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Department of Labor

Recommendations and Actions

DOL13: Integrate Enforcement Activities Within the Department of Labor

Background

The enforcement agencies in the Department of Labor (DOL) need to project a consistent message to the agency's customers and integrate approaches to common issues. Introducing more horizontal coordination and flexibility into the organization will foster achievement of these goals.

DOL enforces laws designed to ensure that employees receive the wages and working conditions to which they are entitled, that they have a safe environment in which to work, that pensions and other benefit programs are properly administered, and that workers' rights are protected. The various enforcement agencies within DOL have distinct cultures, stemming from their diverse histories and missions.

Today, five DOL agencies have enforcement as their primary responsibility, and at least six more have some level of enforcement activity or involvement. The Occupational Safety and Health Administration (OSHA) enforces safety and health standards that apply to most employers except state and local governments, the self- employed, family farms, and specific industries in which other regulations supersede. The Mine Safety and Health Administration (MSHA) enforces standards that apply to mine operators. The Pension and Welfare Benefits Administration (PWBA) enforces fiduciary standards and reporting requirements under the Employee Retirement Income Security Act. The Employment Standards Administration (ESA) enforces wage and hour laws, child labor laws, affirmative action requirements for federal contractors, and other workplace standards. The Office of Labor-Management Standards oversees specific union activities.

Three DOL organizations have enforce-ment-related responsibilities as a secondary part of their missions. The Employment and Training Administration (ETA) supports state enforcement efforts in the Unemploy-ment Insurance program and makes immi-gration labor certifications. The Veterans' Employment and Training Service (VETS) enforces the Veterans' Reemployment Rights Act, which establishes job reinstatement rights for persons called to active duty. The Directorate of Civil Rights enforces statutes prohibiting discrimination within DOL and in its programs.

Other DOL offices--including the Office of the Solicitor, the Office of the Assistant Secretary for Policy, the DOL Academy, and the Bureau of Labor Statistics (BLS)--support and advise agencies performing enforcement duties.

The responsible agencies carry out their enforcement activities in ways that meet their specific needs. The goal of each agency is to achieve compliance with the laws it is charged to enforce. Inspectors for the various agencies look for different violations using different methods. For example, when inspecting a manufacturing company, OSHA would go to the factory floor and review operations, ESA to the personnel office to review employment and wage practices, and PWBA to the corporate office to review the handling of the pension fund.(1)

From the perspectives of workers and employers, however, these distinct missions may be viewed more generally as labor standards, all of which affect the employer-employee relationship and the working environment. To employers and workers, the inspector represents the federal government first, DOL second, and the specific division third. To provide effective service, inspectors must begin to perceive their roles differently. At a minimum, they must be able to respond to basic questions about labor standards from workers and employers and to direct people to sources of additional help. In addition, if inspectors observe obvious violations of laws enforced by other DOL agencies, they must not give the appearance of ignoring those violations.

Opportunities to improve the way DOL conducts enforcement activities cut across program lines, and DOL already has taken several steps to develop more coherence among its enforcement branches. In 1990, after the Inspector General criticized the effectiveness of DOL's enforcement efforts, the Secretary mandated a review of all enforcement programs.(2) Several changes resulted, including the development of Memoranda of Understanding (MOUs) within and outside DOL.(3) Another result was a Small Business Handbook, which provides an overview of labor laws.(4) The handbook is available to employers, but it is also used by officers to learn about laws they do not enforce. This makes the officers better able to share information with employers and workers.

These positive first steps need further development. For example, they need to be consistently reinforced through training. Cross- training programs such as the one recently completed between ESA and the Immigration and Naturalization Service (INS) in the Department of Justice could be implemented more consistently within DOL.(5)

Cross-cutting issues are complicated by changing conditions. A specific case might require consultation between two agencies. Yet the conditions surrounding these issues change rapidly. The department must be able to respond to the issues more quickly and in a coordinated fashion. For example, immigration issues cut across ETA, ESA, and BLS. A given immigration issue might involve some or all of those agencies and require coordination with the Department of Justice and other agencies.

Traditional hierarchical structures have historically had difficulty responding effectively to cross-cutting issues. Those structures are also criticized as slow to meet rapidly changing requirements; DOL cannot reorganize around every cross-cutting issue or new requirement. Creating a separate immigration division within DOL, for example, would be an inefficient and incomplete solution because a new division would still need to work with the other agencies. Furthermore, a new division would still have to coordinate with ESA when wage and hour issues are involved.

Recent advances in information technology have simplified the challenge of dealing with new cross-cutting tasks. The result in the private sector has been increasingly flexible organizational structures, variously termed virtual organizations, boundary-crossing networks, and agile manufacturing.

