WHD Updates Child Labor Penalty Assessment Procedures

1 N ovem b er 28, 2023 F IEL D AS S IS TANCE BUL LETIN No. 2 02 3 - 4 M EM O RANDUM FOR: R egi on al A d m in i st ra t o rs an d d is tri ct d i rect ors FR O M: Jes si ca L oom an, A d m i n i st rat or S UBJ EC T: C hil d La bo r C iv il Mo n e y P e n a l ty Asse ssm en ts fo r N o ns e r i o us I nj ur y a nd N o ninjur y V io la tio ns I. B a c kg r o und T he f ede ra l chi l d l abor pr ov i s i on s unde r t he F ai r L abor S t andar ds Act (F L S A o r A ct) ens ure t hat w hen young peopl e w or k, t he w ork i s s af e and doe s not j eopar di ze t hei r heal t h, w el l - bei ng, or educa t i onal opport uni t i es. As par t of i t s c hi l d l abor enf or ceme nt eff or t s, t he W ag e and H our D iv is io n (WH D) is c o m m itte d to u tiliz in g a ll a v a ila b le e n f o rc e me n t to o ls to c o m b a t o p p re s siv e chi l d l abor and t o ens ur e t hat t he st at ut or y aut h or i t y to a ss e s s c iv il m o n e y p e n a ltie s is e f fe c tiv e i n bot h penal i zi ng and det er r i ng vi ol at i ons o f th e la w. Th e go a l o f th is Fie ld Assist a nc e Bu lle tin (FAB) is to en su re t h at W HD’s C h ild La b o r C iv il M oney Pe n a lty (C L C MP) asses sment s ar e b ased on the ag ency ’ s s tat ut ory enf o r cemen t a u th o rity a n d th a t th e a g e n c y is a p p r o pria te ly a nd c o nsis te n tly u tiliz in g its f u ll aut hor i t y i n ever y chi l d labor enf orce men t act ion. In f ur t h er an ce of t hes e g oal s a nd as expl ai ned be l ow, t h is F AB i ncl udes new as se s s me nt pr oce du re s f or non se ri o us i nj ur y and noni nj ury C L C M P ca l cul at i ons. T he W ag e a nd H our Di vi s i on revi ews chi ld l abo r co mpl iance as part of ever y F L S A in v es tigatio n, in v es tigate s c h ild la b o r c o m p la in t s, a nd conduct s ag enc y - in itia te d ch ild la b o r i nves t i g at i ons. S i nce 201 9, W HD i nvest i g at i ons ha v e fo un d a n 88% perce nt i ncrea se i n chil dren bei ng empl oyed i n vi ol at i on of t he chi l d l abor pr ovi s i ons of t he F L S A. In f i scal y ear 2 02 3, W HD f ound t hat 955 of t he e mpl oyer s i t i nves t i g at ed ha d vi ol at ed chi l d l abor l aws i mpac t i ng nearl y 5, 800 chi l dr en. On F ebr uar y 27, 2023, t he D epar t ment of L abor announce d th a t it was launch in g a Na tio n a l Str a te gic En f o r c e m e n t In itiativ e o n C h ild La b o r (Stra te gic In itia tiv e) usi ng d a ta - d r iv e n stra te gie s to in itiate in v e s tig a tio n s th a t a re lik e ly to uncove r chi l dr en empl oyed i n vi ol at i on of t he c h ild l abor pr ovi s i ons of t he FLSA, 29 U.S.C. 212(c), an d use al l o f its avai labl e enf or cement tool s,

2 i ncl udi ng CL C MP as se s s me nt s and i nj unct i ons s t oppi ng t he movem ent of g oods made w i t h chi l d l abor (hot g oods ac t i ons), t o hol d emp l oyer s a cc ount abl e f o r t hose vi ol at i ons and to det er f ut ur e vi ol at i ons. A s p ar t o f its Stra te gic I n itia tiv e, WH D earl i er t hi s year i ssu ed F ie ld A s sis ta n c e B u lle tin (FAB) 2023 -3, P rohi bi t i on s aga i nst t he s hi pme nt of “ Hot G oods ” und er t he C hi l d L abor P rovi si ons of t he F ai r L abor St andar ds A ct, to pr ovi de g ui danc e t o W H D f i el d s t af f on ho w t he ag ency u tilize s its aut hor i t y t o bri ng “hot g oods” acti ons un d er s ect i on 212 (a) of t he F L S A t o addr es s oppr es s i v e chi l d l abor i n suppl y chai ns. Th