Child Labor Issues Escalate Amid Legal Changes

​In a five-week span this past summer, three 16-year-old boys died in work accidents at separate industrial job sites in the U.S. One was a Guatemalan immigrant who was killed while helping to clean a poultry processing plant in Mississippi. Another died in a conveyor belt accident in a Wisconsin sawmill, while the third was pinned between a truck and its trailer in a Missouri landfill.

Federal law bans minors from working in poultry processing plants and performing most jobs in sawmills. The U.S. Department of Labor (DOL) is investigating all three deaths, according to published reports.

These are not isolated incidents. Earlier this year, the DOL fined Wisconsin-based Packers Sanitation Services Inc. $1.5 million for illegally employing at least 102 children between the ages of 13 and 17 who worked at meat packing plants and performed hazardous jobs, such as cleaning dangerous power equipment.

In May, the DOL fined three McDonald's franchisees for illegally employing 305 children, including two 10-year-olds who were not paid and were working until 2 a.m. Two months later, 16 McDonald's franchisees were caught illegally employing 83 minors. The federal Fair Labor Standards Act generally bars children under the age of 14 from working.

Uncovering the Sharp Rise in Illegal Minor Employment

The number of minors illegally employed in cases pursued by the U.S. Department of Labor has soared 69 percent since 2018, according to the DOL. Now, each child labor violation incident involves an average of five minors working illegally, up from three in 2018.

There are multiple reasons for the surge, experts say. Some employers are willing to ignore child labor laws amid a tight labor market, especially because fines are relatively low and enforcement is limited. However, another factor is that better targeting by regulators has led to more abuse being uncovered.

The increase is also linked to an influx of undocumented workers, including unaccompanied minors, into the country. Those children, as well as those accompanied by their families, may accept dangerous jobs because they need money to live. A Reuters investigation revealed that undocumented minors were working at companies in Alabama that supplied parts to South Korean automakers Hyundai and Kia, while a New York Times report uncovered migrant teens working at a variety of employers, including suppliers to major consumer brands.

 Do you want to offer higher wages and better working conditions so you can attract age-appropriate workers, or is it easier just to turn to kids who are vulnerable and exploitable?"
- Terri Gerstein

"Employers talk about a labor shortage, but other people talk about a good jobs shortage," says Terri Gerstein, a fellow at the Center for Labor and a Just Economy at Harvard Law School. Gerstein's question for employers: "Do you want to offer higher wages and better working conditions so you can attract age-appropriate workers, or is it easier just to turn to kids who are vulnerable and exploitable?"

Labor Shortages Fuel Underage Workforce Dilemmas

The ongoing labor shortage is putting pressure on employers. The time it takes to fill open positions has increased every year since before the pandemic began—reaching 44 days on average in the first quarter of this year, according to new data from human capital research and advisory firm The Josh Bersin Company and global recruitment company AMS. That's up a full day since last year.

"Make no mistake, the hiring market is not going to get easier anytime soon," says Jim Sykes, global managing director of client operations at AMS.

Employers today are dealing with a shrinking workforce, in part due to older workers retiring. Labor force participation is 62.8 percent, down from 63.4 percent in February 2020, according to the U.S. Chamber of Commerce. The pandemic drove more than 3 million adults into early retirement. The Chamber says the percentage of adults 55 and older who were out of the labor force due to retirement rose to 50.3 percent in the third quarter of 2021, up from 48.1 percent in the third quarter of 2019.

Relaxing Child Labor Laws

Against this backdrop, at least 10 states are introducing or have passed laws that roll back child labor protections, according to the Economic Policy Institute, a left-leaning think tank in Washington D.C. Some directly conflict with federal laws. Proposals have included lifting restrictions on hazardous jobs, extending work hours and lowering the age to serve alcohol.

For example, Iowa passed a law which under certain circumstances allows 14- and 15-year-olds to work on assembly lines and 16-year-olds to serve alcohol. New Jersey extended working hours and Arkansas eliminated work permits for 14- and 15-year-olds. A bill in Wisconsin would allow children as young as 14 to serve alcohol. Most states require those serving alcohol to be at least 18.

Intensifying the Fight Against Child Labor Abuses

The issue of youth employment has garnered major attention recently, and the spotlight has triggered actions by some to try to end the abuses. Proposed federal legislation would impose a nearly eightfold increase in the fines on companies violating child labor laws. If passed, maximum penalties would rise to between $132,270 and $601,150, from between $15,138 and $68,801.

The DOL and the U.S. Department of Health and Human Services earlier this year announced new efforts to end violations, including a new task force that will improve coordination between agencies. Still, the DOL's own independent watchdog has launched an audit of the agency's "efforts to curtail child labor law violations, as well as the cause for rising child labor law violations," according to the DOL's Office of Inspector General.