The virtual organization concept offers a model for how DOL can operate within a common framework for setting enforcement priorities and achieve economy and quality through shared methods. In the private sector, a virtual corporation is one that adapts in real-time to the customer's changing needs, an approach that involves "traditional offices, departments, and operating divisions constantly reforming according to need."(6)

The necessary flexibility is created by working in an organizational network, defined as having "independent members with multiple leaders, a unifying purpose with lots of voluntary links, and interacting levels."(7) Rather than reorganize in the traditional sense of the word around enforcement missions, DOL needs to create organizational networks to solve specific problems and work the solutions through the hierarchy. Illustrations of opportunities to use these flexible approaches are given below.

A Consistent Message To The Department's Customers. When an inspector enters a workplace, the employer sees a representative of the federal government as much as a Wage and Hour or OSHA inspector. DOL can do more to take advantage of this workplace presence by developing shared customer service approaches, rationalizing the penalty structure, and acting on any readily identifiable violations of labor laws.

Customer Service Opportunities. DOL's enforcement mission is to protect the American worker, which means that the nation's workforce is its primary customer. To accomplish that mission, DOL must also treat businesses that may be targets of enforcement as its customers. Viewed in that light, customer service includes making it easy for employers to find out what the law requires of them, keeping the rules simple and easy to understand, and protecting individuals' rights during the inspection and penalty process, particularly when inadvertent violations can result from misunderstanding of the standards.

DOL's Small Business Handbook is a good first step in offering simple, easy-to-understand materials on labor laws. DOL also deserves credit for developing a straightforward handbook explaining the requirements of the recently enacted Family and Medical Leave Act of 1993. Now, the enforcement agencies must seek ways to expand on these steps. For instance, when ESA certifies farm labor contractors, the agency might provide a bilingual pamphlet on contractors' legal responsibilities. The department can also explore possibilities for consolidating the various posters employers are required to display informing employees of their rights. In addition, to promote understanding of new regulations, DOL can routinely develop handbooks or guides in plain language at the same time it is writing regulations. This process could identify legally sufficient, simple language for use in both handbooks and regulations.

On-line computer inquiry systems may also have a place in DOL customer service. DOL can set up systems that help both employers and employees navigate the complexities of the law and understand the rules that apply to them. Inspectors can make people aware of these information services in the course of site visits. This type of across-the-board outreach could be particularly helpful in promoting understanding of requirements resulting from new laws or regulations.

Anomalies in Labor's Penalty Structure. Expanding the use of site inspections as educational opportunities is only one approach to projecting a consistent message. When violations occur, penalties are the performance measures through which the justice system communicates expectations to the public. Public perception that the penalty fits the crime promotes compliance with the law. Weak or absent penalties undermine compliance by communicating to the public (and to others in the justice system, such as U.S. Attorneys who decide which cases to prosecute) that a violation is not very serious. On the other hand, penalties that are perceived as excessive may promote litigation or resistance to compliance.

An across-the-board review of the established penalties suggests that the penalties do not consistently reinforce the requirements in the law. For example, ESA enforces laws requiring employers to maintain records that establish hours worked and wages paid. Despite this requirement, the law provides no penalty for failing to maintain the records, even though a lack of records undermines the officer's ability to establish whether a violation has occurred. OSHA enforces laws requiring employers to maintain a safe working environment. If failure to do so results in the death of an employee, however, the employer is subject only to prosecution for a misdemeanor. Under present law, illegally duplicating a videotape carries a more severe penalty.

DOL also needs better tools to address the repeat violator. In other arenas, career criminal or habitual offender provisions provide greater penalties for those with a clear history of breaking the law. Measures to address this problem may take various forms, and Congress has already addressed this issue for some DOL agencies. The 1989 Fair Labor Standards Act Amendments added penalties for repeat and willful violations of wage and hour laws. Alternatives to penalties are under review by MSHA, which is considering a licensing mechanism that could preclude individuals with a history of operating unsafe mines from opening new operations.

Opportunities to Take Advantage of Commonality. If it is to integrate the message it sends to customers, DOL must first integrate its work horizontally. A variety of models exist for facilitating integration. Some require policy synthesis, which can be accomplished by designating a coordinator for specific cross-cutting issues or creating teams to develop integrated strategies. Some require horizontal communication about best practices. Some require coordination at the field level, which is currently promoted through formal MOUs. In the long term, an integrated set of goals and the right reward structure could encourage cooperation without the need for formal written agreements to cover each situation.

Integrated Goals and Missions. DOL agencies can work together to set individual program goals and priorities. In some instances, data sharing may be all that is needed. In others, the issues may be more complex. For example, sweatshops that might be of priority interest to the Wage and Hour Division might have unsafe working conditions that would not meet OSHA's priority thresholds.(8) Without a common understanding of the overall departmental goals, the two agencies could have different expectations about the potential OSHA role in such cases. To alleviate that concern, the Wage and Hour Division and OSHA entered into an MOU in 1991 to share information and coordinate strategies. Mechanisms like these can give the department's inspectors guidelines to help them determine proper and effective approaches. The department therefore needs to develop a common framework for reviewing priorities and the potential for overlapping interest.