is Chi l d L abor C i vi l Money P enal t y A sse ssmen t s f or N onse r i ous I nj ury and N oni nj ury Vio la tio n s FA B, wh ic h is a ls o b eing issue d a s pa rt o f W HD’s Stra te g ic In itiativ e, id e n tif ie s th e pr ocedur es an d pract i ces th a t WHD f o llo w s when asse ss in g C L C MPs i n nons er i ous a nd noni nj ur y cas es under sec t i on 16 (e)(1)(A) (i) of t he F L S A, 29 U. S.C. 216(e) (1)(A) (i), a n d its i mpl em ent i ng r eg ul at i ons a t 29 C.F.R. P ar t 579. Th is FA B shoul d be r ead i n conj unct i on wi t h th e A sse ssmen t o f C h ild La b o r C iv il M o n e y Pe n a ltie s F ie ld A s sis ta n c e B u lle tin 2 0 1 6 - 5 (December 201 6), which has been a me nded t o not e th e se c tio n s th a t have b een supe r s ed ed by th is FAB. T he pr ocedur es and pr act i ces cont ai ned i n t hi s F AB wi l l appl y t o chi l d l abor C M P as ses sm ent s beg i nni ng on T uesda y, N ovember 28, 2023. P re vi ousl y, W H D pract i ce was t o a sses s C L C M P s i n nons er i ous i nj ury a nd noni nj ur y cas es by a s sign in g a n in itial C MP amount f or a par t i cul ar t ype of chi l d l abor vi ol at i on t hat r ef l ect ed t he ag en cy’s c o n s id e ra tion of t he g ra vi t y of a g iven v io la tio n. Th e s e in itia l C MP amount s coul d be i ncr eas ed or decr eas e d bas ed on t he si ze of t he busi ness or w het her t he vi ol at i on was w illf u l o r r epeat ed, but t he pr i or pr act i ce di d not giv e f u ll e f f e c t to t he D epar t ment ’ s aut hori t y under t he s ta tu te. 0F 1 T he pr evi ous pol i cy als o lim ite d t he a s s es s me n t s i n nons e ri ous and noni nj ur y cas es by appl yi ng t he s t at ut or y maxi mum on a per chi l d basi s r at her t han th e per vi ol at i on bas i s pr e scr ibed b y th e sta tu te. A d d itio n ally, t he pr evi o us po l i cy lim ite d the a ssess m en ts f o r h ot go ods cas es on a per i nvest i g at i on bas i s r at her t han a pe r shi pme nt or de l i ver y f or s hi pme nt, and r ecor dkeepi n g vi ol at i ons on a p e r in v e stiga tio n b a sis ra t he r t han on a per em pl oyee basi s, w hi ch lim ite d th e a ge n c y ’s a u th o r ity as se t f o r th in th e s ta tu te and r eg ul at i ons, s ee 2 9 C.F.R. 579.3(a) (1), (5). T he s ect i ons of F AB 2016 - 5 whi ch aut hor i zed t hose pra ct i ces and a d m in istra tiv e lim ita tio n s are s uper s ede d by t hi s F AB and t he onl i ne char t s have bee n di sc ont i nued to en sur e t he ag enc y’s f ul l st at ut ory a nd r eg ul at or y aut hori t y t o as ses s C L C M P s. 1 Th e F ede r al C i vi l P ena l t i es Infl at i on A dj us t ment Im prove ment s A ct of 2015 (I A A), P ub. L. 114 - 74, s ec. 701, re q u ired a g e n c ie s to a d ju s t CMP le v e ls f o r in f la tio n th ro u g h a n in itia l adj us t ment by Aug us t 1, 2016, fol l ow ed by a nnual adj ust me nt s eve r y Janua ry t her eaf t er. In acc orda nce wi t h t he IA A, on Jul y 1, 2016, t he D epar t ment of L abor publ i she d an I nt er i m F i nal Ru le m a k in g th e in itia l a d ju stm e n ts to a ll CMPs a ss e s se d in s ta tu to r y p r o gra m s th a t it a d m in iste rs, i ncl udi ng C L CM P s, wi t h t he adj us t ment s eff e ct i ve Aug us t 1, 2016. As r equi re d by t h e I AA, t he Depart ment als o adj u st s C L C M P s for i nf l at i on ever y Ja nuar y. F o r m o re i nf or mat i on about t he I AA and t o vi ew t he cur r ent C L C M P l evel s, vi si t ht t p: / / ww w. dol.g ov/ w hd/ f l sa / i ndex. ht m#c mp.

