the child labor requirements or failed to take reasonable precautions to avoid violations?);
• Number of minors employed;
•  Age of minors (e.g., was employed minor below the legal age of employment?);
• Hazardous work (e.g., were minors employed in occupations prohibited by the FLSA?);
• Resultant injury (e.g., was the minor exposed to hazards, and did any injury result from that exposure?);
• Duration of illegal employment; and
• Hours of employment (e.g., what time of day did the violation occur, including whether it was during or outside of school hours?)

The CMP amount is also subject to reductions based on the number of employees, annual sales volume, and the amount of capital investment and financial resources relative to the size of the business.

Responding to Increased Enforcement Efforts

With the increased focus on identifying, stopping and preventing federal child labor violations, employers can expect federal child labor law enforcement efforts to continue to increase for the foreseeable future. As a result, organizations employing minor workers should take steps to ensure they comply with applicable child labor laws and minimize the risk of violating laws. While best practices will vary for each organization, taking the following actions can help employers mitigate the risk of violating federal child labor laws:

Establish Workplace Policies

Establishing workplace policies for hiring minor employees is essential for ensuring legal compliance. Strong policies help verify minors’ ages, enforce work activity and hour restrictions, and prevent costly investigations and penalties. Implementing and enforcing legally compliant policies can also foster a culture of compliance, helping to reduce child labor violations.

Implement Mandatory Training

Mandatory training for managers and supervisors on child labor laws and requirements enhances compliance efforts. Well-trained staff can identify violations and enforce company policies effectively. Managers and supervisors should be trained often to ensure they stay knowledgeable and aware of changes to youth employment standards.

Build Trust

Establishing an internal phone number that allows workers to report child labor violations anonymously can help reduce potential violations and keep young workers safe. Letting employees know that reporting violations will not lead to retaliation can help increase the likelihood that the internal hotline will be used.

Create a Uniform Onboarding Process for Minor Employees

A standardized onboarding process is crucial for integrating minor employees efficiently into an organization’s workforce. A well-defined onboarding process ensures minor employees are placed in appropriate positions with compliant schedules and that they complete all necessary employment documents.

Display Required Posters

Under the FLSA, employers hiring minor employees are required to meet posting requirements. These posters should be displayed in a conspicuous place in each establishment to allow employees to readily read them. While not required, if employers have a large population of non-English-speaking workers, they can also display posters in workers’ primary language. Additionally, many states have their own posting requirements related to child labor laws that employers may need to follow.

Post Warnings

Employers hiring employees under the age of 18 can place signs or stickers on equipment that the DOL deems hazardous for minors. Placing warnings on hazardous equipment for minors can help reduce injury risks. Employers can also add signage to mark restricted areas.

Provide Different Name Tags

Providing distinct name tags for minor employees aids in compliance with youth employment laws. Since federal youth employment laws place limits on the hours and jobs minor employees can work, employers can use different-color (or some other distinguishing characteristic) name tags  to quickly identify youth employees, ensuring they only perform permitted job duties and work appropriate hours.

Perform Regular Audits

Regular audits of youth employment practices can help employers promptly identify and address potential child labor violations. These audits can review organization policies, as well as employees’ ages,  job duties and hours. If internal audits reveal potential issues, employers can take prompt action to remedy these issues before they turn into costly violations.

Employer Takeaways

The DOL’s recent efforts to ensure compliance with the FLSA’s youth employment standards signal that employers will likely experience increased enforcement of these laws for the foreseeable future. This could result in more audits and costly penalties for employers. As such, employers should continue to review all applicable youth employment laws to ensure compliance. Employers concerned about potential violations can also speak with local legal counsel. 

This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2024 Zywave, Inc. All rights reserved.