Targeting Strategies. Another area in which more cross-communication is desirable is targeting methods. Most enforcement programs are primarily complaint-driven. Currently, OSHA has a small random sampling program. Although the Office of Labor-Management Standards and the Wage and Hour Division have performed some sampling in the past, they do not currently use this method.

Sampling programs are helpful in developing a national picture of compliance, and thus in judging the performance of the enforcement program. Although such programs are sometimes criticized for diverting scarce resources from efforts directed at likely violators, they also have a deterrent effect by communicating that anyone may be subject to enforcement (the potential of a random audit by the Internal Revenue Service is commonly credited with promoting compliance with the tax laws). Targeted sampling may be useful in industries for which complaints are less likely to be received. This is an important point for DOL, given that labor law violators in some industries tend to hire recent immigrants who face a language barrier or do not know how to file a complaint.

PWBA performs an annual review of its cases to determine which sources resulted in the best cases, judged according to a variety of criteria. Applied department-wide, this type of analysis could help better define areas where information-sharing is needed.

Full Court Press. DOL agencies have attempted to identify areas in which referrals of potential violations to other agencies make sense. Some within the agency have suggested the need to be more systematic about selecting joint targets, while ensuring that all officers are aware of certain violations. This approach might be expanded beyond DOL so that any federal officer would have general information about how to recognize and report certain serious violations.

For this approach to work, selected priority areas should involve commonly supported laws and require little training.

Rewards for Pursuit of the Mission. The Chief Financial Officers (CFO) Act requirements are DOL's primary vehicle for coordinating development of performance measures. Most of the measures developed to date focus on inputs rather than results and fail to measure progress toward cooperative goals, such as referrals to other agencies. A generic cross-training program was abandoned in the face of budget cuts, in part because managers did not perceive it as related to accomplishing the objectives by which they are being measured.

The process through which performance measures have been developed under the CFO Act and, previously, the Federal Managers' Financial Integrity Act leaves much to be desired. Initial operational performance measures were developed with little or no input from the operational agencies. Although the agencies deserve credit for progress since then, the hard issues of how to measure the effectiveness of enforcement programs have yet to be joined. It is not clear that the CFO Act, which is aimed at internal management accountability, is the right vehicle for developing such measures.

Performance measures provide a good example of an issue for which there are recurring dilemmas for each of the agencies. All enforcement agencies must face the quality versus quantity trade-off, difficulty in developing objective assessments of case quality, and the question of how to measure and reward cooperation. The enforcement agencies should work together with program analysts to develop common approaches for adaptation to specific program needs. The requirements of the recently enacted Government Performance and Results Act place additional emphasis on the development of performance measures.

Actions

1. DOL should ensure that its enforcement agencies operate as a flexible organizational network.

The messages that the enforcement agencies send to their customers as well as their strategies, tactics, and rewards must be developed within a common, department-wide framework. This framework must assist DOL in determining how to promote labor standards across the board.

2. DOL should strengthen the effectiveness of communications with enforcement customers by ensuring that DOL officers consistently represent DOL's overall enforcement mission, particularly during site inspections.

Materials to help officers educate employers should be developed when the agencies write new regulations and standards. DOL should also pursue automated approaches to facilitate employers' access to information about the laws that apply to their specific situations.

3. DOL should prepare a legislative proposal to redress the anomalies in the labor law penalty structure.

DOL should review its penalty structure across the board and develop a legislative proposal that creates a penalty for wage and hour recordkeeping requirements, provides a significant criminal penalty for deaths in the workplace due to serious health and safety violations, and establishes oversight mechanisms to target habitual offenders.

4. DOL should assess the feasibility of issuance by labor inspectors of warning notices when they encounter violations of other agencies' laws.

The ESA's experiences with its recent INS initiative to issue warnings for recordkeeping violations will be instructive in expanding this strategy within DOL.

5. DOL should ensure policy coordination of agencies' goals and missions.

This should encompass not only enforcement priorities, but also integration of other cross-cutting activities such as the agency's role in immigration issues.

6. DOL enforcement agencies should collaborate in developing targeting methods.

The department should consider the need for all enforcement programs to perform some random sampling or have a single sample receive a general review of all major requirements under Labor's jurisdiction. Targeted sampling should be used in industries where potential violations exist, but complaints are unlikely.

7. DOL should select one or two priority areas to receive a full court press.

DOL should consider expanding this concept beyond the area of child labor laws. DOL should explore developing full court press strategies in consultation with other law enforcement agencies that perform significant activities in workplaces.

8. DOL enforcement agencies should collaborate to develop meaningful performance measures that reward quality and cooperation.