3 T hi s F AB al so updat es t he pr oce dur es t hat ar e us ed t o consi der whet her CM P r educt i ons ar e war rant ed bas ed on t he empl oyer ’s si ze of bus i nes s. II. S t at u t ory A u th ori zat i on t o As ses s Civ il M o n ey P en al tie s for Ch i l d Lab or V i ol at i on s T h e FLSA cont ai ns t w o s epa r at e pr o vi s i on s th a t aut hori z e the assessm en t of CL CM Ps. See 29 U. S. C. 2 1 6 (e)(1)(A). T hi s F AB di sc uss es t he appl i ca t i on of t h e FLSA’ s C L CMP p e n a lty pr ovi si on at sec t i on 16(e) (1) (A) (i) (ref e rred to as non - CL EPP), wh ich cur re nt l y pr ovi de s f o r a C M P up t o $15,138 for e ac h chi l d l abor vi ol at i on. E nact ed i n 2008, s ec t i on 16(e) (1) (A) (i i) ’s enhanc ed penal t y provi si on (re f e rred to as t he C hi l d L abor E nhanced P enal t y Pro g ra m, o r C LEPP) cur r ent l y pr ovi des f or a penal t y of up t o $68,801 f or each c h ild lab o r v io la tio n th a t caus es t he de at h or s er i ous i nj ur y of an empl oyee under t he ag e of 18. F or mor e i nf or mat i on abou t CL E P P, pleas e ref er t o th e Assessme nt of Ch ild La b o r Civ il Mo n e y Pe n a ltie s Field A ss is ta n c e Bu lletin 2 0 1 6 - 5 (Dec ember 2016), as amended. S ec t i on 16(e) (3) of t he F L S A re qui r es W HD t o consi der whet her a C M P asse ssmen t i s appr opr i at e g i ven (1) t he si ze of t he bus i ness and (2) t he g ra vi t y of t he vi ol at i on. W ag e and H our ’s r eg ul at i ons at 29 C. F.R. 579. 5 i nt er pr et i ng t hi s s t at ut or y di re ct i ve pr ovi de g ui dance r eg ar di ng bot h as pect s of t he s t at ut ory m anda t e. A. C a lc ula t in g C iv il Mo n e y Pe na ltie s fo r N o ns e r io us I nj ur y a nd N o ninj ur y C hil d La bo r V io la t io ns In o rd e r to f u lly u tiliz e its sta tu to ry an d re gu la to r y a u th o rity, w h e n a ss e s sin g C L CMP s in nons er i ous i nj ury 1F 2 and noni nj ury c ase s, t he ag ency w i l l no l ong er d e te r m in e CL CM P asse ssmen ts on a p e r c h ild b as is. Inst ead, t h e ag en cy wi l l as sess C L CM P s p er v io la tio n as a u th o riz e d in th e s ta tu te. Fo r in sta n c e, if t here ar e thr ee separat e viol at ions r elat i ve to a chi ld’ s em pl oyment (suc h a s t wo haza rdous occupat i ons or der s vi ol at i ons a nd one r ecor dkee pi ng v io latio n), t h e empl o yer w il l b e as ses sed t h r ee sepa r ate C M P p enal t i es, each o f whi ch can reach t he s t at ut ory m axi mum. T he ag ency w ill u s e th e f o llo wing m e th o d olo g y, whi c h i ncor p ora t es th e P ar t 579 g ra vi t y f ac t or s a t 29 C.F.R. 579. 5 (c), to c a lc u la te a n in itia l C M P amount f or all nons er i ous i nj ur y an d noni nj ur y chi l d l abor vi ol at i ons, i ncl udi ng r ecor dkeepi ng and hot g oods v io latio n s. Af t er t he g ravi t y f act o r s hav e be en con si de red, t h e ag en cy w ill next consi der t he app r op r i at ene ss of t he C L C M P r el at i ve t o t he si ze of t he bus i ness and will a d ju s t percent ag es based on t he r eg ul at or y s i ze of busi nes s fac to rs (se e Ch a rt Belo w, P a rt C). Fin a lly, th e a ss e s sin g o f f ic ia l w ill i ndepende nt l y cons i der whet her t he CL C MP asse ssed ach i eves t h e object i ves