The U.S. Department of Labor (DOL), like many private-sector businesses, has come to realize the value of using technology—and especially, mobile technology—to help fulfill its mission: to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; to improve working conditions; to advance opportunities for profitable employment; and to assure work-related benefits and rights. Rather than relying solely on a limited number of inspectors targeting a small number of employers at a high cost, the agency can now use this technology to invite the public to assist it in targeting a greater number of employers at a relatively low cost.
To that end, a little more than two years ago the DOL launched its first smartphone application, the “DOL time sheet.” Workers could log on at any time and at any location and independently generate a virtual time sheet, which, the agency claimed, would “help ensure workers receive all wages earned.”
Shortly after the time sheet app went live, the DOL hosted its first ever app challenge (called the InformACTION app challenge), seeking for third-party software developers to “showcase innovative uses of the department’s data.” The app challenge was part of a new governmentwide online initiative aimed at improving government and encouraging innovation.
The DOL challenge resulted in “Eat, Shop, Sleep”—an app that combines information from consumer-review websites like Yelp with publicly available wage and hour and workplace-safety-enforcement data—and a $15,000 award for its designer, Rachel Moore. According to Xavier Hughes, the agency’s chief innovation officer, Eat, Shop, Sleep’s impact is real and serves as a “wonderful example of how an effective public/private partnership can help fulfill our mission at the Department of Labor.” He noted, for example, that recently, a DOL investigator received a call from a business owner who said, “We’ve been going back and forth on back-wages violations and I want to settle it.” The investigator asked, “What made you change your mind?” The business owner’s response? “That app out there, it’s ruining my reputation.”
Fair Labor Data Challenge
Now the DOL has issued its next challenge, dubbed the Fair Labor Data Challenge. While similar to the InformACTION app challenge in its desire to integrate the department’s enforcement data with social media platforms, this challenge asks developers to drill down further. Any software application would have to work on iPhones and Android devices and effectively integrate enforcement data “with other publicly available consumer-friendly data sets and consumer-ratings websites like Yelp and mapping tools like Google Maps.” The DOL also wants developers to ensure that the app integrates enforcement data from other agencies, such as state health boards. A user will be able to search across locations and not only read consumer reviews about the establishments in the vicinity posted on sites including Yelp, Google+ and City Search but will also be able to review their compliance history. Or the user could enter the name or address of a specific establishment and learn about its impeccable service and delicious cuisine as well as its compliance history.
This app, the agency claims, will expose consumers to businesses that violate wage and hour and workplace-safety laws (and possibly other laws) and make them think twice before spending “their hard-earned wages” at these establishments. That’s right: Despite that wonderful online review of your Steak Frites, your patrons may consider dining elsewhere if informed of your overtime violation. In other words, the DOL is officially promoting a policy of Internet shaming.
Not surprisingly, the department’s strategy has its critics, who argue that it disproportionately penalizes noncompliant employers. Organizations that don't pass a DOL audit may have to pay civil penalties and back wages and institute certain changes in the workplace. Those penalties, one might argue, appear to fit the “crime.” But with Internet shaming, consumers’ review of violations could severely harm an employer’s bottom line (and, ironically, it sometimes might end up negatively affecting the very workers the DOL is trying to protect).
And this is especially true because the user has little or no context to work from. For example, the agency’s challenge requires only that the developer identify certain basic violation information, such as number of violations and total back pay owed. He or she cannot tell whether the establishment had one small violation based on an innocent mistake, whether it’s a pariah that does not deserve anyone’s patronage or if the business falls somewhere in between. Further compounding the potential for reputational harm is the fact that nothing is stopping an anonymous user (maybe a disgruntled former employee or even your competitor) from highlighting your negative compliance history on his or her review—“Not only is the service horrible, but I hear they don’t pay their workers overtime!”—even if the statement has no basis in fact.
Respond to Reviews
Whether or not you agree with the DOL’s shaming strategy (especially from a political, economic or even philosophical perspective), you must pay attention. Studies show that consumers easily change their minds when confronted with negative reviews and treat them as fact when they’re left unaddressed. Therefore, as an employer operating in the Internet age, you should develop best practices for responding to such reviews. Even just a few words addressing the issue are often enough to put a customer’s mind at ease.
But don’t stop there. If you’ve heard it once, you’ve heard it a million times from employment lawyers like me: Please, get your house in order; don’t be the next employer to join the DOL’s enforcement database. Perform that wage and hour audit you’ve been putting off for years. Conduct that training you keep telling your counsel you’ll get around to. Actually implement those robust wage and hour compliance procedures you know your company needs. Taking these simple (and usually inexpensive steps) will reduce your potential exposure not only to lawsuits but also to reputational damage—damage whose cost may far outpace the damage you incur from any one lawsuit.
Michael Arnold is an attorney at Mintz Levin in New York City.