The department needs to ensure that cooperative efforts, prevention programs, and high-quality work are rewarded. It must encourage pursuit of enforcement strategies that may have greater impact than resolving issues on a complaint-by-complaint basis, and it needs to establish a cross-component team of field officers, analysts, and managers to develop measures that reflect results and coordination.

DOL should develop an implementation plan that lists what objectives can and should be achieved first and what actions will achieve those objectives. As time passes, a formal plan will allow DOL to determine which recommendations it has successfully completed and which ones require more effort. DOL has embarked on some of these recommendations already.

Implications

These recommendations may appear obvious. For example, the General Accounting Office and the Grace Commission have previously called for better coordination and performance measurement within the department. The purpose of presenting these recommendations here--in the context of a discussion of flexible organizational networks--is to highlight a need for change in DOL's style of working. Its many MOUs, within and outside the department, reflect both a willingness to cooperate and a vertically structured approach to doing so. The process of developing and revising MOUs helps ensure that the parties clarify expectations. However, it may be impractical to develop and revise MOUs in response to rapidly changing conditions.(9) DOL needs to build on its record of recognizing the need for coordination by creating a reward structure that encourages initiative and cooperation, and flexibility in the way officers' jobs are defined.

Like other federal entities, DOL faces barriers to promoting more flexibility in its organization. One barrier is line-item budgets, which give rise to concerns about the possible misappropriation of funds through pooling efforts. DOL has overcome such barriers in the past; for instance, it crossed agency lines to use in-house mediators in its alternative dispute resolution pilot project, but it has exercised caution, e.g., legal review before undertaking the initiative. Additionally, each of the enforcement agencies handles its own debt collection. Although centralization might be more cost effective, the pressure on agencies to keep administrative overhead costs low creates a disincentive to placing these activities under a single organization.

Another barrier is cultural. Organizations that are accustomed to working vertically find it difficult to adapt to working horizontally. DOL managers should seek and employ models that integrate teamwork into hierarchical organizations.

Finally, in considering these recommendations, the Secretary should undertake only those for which the department's top management is prepared to seek a commitment from DOL agency heads. As one expert notes in discussing organizational change: "Change cannot succeed without a network of sustaining sponsorship that constantly reinforces the importance of a change as it moves through the organization. With cascading sponsorship, initiating sponsors enlist the commitment of other key managers below them to support the change throughout the organization. These managers, in turn, do the same with those below them. An effective network of sponsors minimizes logistic, economic, or political gaps that exist between layers of the organization, and it also produces the appropriate structure of rewards and punishments that promotes achievement."(10)

Fiscal Impact

The fiscal effect of these proposals cannot be determined; however, some of these recommendations would require resources.

Endnotes

1. ESA would also interview employees at various locations.

2. See U.S. Department of Labor, Office of Inspector General, DOL Criminal Enforcement, Report number 09-90-202-01-001 (June 4, 1990). In the report, the Inspector General presented the results of a review of the criminal enforcement activities of the department. The review focused on mechanisms for identifying and pursuing criminal violations. A key conclusion (page 24) was that "the department lacks a framework for evaluating future criminal enforcement achievements."

3. Most of the DOL enforcement agencies report that they have MOUs with each other. Most also have MOUs with other agencies with which they share a common interest. For example, OSHA receives leads from other agencies with specific worker safety and health responsibilities, such as the Federal Railroad Administration and the Federal Aviation Administration in the Department of Transportation. Finally, most DOL agencies have encouraged their local offices to develop MOUs with their local counterparts.

4. See U.S. Department of Labor, Office of the Assistant Secretary for Policy, Small Business Handbook: Laws, Regulations and Technical Assistance Services (Washington, D.C., 1993).

5. Such cross-training would not necessarily lead to agencies performing investigations for each other, but would enable officers to answer common questions and, in some areas, recognize indicators of possible violations.

6. Davidow, William H., and Michael S. Malone, The Virtual Corporation (New York: Harper-Collins Publishers, Inc.), p. 6.

7. Lipnack, Jessica, and Jeffrey Stamps, The TeamNet Factor (Essex Junction, VT: Oliver Wight Publications, 1993), p. 36. The model outlined in this book is particularly applicable to the suggestions in this paper because it does not assume the elimination of hierarchy.

8. This discussion differs from GAO's definition of sweatshops, which involves serious violations of both Wage and Hour and health and safety laws. See U.S. General Accounting Office, Sweatshops in the U.S., GAO/HRD-88-130-BR (Washington, D.C.: U.S. General Accounting Office, 1988).

9. DOL began work with the Department of Agriculture on a Memorandum of Understanding (MOU) following a disastrous fire in a poultry processing plant in North Carolina. The MOU has not been completed.

10. Conner, Daryl R., Managing at the Speed of Change (New York: Villard Books, 1993), p. 121.

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