June 16, 2010
The Declaration of Independence cites as an example of King George’s tyranny: “He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.” To prevent a similar situation in the new United States of America, the Founders assigned the federal government limited powers.
Unfortunately, those limits were eviscerated during the last century and we now have the nearly omnipotent federal government the Founders tried to avoid. A prime example is the growth in the federal government’s regulatory apparatus.
Contrary to popular myth regarding the last president, the federal government’s regulatory reach has expanded over the past decade. The Obama administration wants to extend that reach, even though costly new regulations are stifling economic growth by fostering uncertainty in the business community. Richard Rahn points out that every dollar of federal regulatory spending costs the private sector an estimated $20, thus in total “more than $1 trillion and roughly 15 percent of the U.S. GDP.”
One agency where the government’s swarms are growing is the Department of Labor. Washington attorney Mary Pivec recently called attention [$] to Labor’s new ground offensive against employers:
The agency is armed with 250 new investigators and plans to have 1,000 on board by the close of FY 2011—representing an increase of approximately 50 percent over 2008 levels. The Wage and Hour Division is also partnering with unions and employee advocacy groups, other DOL agencies, the Department of the Treasury, the vice president’s Middle Class Task Force and state wage and hour investigators to identify and investigate employers on a nationwide versus local basis.
Employers will have onerous new recordkeeping obligations, and those who fail to comply “will face a willful violator presumption if caught, subjecting them to three years or more back pay liability and liquidated damages based on the results of the agency audit.”
At the same time, Pivec notes that the Wage and Hour Division will no longer issue advice letters to individual employers regarding Fair Labor Standards Act compliance. Instead, employers will have to rely solely on legal counsel to help them navigate the “gray” areas of the law, which will afford employers less protection if the Labor Department takes action against them.
This new labor regulations witch hunt conducted at the behest of unions will obviously not help the struggling economy.
Departments:
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