Dr. David Weil, Director of the Wage & Hour Division of the U.S. Department of Labor, speaks at the University of Arizona Medical School, Phoenix, April 1, 2015. On stage are Wage and Hour Division Phoenix District Director Eric Murray (at left) and Attorney Matt Meaker, who was also the event coordinator (Photo courtesy of the DOL Wage and Hour Division.)

Dr. David Weil, Director of the Wage & Hour Division of the U.S. Department of Labor, speaks at the University of Arizona Medical School, Phoenix, April 1, 2015. On stage are Wage and Hour Division Phoenix District Director Eric Murray (at left) and Attorney Matt Meaker, who was also the event coordinator (Photo courtesy of the DOL Wage and Hour Division.)

A recent visit to Arizona by a federal official was made possible by attorneys and others concerned about employee misclassification. The result was a day of speaking events and community meetings for Dr. David Weil, Director of the Wage & Hour Division of the U.S. Department of Labor.

It’s hard to overestimate the economic and other problems that misclassification causes.

At an April 1 event, Wage and Hour Division Phoenix District Director Eric Murray said that fully one-half of his office’s time is taken up with the issue. It affects: individual workers who may be underpaid, state and other agencies that get artificially lower revenue because of the errors, and businesses that may be forced into difficult decisions regarding compliance.

Wage and Hour Division Phoenix District Director Eric Murray speaks at employee misclassification event, April 1, 2015.

Wage and Hour Division Phoenix District Director Eric Murray speaks at employee misclassification event, April 1, 2015.

That constellation of problems led lawyers like Matt Meaker to form the Employee Misclassification Compliance Assistance Program (EMCAP) Working Group. He is the group’s Chair, and he took the lead on bringing the issue to the attention of the federal agency.

The subject generates much passion, Meaker said at the April 1 event. But it is not an easy subject to confront.

“Good guys want to compete on a level playing field,” Meaker told a roomful of employment lawyers, contractors and their representatives, and others. “They want to be good stewards of industry.”

Attorney Matt Meaker speaks at employee misclassification event, April 1, 2015.

Attorney Matt Meaker speaks at employee misclassification event, April 1, 2015.

And so a working group created a pilot program that became EMCAP. It allows “candid talks about business decisions, not just legal issues.”

The keynote speaker at the University of Arizona auditorium in downtown Phoenix was Dr. David Weil. In public remarks and a half-hour interview afterward, he explored the landscape of misclassification, its roots and future possible solutions.

Highlighting the politically fraught nature of his position, Weil was the first Senate-confirmed Wage and Hour Administrator in a decade. As he did in his confirmation hearings (introduced by Sen. Elizabeth Warren), he spoke in Phoenix at length on misclassification.

A portion of his confirmation hearing is below; his remarks on misclassification begin at 2:40 (though Senator Warren’s intro is worth watching too):

Given that political landscape, it’s not surprising that Weil comes from a business school (at Boston University). In Phoenix, he described his business bona fides and said he was “proud of his decades in a business school.” And he described the mission of the Department of Labor as twofold: to understand that business is a fundamental part of our economy, and to protect workers.

But on the elevator-pitch version of the DOL’s mission, Weil is crystal-clear: “Our job is to make sure people get a fair day’s pay for a fair day’s work.”

The reality of the department’s resources complicates that vision considerably. Weil discussed the strategic thinking that must go into enforcement decisions. As DOL staffers gaze at a landscape with 7.3 million workplaces, they have become adept at reviewing data to identify red flags. They also look closely at industries that have had traditional problems with misclassification—construction, janitorial, hospitals, restaurants, and logistics, to name a few.

Weil used the title of his book The Fissured Workplace to explain more deeply the challenging predicaments presented by an evolving economy. As companies have decided to focus on “core competencies” and shed “ancillary” activities, efficiencies have increased, even as the number of people on the payroll has decreased.

But what happens to those ancillary functions and all the people who used to do them? Often, they remain, but are now employed by a third-party entity, ostensibly more adept at that particular function.

That kind of outsourcing and subcontracting is not new, Weil admits. But what is new is the stringent and detailed standards that the large brands impose on those third-party firms and their many employees. The larger companies need to ensure a consistent delivery of all their brand elements, and so they often control non-employees’ work lives down to the granular level. And they have new and developing technologies that allow the larger brands to monitor every moment in the lives of their products and the workers.

So … are those workers employees, or not? Often, the larger brands rely on a strategy that says “not.”

Weil and we may sympathize with the challenge faced by those companies. A branded cellphone must work exactly the same, wherever it was manufactured. A person checking into a chain hotel expects a nearly identical level of customer experience, whether they are in Dubuque or Dallas. But some companies may be crossing the misclassification line.

The challenge may be just as great for companies that are not in violation. As they view their industry’s landscape, what if they find they cannot compete without certain questionable strategies?

That, said Weil, is where groups like EMCAP come in. Yes, DOL enforcement must be vigorous, and collaborations with state departments of labor must be robust. But business buy-in and self-regulation are vital.

Wage and Hour Division Administrator Dr. David Weil speaking with American Subcontractors Association of Arizona CEO Carol Floco (at left) and Attorney Julie Pace. (Photo courtesy Wage and Hour Division.)

Wage and Hour Division Administrator Dr. David Weil speaking with American Subcontractors Association of Arizona CEO Carol Floco (at left) and Attorney Julie Pace. (Photo courtesy Wage and Hour Division.)

