US Department of Labor Releases New Guidance for Child Labor Law Penalty Assessment

Topics: Employee Hiring, Discipline & Termination, Legal Information, New Laws & Legislation, Personnel Policies and Procedures, Wage & Hour Issues

On November 28, 2023, the United States Department of Labor’s (“DOL”) Wage and Hour Division (“WHD”) issued a Field Assistance Bulletin (“FAB”) explaining changes to its process to assess civil money penalties for child labor law violations. The FAB, which supersedes portions of the WHD’s 2016 guidance on child labor penalties, comes on the heels of the DOL’s 2023 initiative to investigate violations of the child labor provisions of the Fair Labor Standards Act (“FLSA”). 

Oppressive Child Labor Under FLSA

The child labor law provisions under 29 U.S.C. 212(c) prohibit employers 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.” According to the FAB, the WHD investigations found an 88% increase in FLSA child labor violations. In the fiscal year 2023, the WHD found 995 of the employers it investigated violated child labor laws which had an impact on nearly 5,800 children.

As part of the WHD’s strategic initiative, it previously issued a FAB combating the use of child labor in the shipment of “hot goods,” which are goods produced in an establishment in or about which oppressive child labor occurred. “Oppressive child labor” is broadly defined under the FLSA and includes employees under the age of sixteen (subject to certain limitations and exemptions) and employees under the age of eighteen in any occupation which the Secretary of Labor finds to be hazardous for the employment of children. 

Enhanced Penalties

Previously, the WHD considered whether Child Labor Civil Money Penalty (“CMP”) assessments were appropriate based on the size of the business and gravity of the violation. The FLSA authorizes assessment of CMPs under two provisions, permitting penalties on a per-child basis up to $15,138 for child labor violations and an enhanced penalty up to $68,801 for child labor violations that cause the death or serious injury of an employee under the age of 18.  However, under the new FAB, CMP’s are no longer on a per-child basis, but rather a per-violation basis. In other words, employers may now be assessed separate CMPs for the same child for each violation (such as multiple hazardous order violations and multiple recordkeeping violations).

In calculating the CMP amount, the agency utilizes the statutory maximum (currently $15,138) and increases or decreases the CMP amount based on the following factors: willfulness; number of minors employed; age of minors; hazardous work; resultant injury; duration of illegal employment; and the hours of employment. In addition to the factors above, the CMP amount is subject to reductions based on (1) the number of employees; (2) annual sales volume; and (3) amount of capital investment and financial resources relative to the size of the business. 

Given the ongoing initiative to prevent child labor violations through increased enforcement and penalty exposure, employers, especially employers in the manufacturing and fast food industries, should continue to take steps to ensure compliance, such as verifying employee age and retaining all records of the birthdate for every employee under the age of 19.