With the country continuing to turn the corner on the pandemic, questions of economic recovery continue to be front and center. And as the Biden Administration continues to work to advance its agenda there are certainly troublesome signs for what lies in store.
Emblematic of these signs is the nomination of a former Obama appointee to once again head up a key, even if not well known, office at the U.S. Department of Labor (DOL).
The move to reinstate David Weil to be Administrator of the Wage and Hour Division (WHD), an essential office that is responsible for enforcing all major labor laws. The WHD office’s current budget is about $300 million, and the Biden Administration is requesting for an additional $30 million for the WHD for Fiscal Year 2022.
Weil’s nomination is garnering an increasing amount of attention thanks mostly to his past performance as WHD Administrator from 2014 to 2017 under President Obama. His history shows that he is likely to move to unilaterally impose should Democrats be unable to legislatively push through the PRO Act, a multifaceted bill widely recognized as a giveaway to big union bosses.
Indeed, Weil’s track record is littered with onerous, misguided, and harmful regulatory practices that, if he is given another shot at the same job, are certain to cause even more damage this time given the tenuous economic conditions the country finds itself in. And his preferred policy choices will hurt workers, small businesses, and underserved communities—precisely the folks who the Biden Administration claims to want to protect.
As WHD Administrator, Weil was responsible for targeting independent contractors, instituting an unlawful rule on overtime regulations, and an egregious expansion of the “joint employer” rule which seemed designed to target franchisers, a business model for which Weil has special animosity.
Weil’s worldview and actions revels a deep-seated hostility toward free enterprise, and a related ignorance of, or perhaps indifference to, the benefits for workers of the business sectors he wants to weaken. The Wall Street Journal summed it up in 2013, describing Weil as a “life-long, left-wing academic with labor-union sympathies, no private-sector experience or legal training, and limited management experience.”
For years, Weil has promulgated an idea known as the “fissured workplace” theory, which blames franchising, outsourcing, and independent contracting for the bulk of economic challenges facing workers.
Such a viewpoint ignores the millions of Americans who have willfully chosen to seek opportunity in gig economy work as independent contractors, specifically for the unique flexibility in work hours, for example. Weil’s writings and statements show his disdain for virtually all independent contractor arrangements. In fact, as WHD Administrator he moved to have the Department reject the longstanding legal precedent previously used by the Department and enshrined in case law.
Franchising is another business model routinely targeted by Weil. In 2016 he was responsible for pushing for issuing an “Administrator’s Interpretation” of a long-standing interpretation of the Fair Labor Standards Act (FLSA) which would have imposed legal responsibility for certain working conditions on national franchisors by classifying them as “joint employers” of their franchisees’ employees, despite that franchisors rarely have direct control over terms and conditions of franchisee workers’ employments.
What is of course most troubling is that Weil’s blatant agenda has effect on Americans looking to take advantage of opportunities provided in gig economy, independent contracting, and related small business opportunities. The 21st century reality is that millions of workers are purposefully choose to perform independent contracting work to make a better living for themselves and their families. That includes underserved communities such as Latinos, who represent an outsized share of America’s independent contractors, meaning that they would be disproportionately harmed by the types of radical regulations pushed by Weil.
Franchising too, has provided increased economic opportunity for small business entrepreneurs and workers, including in underserved communities. In fact, a recent industry report documents that “there is a higher minority ownership rate among franchised businesses than in non-franchised businesses: 30.8 percent of franchises were owned by minorities, compared to 18.8 percent of non-franchised businesses.” Latino business owners, for example, own 10.4 percent of all franchised businesses, compared to 7.2 percent of non-franchised businesses.
The good news is that Weil’s nomination is not guaranteed. The U.S. Senate Committee on Health, Education, Labor, and Pensions (HELP) is scheduled to hold a hearing on Weil’s nomination this coming Thursday, July 15.
With Weil seeking to return to his previous post, it will provide Senators on the committee with an opportunity to dive into the concrete actions and practices he implemented as head of the Wage and Hour Division at the Department of Labor. Certainly, pointed and assertive questioning about the wake of economically damaging regulations that Weil left behind is warranted. If there could be any doubt left, the nomination process should shed more light on why Weil’s agenda is imprudent at best, and therefore will certainly give even more reason for Senators to reject his nomination.
Mario H. Lopez is president of the Hispanic Leadership Fund, a non-partisan public policy advocacy organization that advances liberty, opportunity, and prosperity for all.