Quick Hits
- The DOL is enforcing child labor laws through two key mechanisms: (1) preventing employers from shipping or profiting from “hot goods” and (2) assessing aggregate civil money penalties.
- An August 2023 DOL field assistance bulletin advises field agents on identifying violations of “oppressive child labor” and applying the “hot goods” provision—on top of assessing civil penalties.
- In November 2023, the DOL announced it would no longer be assessing civil money penalties on a per-employee basis but rather on a per-violation basis.
The DOL launched the National Strategic Enforcement Initiative on Child Labor in February 2023 in part to look for more creative ways to turn up the heat and increase the penalties on employers that violate child labor laws. Investigators are accomplishing this goal through two key mechanisms: (1) preventing employers from shipping or profiting from “hot goods” and (2) assessing aggregate civil money penalties.
Hot Goods
In August 2023, the agency circulated a field assistance bulletin advising its field agents on identifying violations of “oppressive child labor” and applying the “hot goods” provision—on top of assessing civil penalties. The “hot goods” provision allows the DOL to seek an injunction to prevent employers, as well as others that may ship the goods, from shipping any goods produced in an establishment where child labor violations occurred within the past thirty days. The DOL may file for injunctive relief in federal court and seek its costs for the action. Beyond that, when the goods have already shipped, the DOL can seek an order for disgorgement of related profits.
In March 2024, the DOL did precisely that when it successfully obtained a federal consent judgment against a manufacturer of outdoor power equipment components, requiring disgorgement of thirty days’ profit ($1,500,000) for shipping hot goods. The disgorgement amounted to more than five times the amount of the civil penalties assessed.
Days later, on March 30, 2024, the DOL filed for injunctive relief to utilize the “hot goods” provision against a poultry processing facility and its affiliates to stop the employers from placing the goods into the stream of commerce and/or retaining profits from such “hot goods” already shipped. The court granted the injunction on April 1, 2024. On April 30, 2024, the DOL and employers reached a federal consent judgment, including $171,191 in civil penalties and $1,000,000 in disgorgement.
Given these recent enforcement actions, employers that are found to have violated child labor laws may want to prepare for investigators requesting they agree not to ship any alleged “hot goods” and to disgorge themselves of the profits for goods that have already shipped. In lieu of voluntary compliance, the DOL has already shown its willingness to seek and obtain that relief.
Aggregate Penalties
Previously, the DOL assessed civil money penalties (CMP) for child labor violations on a per-employee basis, meaning that if DOL determined two minors performed prohibited hazardous work on five occasions, the DOL would assess two penalties, one for each employee. In November 2023, the DOL announced it would no longer be assessing CMPs on a per-employee basis but rather on a per-violation basis. This means if the same violations discussed above occurred in the summer of 2024, they would result in up to ten separate penalties being assessed instead of two. The DOL has specifically stated that it will apply this same aggregate method for recordkeeping violations where an employer fails to maintain records of dates of birth for any employee under nineteen years of age. Beyond those measures, it has recently been reported that federal lawmakers are considering increased penalties for wage and hour violations, including child labor.
Preventive Measures
In light of the DOL’s increased scrutiny on child labor, and the higher costs now associated with violations, employers employing minors or preparing to hire minors for summer jobs may want to consider the following:
- reviewing the maximum hours and time-of-day restrictions applicable to minors fourteen and fifteen years of age;
- ensuring that the jobs or tasks to be assigned to minors do not fall into one of the “hazardous” occupations or tasks (additional restrictions apply to minors fourteen and fifteen years of age);
- confirming they are keeping accurate records of minor employees’ dates of birth in accordance with federal regulations;
- checking related state requirements in states where they have employees to determine whether there are additional maximum hour and time-of-day restrictions, recordkeeping requirements, or hazardous occupations that may apply; and
- conducting audits of existing child labor compliance.
The DOL’s Wage and Hour Division has also produced a child labor fact sheet for federal compliance that may be helpful for nonagricultural employers.
Ogletree Deakins will continue to monitor developments and will provide updates on the Employment Law and Wage and Hour blogs as additional information becomes available.
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