Lawmakers Want to Dramatically Raise Fines on Labor Law Violators

A new congressional report outlines how weak fines for labor violations—even when workers are injured—encourage breaking the law.

By Jordan Zakarin, More Perfect Union

At the end of 2023, McDonald’s sent out a survey to its nearly 2,000 franchisees across the country. Under pressure from activists, the nation’s largest fast-food chain said the results of the survey would inform an effort to curb the skyrocketing number of child labor law violations committed in its restaurants. 

But while the new training modules teased by the company may help franchisees understand the regulations, the economic incentives to violate them are still in place. Even the most egregious cases are met by minuscule penalties; after a 15-year-old McDonald’s worker in Tennessee suffered severe burns while using a deep fryer last year, the Department of Labor fined the McDonald’s franchise a paltry $3,258.

McDonald’s is hardly alone. For employers across the country, fines levied by the Department of Labor have become a minor cost of doing business, according to a new congressional report — even when labor law violations cost workers their lives. 

In some cases, penalties have not been updated since President George H.W. Bush was in the White House, while others date back to the second Bush administration. Paired with budget cuts to the DOL and its agencies that have reduced their enforcement capabilities, there is little to prevent businesses from regularly ignoring federal labor law. Over the past decade, they have done just that, leading to a spike in some of the most serious violations. 

The report, published by Democrats on the House Committee on Education and the Workforce, paints a grim picture of corporate rulebreakers run amok, unburdened by regulators. “Penalties for killing a worker or child, stealing workers’ hard-earned pay, or denying the proper coverage of workers’ mental health care pale in comparison to other laws,” the report asserts. 

Businesses can be fined up to $17 million by the Federal Trade Commission for producing a defective toy, for example, but just a maximum of $15,629 for hiring a child to work in the plant where it is manufactured. 

Such an insignificant penalty helps to explain why child labor violations have skyrocketed over the past decade, from 1,102 in 2015 to 5,792 in 2023. Employer negligence that leads to the serious injury or death of a child laborer can incur a maximum penalty of $71,131. And unsurprisingly, the number of workers under the age of 18 suffering workplace injuries and illnesses has nearly doubled over the past decade, according to the report. Rollbacks of state-level protections for underage workers in Iowa, Arkansas, Florida, and more are likely to fuel a further increase. 

It is hardly better for adult workers. Employers face a maximum $16,131 penalty for subjecting workers to very dangerous conditions, a meager sum that is rarely even assessed. Last year, OSHA fined companies an average of $4,597 for dangerous violations. 

When workers die on the job, an employer can be fined up to $160,000, but the median penalty assessed last year was just $14,000. As the report notes, that is less than the median car allowance that companies offered to their CEOs last year. And between 2017 and 2022, the average fine for failing to prevent heat-related deaths was a mere $8,500; Texas and Florida, two of the hottest states in the country, have passed legislation in recent years preventing local governments from implementing heat protections for outdoor workers. 

For employers that do not care about their employees’ job satisfaction or financial well-being, there is perhaps no better investment than union-busting. The National Labor Relations Board is barred from fining companies that commit unfair labor practices such as harassing workers engaged in union organizing. Even corporations like Starbucks and Amazon that regularly break the law by firing workers for organizing can only be found liable for back pay and expenses caused directly by unemployment.

The money saved allows employers to spend even more on so-called “union avoidance” firms that lead crackdowns on organizers. Companies collectively spend an average of $433 million per year on these union-busters, according to the report, while last year, the NLRB reported a 10 percent bump in unfair labor practice charges.

“Additionally, for other serious violations, such as illegal threats to close the workplace if the union prevails, employers are merely subjected to a cease-and-desist order and directed to post a notice in the workplace,” the report notes.

At the same time that federal labor law has drifted further into obsolescence, anti-worker state legislatures have begun to more aggressively undermine what protections do exist. On top of encouraging the hiring of young, easily-exploited teenagers and preventing local governments from implementing their own worker protections, some Southern right-to-work states have banned state subsidies for companies that voluntarily recognize unions, further incentivizing companies to fight unionization. 

The House Democrats’ report concludes with a call to raise the civil penalties — or in some cases, institute them to begin with — so they become actual deterrents to breaking labor law. The committee also plans to introduce bills that would provide more protection to workers, according to committee sources, though Republican control of the House will likely delay action until next year at the earliest.

“Worker rights and protections are not mere suggestions,” the report says. “To ensure workers and children are protected, the cost of violating the law should not amount to a slap on the wrist.”