After the recent seventy cent increase in minimum wage to $7.25, there were some interesting statements being made by Labor Secretary Hilda Solis. In a press conference on July 24, Secretary Solis announced that the increase will help 3 million to 5 million workers and is “projected to generate $5.5 billion in consumer spending over the next year.” Of course, this statement implies that the money, if kept by businesses, would have just sat in a vault in the boss’ office, and not have been spent on additional equipment, more employees, or expanding the business.
Under Solis, employers can expect increased enforcement and a more aggressive eye towards litigation. During the first six months of 2009 alone, DOL has collected a total of $82 million in back wages from employers. DOL is in the process of hiring 250 new field investigators for the Wage and Hour Division, who will be tasked with targeting industries with poor track records of compliance.
So, don’t be surprised if you get a knock on the door from DOL in the near future looking to collect back wages Just look on the bright side — your company is doing its part to boost consumer spending and stimulate the economy.