of t he Act. N o 2 Nons er i ous i nj ury me a ns any i nj ur y t hat r equ i r es t re at men t no mor e ext e ns i v e t han f i r st ai d a nd r esul t s i n t he yout h mi s si ng sc hool or wor k, or havi ng t hei r norm al act i vi t i es cur t ai l ed, f or l ess t han 5 days. T he t er m fir st a id means any one - tim e tre a tm e n t, e v e n if it is p ro v id e d b y a phys i ci an or ot her l i cens ed or r eg i st er ed me di ca l pr ofe ss i o nal, a nd eve n i f i t i s pe r f orm ed at t he pl ace of empl oyment.

4 e m p lo y e r w ill b e a ssessed mor e t han t he m axi mu m C L C M P under s ect i on 16 (e)(1)(A)(i) of t he s ta tu te whi ch i s c ur r ent l y $15, 138 per vi ol at i on. i. A p p l yi n g t h e Re gu l at ory F act ors t h at As ses s t h e G ravi ty of N on ser i ou s In ju ry a nd No ninj u ry V i ol ati on s CM P a ssessme nts i n non - C L E P P cases are ass essed un der th e A c t’s CL C M P p ro v isio n at se c t io n 1 6 (e)(1)(A)(i) of th e Ac t, 2 9 U. S. C. 2 1 6 (e)(1)(A)(i). As exp l ai ned above, se c tio n 16(e) (3) o f t h e FLSA, 29 U.S.C. 2 1 6 (e)(3), re qui r es t he ag ency t o consi der t he g r avi t y of t he vi ol at i on w hen as se ss i ng CL CM P s, a s t h e ag en cy has i ncl uded in its re gu la tio n s a t 2 9 C. F.R. 579.5 (c). In c a lc u la tin g th e in itia l C M P a m o u n t re la tiv e to th e gra v ity o f a p ar tic u la r v io la tio n, WHD w ill u tiliz e th e sta tu to ry maxi mum non - C L E P P C M P (c ur re nt l y $15,13 8) and th e n i n cr ease or decreas e t he amo unt of t h e C M P based on ag g ravat i ng o r m itig a tin g f act s in each matt er (re cog ni zi ng t hat under t he s t at ut e, t he non - C L E P P CM P coul d not ex ceed $15, 138 per v io latio n). F or each r eg ul at or y gra v ity f act or i n 29 C.F. R. 579.5(c) WHD ha s a ssi g n ed a percent ag e by w hi ch th e maxi mu m pos s i bl e no n - C LEPP C MP may b e i ncreas ed or decr eased in th e process of cal cu l at in g t he a ssessme nt amo u nt. E ach adjust ment p er cen t ag e app l i es t o every v io latio n re la tiv e to a p a r tic u la r c h ild ’s e m p lo y m e n t. R egu l ator y Gravi ty F act or s A dj us tme nt % F a ct o r 1 - Rep eat ed V i ol at i on s: Has the em pl oyer pr evi ousl y bee n f ound by W HD t o have vi ol at ed t he c hi l d l abor provi si ons of t he F ai r L abo r S tandards A ct at 29 U. S.C. 212? A ggravat e +20% if th e empl oyer has been f ound by W H D t o have pr evi ousl y vi ol at ed t he chi l d l abor la w s at 29 U.S.C. 212. F a ct o r 2 - W illful ne s s: Are th e v io la tio n s w illf u l (w a s th e r e evi d ence t hat t he em pl oyer knew t hat i t s ac t i ons w er e unl aw f ul or s howe d r eckl es s di s re g ar d f or t he c hi l d l abor r equi r em ent s, or di d t he e mpl oyer f a il to ta k e r eas onabl e pr ecaut i ons t o avoi d vi ol at i ons)? A ggravat e +20% f o r w illf u l v io la tio n s o f c h ild lab o r la w s at 29 U.S.C. 212. F a ct o r 3 - N umbe r o f M ino r s E mplo y e d: Ho w ma ny mi nor s w er e unl aw f ul l y empl oyed? A ggravat e +10% i f 3 or mor e mi nor s a t th e e s ta b lis h m e n t are em pl oyed in v io la tio n of chi l d l abor l aws. F a ct o r 4 - Age of M i n ors: (1) W h et her th e mi nor was empl oyed bel ow t he l eg al ag e of em pl oyment (14 for bot h ag ri cul t ur al and nonag r i cul t ur al em pl oyme nt unl es s an exce pt i on appl i es) or (2) w het her t he empl oyer kept re cor ds of t he r equ i r ed pr oo f of ag e f or t he mi nor. A ggravat e +20% f o r m i nor s empl oyed un der t h e l eg al ag e f or em pl oyment and whe re no exc ept i on appl i es. + 1 0 % i f t he em pl oyer f ai led t o k eep record s of ag e, see 29 C.F. R. 516. 2(a) (3).

