NCPA - National Center for Policy Analysis

Trying To Figure Out Labor Department Advisories

February 15, 2000

How broadly or how narrowly do letters from the Labor Department to businesses, giving advice on following its regulations, apply? That's what businesses would like to know and it's the subject of congressional hearings opening today.

The hearings are the result of two recent controversies.

  • One concerns a letter from the Occupational Safety and Health Administration suggesting that the agency would inspect the home offices of employees who chose to work at home.
  • The other involves a Labor Department advisory requiring a company to include stock-option gains in employees' real wages when setting overtime pay -- an almost impossible task, firms say.

Business groups charge that the letters are imposing onerous requirements in areas that were not subject to regulation before. Republican lawmakers see the letters as an attempt by the Clinton administration to put in place policies that would never get congressional approval.

Labor officials counter with the argument that the advisories "are not legally binding." But business groups point out that if companies ignore the advisories, they are subject to criminal or civil liabilities.

The Department contends that when an advisory letter is sent to one company, the policy only applies to that company and no others -- a position a Chamber of Commerce executive describes as "simply asinine."

Source: Yochi J. Dreazen, "Congressional Hearings Try to Define Meaning of Labor Department Advice," Wall Street Journal, February 15, 2000.


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