Via EMCAP and similar approaches nationwide, employers may gather and use dialogue and other methods to curtail bad practices.

“When you hear from a peer, a fellow employer,” said Weil, “that is incredibly powerful.”

He cites the Florida citrus industry as an example of successful self-policing. He said that when the DOL shared data about which subcontractors were regularly violative in misclassification and in regard to worker rights, larger producers asked for a copy of their maps. Pointing to the red dots indicating poor performers, some industry leaders said, “We don’t want to do business with the red bubbles.”

And that altered toolbox of strategies is just fine with the Wage & Hour Director.

“We’re not into a game of gotcha,” said Weil, “but compliance.”

Though enforcement is still a tool, he said, the primary focus must be “thinking creatively about changing business decisions.”

My unedited follow-up interview with Dr. David Weil is here:

 

And more background on EMCAP is here. We may follow up with Matt Meaker and his partner Helen Holden on the committee’s progress.

A Flxible tour bus in front of Boston's Verb Hotel tells you something different is going on with this parcel's transformation.

A Flxible tour bus in front of Boston’s Verb Hotel tells you something different is going on with this parcel’s transformation.

“What does a big red bus have to do with adaptive reuse?”

That is how I open my Arizona Attorney column for the October issue (I’ll share the whole thing when it’s online). The bus comment relates to a recently refurbished Boston, Mass., hotel. The larger issue poked at the question of how laws and lawyers can work to make urban spaces more vibrant and dynamic.

One way to achieve adaptive reuse is to alter your laws and your code to encourage (or at least not disincentivize) it. That is something Phoenix has been at work on. You can see a brochure about the city’s own plan here.

Meantime, in Boston, its namesake university has a fascinating piece of journalism on its site that describes the transformation of a main street into what it is today. Once the site of scores of auto dealers and auto-accessories shops, it has become a boulevard welcoming to cars but also to cyclists, pedestrians, and the City’s iconic T subway.

On the site, writer Patrick L. Kennedy explores that street’s transformation. (The site itself is a marvel; click through, at least, to view the brief videos and the sliding-bar effect that lets you view the old and new streetscapes right next to each other.)

One of the fascinating old structures that might have met the wrecking ball in another city is seen below. The building once held an automobile showroom. Now, the BU School of Theatre makes its home there, and it left intact much of the impressive artifacts—one of which are gargoyle-like figures high on the walls that honor mechanics rather than supernatural beings.

Boston University School of Theatre building, once an auto-dealership.

Boston University School of Theatre building, once an auto-dealership.

Yes, that is a mechanic gargoyle in the Stone Gallery. It and many others line the high ceiling in a space now used for education.

Yes, that is a mechanic gargoyle in the Stone Gallery. It and many others line the high ceiling in a space now used for education.

In that magazine column, I was able to share only one image (that very cool decades-old Flxible tour bus, also pictured above). So I thought it would be terrific to share more images here from the Boston adventure. Here are a few more.

Currently, Phoenix seeks to emulate the success of places like Boston that have installed “parklets”—repurposed parking spaces that now accommodate non-car uses. Dozens of cities have already discovered that altering their laws to permit these spaces creates a more vibrant streetscape, which benefits the businesses nearby and adds to residents’ value.

This is just one example of many that businesses have taken when they install public parklets in Boston.

This is just one example of many that businesses have taken when they install public parklets in Boston.

Boston parklets, branded

Boston parklets, branded

A parklet reminder that the space has no predefined use.

A parklet reminder that the space has no predefined use.

The somewhat odd debate is occurring in Phoenix right now as to whether the city should have both public and private parklets. As seen in the images below, Boston’s are public—as are the parklets of 99 percent of the cities out there that have adopted this unique tool. (Is it an Arizona thing to imagine that higher benefits flow from passing public amenities on to the private sector? Hmm.)

In case there was any doubt, signage makes clear that all parklets are public (and not just for a business's customers).

In case there was any doubt, signage makes clear that all parklets are public (and not just for a business’s customers).

Also occupying former car space are wildly successful bike-share stations. They can be found at dozens of places around the city, which makes hopping on—and then off—an easy task.

Boston bike-share occupies space formerly used for cars.

Boston bike-share occupies space formerly used for cars.

Of course, adaptive reuse means businesses often live alongside—or above—residential spaces. This image shows multiple floors of retail and commercial (including below-grade) with residences above.

Business and residential together (and yes, that is Insomnia Cookies in the foreground). Boston streetscape

Business and residential together (and yes, that is Insomnia Cookies in the foreground).

And here is another former auto dealer that now markets bagels and other food through its massive plate-glass windows.

Boston adaptive use streetscape

Boston adaptive use streetscape

Finally, I couldn’t help but notice a former incinerator chute—not removed but left to evoke the past—in a university dorm.

Boston: The impulse to retain the past burns bright. An incinerator chute in a Boston University dorm.

Boston: The impulse to retain the past burns bright. An incinerator chute in a Boston University dorm.

 

Boston incinerator 2_opt closeup

Incinerator label closeup

Do you agree there is value in keeping and adapting the past? If you’re a lawyer involved in that effort, write to me at arizona.attorney@azbar.org.

Tomorrow, I’ll share another great adaptive reuse—here in Arizona, and with another legal angle.