5 F a ct o r 5 - Hazard ou s W ork: W ere t he mi nor s em pl oyed i n vi ol at i on of a H azar dous O ccupa t i ons O r der (H O) or an occupa t i on pr ohi bi t ed by 29 C.F. R. 570.33 - 34 (Re g. 3 o ccupati on or der)? A ggravat e +20% if th e mi nor wa s em pl oyed i n vi ol at i on of a H O or a R eg. 3 occupa t i on or der (s ee 29 C.F.R. 570.33 - 34). Mitig a te - 10% whe n t he mi nor has not been em pl oyed i n vi ol at i on of an HO or R eg 3 occ upat i on or der. F a ct o r 6 - R e s ult a nt I njur y: T he expos ur e of s uch m i nor s t o haz ar ds a nd any r es ul t ant i nj ury t o suc h mi nor s A ggravat e + 25% i f t he m i nor empl oyed i n vi ol at i on s uf f er s a nons er i ous in ju ry. Mitig a te - 10% if th e r e is no i nj ur y and t he mi nor has not been empl oyed in an H O or R eg 3 o cc upat i on orde r. Fo r r e su lta n t seriou s in ju r ie s /fa ta litie s see Fie ld A ss is ta n c e Bu lletin 2 0 1 6 - 5, As se s s me n t o f Ch ild La b o r Civ il M o n e y Pe n a ltie s. F a ct o r 7 - Du rat i on of I l l egal E mpl o y me nt: Ho w l o n g was the mi nor empl oyed i n vi ol at i on o f th e Ac t? Mitig a te - 10% i f mi nor w as empl oyed i n vi ol at i on f o r 1 we e k or l ess, but not i f mi nor wor ked i n vi ol at i on of an HO. F act or 8 – Hou rs of E m p l oym en t: Wh a t tim e of day di d t he vi ol at i ons occ ur, i ncl udi ng w het her i t wa s dur i ng or out si de of sc hool hour s? Mitig a te - 10% M i nor i s ei t her not s ubj ect t o t he hour s s t andar ds (e.g., yout h over t he ag e of 16) o r, if s ubj ect t o t hose s t andar ds, di d not per f or m wor k dur i ng s chool hours or (i f nonag ri cul t ura l em pl oyment and t he chi l d i s young er t han 16 yea r s o f a ge) bet w een 10P M - 6 A M. ii.. A p p l yi n g t h e R egu l at ory Siz e o f B us ine s s F act ors t o Non s eri ou s I nj ur y a nd N on i n ju ry V i ol at i on s S ect i on 16(e) (3) o f t h e FLSA a ls o di r ect s t h e ag ency t o co nsi der t he si ze o f busi n ess i n asses si n g CL CM Ps, as t h e ag en cy descr i bes i n i t s r eg ul at i ons at 29 C.F.R. 579. 5(b). Th is FAB e sta b lish e s new proc edur es f or t he cons i der at i on of s i ze of busi nes s r eg ul at or y f act or s in a ll C L CMP as ses sm ent s, i ncl ud i ng C L E P P and N on - C LEPP f a ta lity a n d s e rio u s in ju ry c a s e s. T h ese f act ors ar e t ak en i n t o acco unt af t er t he in itial CL CM P am ount has been cal cu lat ed ba s ed on t he g r avi t y of t he vi ol at i ons. E ach si ze of busi n es s f act o r i s consi dered separat el y a ga in s t th e in itia l c a lc u la tio n re s u ltin g f ro m a p p lica tio n o f th e gra v ity c h a rt above. T he s ec t i ons of F AB 2016 - 5 w hi ch c o n f lic t w it h t hes e new proc edur es h ave been super se ded by t hi s docum ent.

