The U.S. Labour Department has recently commenced an initiative to require employers to prepare and adopt compliance plans to ensure they do not violate wage, job safety and equal employment laws. The announcement was accompanied by an expression of the desire by Labour Secretary Seth Harris that his department foster a “culture of compliance” among employers, as opposed to a complaint-driven system in which the employers are “caught” not complying. The intent is for employers to prepare written plans designed to prevent violations of workplace laws, including plans to address safety hazards in the workplace.
The plan is focused in particular on recent wage violations in restaurants and discount retailing, as well as safety violations in coal mining and construction. Another focus is on the widespread use of independent contractors to avoid paying Social Security taxes and to avoid wage laws. In future, employers will have to provide a written explanation to the Labour Department to explain their use of contractors, and to provide a similar explanation to those workers.
Not surprisingly, employers have reacted negatively, alleging micromanagement of their businesses. Pro-labour commentators have also expressed concerns regarding the potential superficiality of such plans.
Since trends in the United States frequently precede similar trends in Canada, it remains to be seen whether Canadian provinces eventually follow suit to ensure compliance with labour laws. A greater culture of compliance exists in Canada than in the United States, but recessions typically lead to some avoidance of labour standards and it is to be expected that any slackening of compliance during the recession may be met with a similar initiative down the road.