Attention: DOGE

The U.S. Labor Department's Wage and Hour Division says it needs $294,901,000. It's 'particularly proud' of helping 28,000 people recover an average of $1,464.

Here’s a good one for Elon Musk, Vivek Ramaswamy and the Department of Government of Efficiency to take a hard look at: the U.S. Department of Labor’s Wage and Hour Division.

I bring it up because last week, the agency made a point of highlighting what it frames as successful action by the Wage and Hour Division since January 2021. Here’s the post from X:

If you click through from that post to the article titled “Making an impact for misclassified workers,” you see that it’s written by Jessica Looman, the administrator for the U.S. Department of Labor’s Wage and Hour Division:

Looman makes it abundantly clear in this article that she sees recovery of this $41 million for more than 28,000 workers as something the Wage and Hour Division is particularly proud of achieving, as part of its years-long, highly publicized push in the area of independent-contractor regulatory action and rule-making:

• “We’re particularly proud of enforcing minimum wage and overtime protections for employees who were misclassified as independent contractors.”

• “Since January 2021, we’ve recovered over $41 million in back wages for more than 28,000 workers who were misclassified as independent contractors.”

• “… putting a stop to misclassification of employees as independent contractors has been a priority for the Wage and Hour Division for the past four years.”

• “In addition to enforcing minimum wage and overtime protections and providing compliance assistance to employers, we implemented a final rule in 2024 to revise our guidance on how to analyze whether a worker is an employee or independent contractor ...”

Based on Looman’s comments, let’s do some math.

Clicking on that link about the new independent-contractor rule, and then searching the actual book-length rule in the Federal Register, will show you that the U.S. Labor Department estimates there are 22.1 million independent contractors in the country.

The Department is touting the fact that it recovered back wages for more than 28,000 independent contractors who were misclassified.

What percent of 22.1 million is 28,000?

It’s 0.126696833% of targeted workers who benefitted from this program, according to the government’s own figures.

The figure is even more infinitesimal when you realize those 28,000 people are among the 165 million American workers that this division is being paid to protect. By that math, the percentage of workers who were actually helped is 0.016969697%.

And how much did these Americans actually benefit?

When you divide the $41 million that was collected by 28,000 people, it’s an average of $1,464 per person that the government managed to recover.

A check for $1,464 is not even enough to pay a single month’s average rent in the United States of America.

It’s also unbelievably less than the politicians keep telling us is out there for the government to recover, as they push all kinds of new laws and regulations to redefine independent contractors and stop misclassification. U.S. Rep. Bobby Scott, a Democrat from Virginia—among the most vocal proponents of this narrative—claimed the problem costs workers nearly $4 billion a year in lost wages and benefits.

In terms of what the Wage and Hour Division actually found when it prioritized this area of enforcement and actually went looking for that money, Congressman Scott seems to have been waaaay off.

It’s fair to ask whether taxpayers are getting our money’s worth here, and to ask DOGE to take a hard look under the hood of the Wage and Hour Division.

Politics at Play

Fighting misclassification has not been just any old task in the rotating roster of bureaucratic job duties.

Under Democratic Party leadership, it has been a signature effort at the U.S. Department of Labor Wage and Hour Division and at the state level, too—something we have been told again and again from California to New Jersey to Washington, D.C. must be done because the problem of misclassification is so enormous.

To support this costly effort at taxpayer expense, lawmakers often refer to research by the union-backed National Employment Law Project, which states this:

“… 10 to 30 percent of employers (or more) misclassify their employees as independent contractors, which indicates that several million workers nationally may be misclassified.”

Now, I’ve written before about why that 10% to 30% estimate is suspect. Heck the U.S. Labor Department itself stated back in 2021, during the first Trump administration, that such estimates “appear to be unreliable.”

But let’s roll with it here for argument’s sake. Based on the U.S. Labor Department’s estimate in the Federal Register as of January 2024, during the Biden administration, there are 22.1 independent contractors in the country.

If 30% of those independent contractors were actually misclassified, then the Wage and Hour Division would’ve been able to find 6.63 million people who needed help.

If 10% of independent contractors were actually misclassified, then the regulators would’ve been able to find 2.21 million people.

They instead found and helped about 28,000 people. After nearly four years of looking.

According to the article by Looman, whose taxpayer-funded salary is reportedly more than $180,000 a year, the department is “particularly proud” of this result.

And in fact, the Wage and Hour Division wants even more taxpayer funding to do this kind of work.

If you take a look at the Fiscal Year 2025 Department of Labor budget, the Wage and Hour Division section states:

“The FY 2025 Budget request of $294,901,000 and 1,398 FTE includes a total programmatic increase of $20,818,000 and 187 FTE to maintain current enforcement levels while strengthening the agency’s capacity to address the most vulnerable worker populations and combat child labor.”

Now, admittedly, I’m no expert in how the Wage and Hour Division actually uses (or claims to use) all of that money. And of course, this division does more than deal with cases of misclassified workers. No decent human being thinks that child labor should get a pass.

With that said, given how much this area of misclassification has been prioritized, and given the results that the Wage and Hour Division has shown for its efforts, I’d sure be interested to see if DOGE can figure out how much of that $294,901,000 would be spent to collect the equivalent of $41 million in back wages for 28,000 people.

Maybe I’m missing something in the numbers. Let me know in the comments if you think that I am.

It’s obvious that American workers who are owed back wages and benefits should receive what they are due. I’d wager that Elon Musk, Vivek Ramaswamy and their DOGE team can figure out how to address that problem far more efficiently.

As Musk rightly said, “I think we should be spending the public's money wisely.”