6 E v en af t er t h e cr i t eri a set f o r th i n the g ravi t y and si ze of b usi ness chart s ar e app l i ed, t he as ses si ng of f i ci al must i ndependent l y cons i der t he s i ze of t he bus i ness and t he g r avi t y of t he v io latio n, a s we ll a s th e r e g u la to ry f a c to rs in s e c tio n iii. b e lo w, w h e n d e te rm in in g th e u ltim a te C L CM P as se s s me nt. F or exa mpl e, i t may not be a ppr opri at e t o r educe t he C M P bas ed on si ze of busi ness i n cas es w i t h t he mos t eg re g i ous (hi g hes t l evel of g r avi t y) vi ol at i ons, such a s ca s es t hat i nvol ve t he de at h of a y o un g w o rk e r or a n ext r em el y ser i o us i nj ur y, see F AB 2016 -5. O th e r f a c to r s, s u c h a s w h e the r th e v io la tio n wa s w illf u l o r re p e a ted, w he t her t he em p l oye r conc eal e d o r f a ls if ie d th e v io la tio ns, a n d w h e th e r, if th er e is a ser i ous i nj ur y, t her e i s onl y one, sho ul d be t ak e n i nt o acc ount bef or e r educi ng t he C M P ass es s me nt bas ed on t he s i ze of t he busi ness. S ta tu to r y S i ze o f Bu sin ess Facto r s A dj us tme nt % F act or 1 – T he number of empl oyees empl oy e d. 20% r educt i on f o r an empl o ye r when t here are fewe r t han 5 em pl o yee s. 1 5% r educt i on f or an empl oyer wi t h bet w ee n 5 an d 25 empl oy ees. F act or 2 – Annual dol l ar vol ume of s al e s o r bus i nes s done. U p t o 25% r educt i on i f t he cal cu l at ed CM P ex ceeds 3% o f t h e com pany’ s a nnual dol l ar vol ume of s al es f or t he mos t re cent l y complet ed year f or t he en t erpr is e. T he a mount of t he r educt i on shal l not exce ed wha t i s ne ces s ar y t o br i ng t he c a lc u la tio n t o 3% of t he ADV. F act ors 3 an d 4 – A mount of ca pi t al i nves t ment and f i na nc i a l r esour ce s, a nd such ot her i nf or ma t i on as may be av ai l abl e. re la tiv e to th e s iz e o f th e bus i nes s of s uch per s on. A ddi t i onal 10% r educ t i on i f emp l oy er prov i des addi t i onal evi denc e of in a b ility to p a y. Ex a m p les illu s tra tin g a p p lic a tio n o f g r avi t y and s ize of bu si ness char t s: E xampl e 1. W H D conduc t s an i nves t i g at i on of an e mp l oy er wi t h 30 em pl o yee s and an AD V of $3.5 m i l l i on. W HD conc l ude s t hat a chi l d ag ed 16 and el ev en mon t hs ha s bee n empl oy ed by t he em pl oyer f or ni ne mont hs t o per f o r m r oofi n g wor k i n vi ol at i on of HO 16 i n re ckl ess di sr eg ar d of th e c h ild la b o r la ws. T he vi ol at i ons ar e not re pea t ed. U sin g th e cal cul at i on met hodol og y in th is FAB th e f o llo win g percent ag es are added t o or s ubt r act ed f r om t he s t ar t i ng poi nt of 100% of t he st at ut ory m axi mum f or non - CL EPP CL CM P asse ssmen t: G ra vity C a lc u la tio n: G r avi t y F ac t or 2 (w i l l f ul vi ol at i on + 20%), G r avi t y F act or 5 (haz ar dous w or k + 20%), G r avi t y F ac t or 8 (not subj ec t t o hour s s t andar ds - 10 %) i s cal culat ed as $15, 138 x 1 3 0 % = $ 19,679 p er v io la tio n

7 S iz e o f Bu sin e s s Ca lc u la tio n: Becaus e t h e empl o yer has 30 emp l oy ees S i ze F act or 1 i s not a p p lica b le. B ec aus e 3% of t he em pl o yer ’s A D V i s $105,000 F act or 2 i s not appl i cabl e. Unless t he em pl oyer pr ovi de s addi t i on al evi d enc e und er f a ct ors 3 and 4 no r edu ct i on wi l l be m ade bas e d on t he s i ze of bus i nes s. A ssessme nt: W hi l e t he ca l cul at i on woul d r esul t i n an amount of $ 19, 679 x 1 vi ol at i on, t he a s se s s m e n t f o r th is v io la tio n is s ta tu to r ily c a p p e d an d ther efore t he asses sm ent calcu l ati on r esul t s in a C L CMP o f $15,138. E xampl e 2. W H D conduc t s an i nves t i g at i on of an e mp l oy er wi t h 15 em pl o yee s and an AD V of $5 mi l l i on. W HD conc l udes t hat t wo 15 - y ea r - o l ds w er e emp l oye d f or t hre e mont hs i n vi ol at i on of t he chi l d l abor l aw s bec aus e t hey w er e e mpl oyed t o wor k unt i l 9: 30 on school ni g ht s. Th e v io latio n s we r e i dent i ca l f or bot h mi nors. Th e v io la tio n s a r e n o t r e p e a te d o r w illf u l. U sin g th e cal cul at i on met hodol og y in th is FAB th e f o llo win g percent ag es ar e added t o o r s ubt r act ed f r om t he st ar t i ng poi nt of 100% of t he st at ut or y ma xi mum f or non - C LE PP CL CMP asse ssmen t: G ra vity C a lc u la tio n: Gr avi t y F ac t or 5 (no ha za r dous w ork - 10%), G r avi t y F act or 6 (no i nj ur y - 10%), G r avi t y F ac t or 8 (t i me of day - 10%) i s cal cu l at ed as $15,138 x 70% = $10,597 CL CM P p e r v io la tio n S iz e o f Bu sin e s s Ca lc u la tio n: Becaus e t h e empl o yer has 15 emp l oy ees S i ze Fa c to r 1 is a p p lica b le. Because th e C M P does not exce ed 3% of t he e mpl oyer ’s AD V o r $90,000 in th is example, no f urt h er r edu ct i on s ar e made bas ed on t he s i ze of t he bus i ness unl ess t he empl oyer pr ovi des addi t i onal evi dence unde r f a ct or s 3 a nd 4. S iz e o f Bu sin e s s Ca lc u la tio n: $10, 597 CL CM P x 85% = $9,0 07 CL CM P p e r v io latio n Assessm en t: Ba s ed on $ 9, 00 7 x 2 vi ol at i ons, t he a ssessme n t c a lc u la tio n r e su lts in a C L CMP o f $18,014. i ii. A ddit io na l Regu l ator y Con si d erat i on s for asse ssi ng CL CM Ps B ef o r e maki ng t he f i nal det er mi nat i on of th e CL C MP asse ssmen t, t h e WHD assessing o f f icial w ill f o llo w th e gu id an c e in t hi s docum ent as w el l as ot her i nt er nal g ui dance a nd us e t hei r i ndepende nt j udg ment t o e n s u re th a t a ll th e re q u is ite i nf or mat i on about t he e mpl oyer, si ze of bus i nes s, and t he v io la tio n (s) has bee n t aken i nt o cons i der a t i on and accu rat el y en t er ed in t he ca s e manag ement syst em. Th e a s s e ss in g o ff ic ia l m u s t ensu re t h e f acts o f t h e part i cular case j ust if i es t he as se s s me nt of t he C M P and mus t i ndepende nt l y cons i der whet her t he C M P ass es s me nt achi eves t he obj ect i ve s of t he Ac t, i ncl u di ng cons i der a t i on of t he r eg ul at ory l ang uag e bel ow (S ee 29 C.F.R. 579.5(d)): • w het her t he c hi l d l abor vi ol at i on i s de m i ni mi s, t he empl oyer has g i ven c r edi bl e ass urances of f u t ure compli ance, and whether a CM P i s necessar y to achi ev e t he o b jec tiv e s o f th e A c t; o r • w het her t he e mpl oyer has no pr i or hi st or y of CL vi ol at i ons, t he vi ol at i ons i nvol ved no i nt ent i onal or heedl ess expos ur e of any mi nor t o any obvi ous ha za r d and we re

8 i n advert ent, t hat t here ar e credi b l e assur an ce s of f utur e co mpl i ance, and whether a CM P i s necessar y t o ach i eve t he ob j ect i ves of t he Act. III. A ddit io na l c o ns ide r a ti o ns f o r Hot Good s an d Re cor d k eep i n g Vi ol ati on s A. Hot Good s P l ease ref er to Fie ld A ss is ta n c e Bu lle tin (FA B) 2 0 2 3 - 3, P rohi bi t i ons agai nst t he s hi pment of “ Hot G oods ” under t he C hi l d L abor P rovi si ons of t he F ai r L abor St anda r d s A ct f or a di sc uss i o n of t he condi t i ons and cons i der a t i ons i n w hi ch t he hot g oods pr ovi si ons of t he F L S A ar e app l i ed i n chi l d l abor cas es. F or pur pose s of cal cu l at i ng C M P s for c hi l d l abor vi ol at i on s t hat i nvol v e t he pr ohi bi t ed m ovem ent of g oods i n vi ol at i on of t he hot g oods pr ovi si on t he CM P a ssessme nts are cal cu l at ed usi ng t h e g ravi ty and si ze o f bu s i n es s f act ors as wel l as t he ad di ti on a l re g u la to ry cons i der at i ons as desc ri bed above a nd f ol l owi ng t he r el eva nt r eg ul at or y cr i t er i a. I n addi t i on, WH D w ill u tiliz e t he ag enc y’s f ul l aut hor i t y und er t he r eg ul at i on s a nd CMPs will b e a ssesse d fo r each s hi pme nt or del i ve ry f or s hi pm ent. S ee 29 C.F. R. 579.3(a) (1). B. Record k eep i n g E m pl oyer s a r e r equi r ed t o re cor d i n t hei r f i l es a bi r t h dat e f or eve r y empl o ye e und er t he ag e of 19 years. 29 C.F.R. 516. 2(a) (3). C M P s f or vi ol at i ons of th e r ec or dkeepi ng r equi r eme nt under t he f ed er al chi l d labor l aws are cal cula t ed u si ng t h e g ravi t y and si ze of busi n ess fa c tors as wel l as t he addi t i onal re g ul at or y consi der at i ons descr i bed above and f ol l ow i ng t he r el evant r eg ul at or y c rite r ia, see 29 C.F.R. 579.3(a) (5). I n addi t i on, t he C M P as s es sme nt f or c h i ld l a b o r r e c or d ke e pi ng v io latio n s w ill u tiliz e th e a ge n c y ’ s f u ll a u th o r ity u n d e r th e r e g u la tio n s a n d w ill b e a s se s s e d p er empl o yee. See id. F or exa mpl e, i f an em pl oy er fa i l s t o keep re cor ds of dat es of bi rth f or f i ve of i t s empl oy ees under t he ag e of 19, t h e ag en cy may asser t an d assess f o r f i ve separat e r ecor dkeepi ng vi ol at i ons. IV. CO NCLUS ION WH D is c o m m itte d to com bat t i ng oppr es si ve c hi l d l abor by usi ng al l appr opr i at e enf or cem ent t ool s, i ncl udi ng t h e a ssessme nt of CL CM P s. P l ease di rect any ques t i ons r eg ar di ng t hi s F AB to th e W H D N at i onal Of f i ce, O f f i ce of P ol i cy, t hr oug h appr opr i at e cha nnel s.