Meanwhile, pressure has been building on employers to end abusive practices. Meat processer JBS USA, which had employed Packers Sanitation Services Inc. to clean some of its plants, severed ties with the business at some locations and created its own sanitation company after violations were uncovered. The new company will clean at some plants, and a portion will be covered by a union contract with United Food and Commercial Workers International Union. Packers Sanitation appointed new leadership after the scandal, and the union will represent its workers at some locations.

"In light of the troubling allegations that have occurred in the food sanitation sector, JBS USA has made the decision to create a company that can provide the highest levels of food safety and quality assurance, while also adopting the same high standards for compliance and employment verification that we adhere to in the hiring of our own JBS USA workforce," says Wesley Batista Filho, the company's CEO, in a statement.

Jennifer Sherer, director of the State Worker Power Initiative at the Economic Policy Institute, says JBS' actions and the attention focused on the problem are "small silver linings" to the crisis. "A lot of folks would argue that the fines are fairly low and not a very strong deterrent for a large company," she says.

Another issue, according to Sherer, is that the franchises, contractors and suppliers are fined for violations, and not the franchisors or companies hiring and/or buying goods and services from third parties. The latter tend to be much larger companies. Franchisors and companies purchasing goods and services typically have arrangements that require franchisees, suppliers and contractors to maintain certain standards, including following the laws. However, the recent violations call into question whether those agreements are being carefully monitored.

"The JBS deal closes a loophole," Sherer says.

Holding Companies Accountable for Youth Employment

Many other loopholes remain, though there are efforts to make companies more responsible for their business partners.

A shareholder group has been pressuring McDonald's and Hyundai, which owns Kia, to better police their franchisees and suppliers, respectively. SOC Investment Group, which advocates ethical and moral business practices on behalf of union members with $250 billion in their pension funds, sent letters to leaders at both companies asking them to address child labor violations connected to their businesses.

SOC wrote a letter to McDonald's Chairman Enrique Hernandez Jr. asking the company to conduct an independent third-party human rights risk assessment that would include a review of restaurants owned by franchisees.

"Being associated with violating child labor laws, the exploitation of vulnerable groups of workers and violations of human rights—whether at franchised or McDonald-owned restaurants—risks McDonald's reputation and brand value around the world," the letter said. Rich Clayton, SOC's research director, says the fast food giant disputed some of the letter's claims and didn't agree to an audit. McDonald's didn't return requests for comment.

SOC asked Hyundai to conduct an independent third-party human and labor rights risk assessment of its entire supply chain and to release the results publicly, with ongoing monitoring and annual updates. Hyundai assessed some of its suppliers, and its report said it found no evidence of illegal child labor at the plants it investigated and that the locations have practices in place to avoid breaking child labor laws. SOC wanted more details.

In a statement, Hyundai said it "recognizes and fully embraces its responsibility to make sure all suppliers understand and meet our high global workforce standards in the United States and abroad." The company is planning to sell its U.S. supplier that was illegally employing minors and is providing other suppliers with training to avoid further violations. It held a seminar for suppliers earlier this year, and strongly discourages the use of third-party staffing agencies. Some agencies provided fake documents to the illegally employed minors.

Navigating the Tension Between State and Federal Labor Laws

As pressure builds to end violations, some states are loosening restrictions and making it easier to hire minors. On one hand, state efforts don't matter, because companies must follow the stricter of the laws whether state or federal, according to the Department of Labor.

But Sherer is worried about the message that state actions send to employers. "It's saying the state will not uphold these guardrails and is in fact inviting employers to cross the line," she says. "It's an intentional pattern to chip away at federal standards and build leverage to roll back federal protections."

The Washington Post reported earlier this year that the Foundation for Government Accountability, a conservative think tank and lobbying group, was behind some of the efforts to relax some elements of state child labor laws. The organization didn't return a request for comment.

The Iowa law has come under fire because it directly conflicts with federal laws in some places. For example, the state law allows 14- and 15-year-olds to work up to six hours a day until 9 p.m. Federal law says they can only work three hours on school days until 7 p.m. They can work eight hours on nonschool days.

Additionally, Iowa's law allows 14- and 15-year-olds to perform jobs that are not typically permissible in federal regulations, such as working in industrial laundries and performing light assembly work. It also allows "momentary" work in meat freezers, which is prohibited under federal law.

The Iowa Association of Business and Industry, a lobbying organization, worked to pass the portions of the law that allow young teens to work in certain industrial settings, says J.D. Davis, vice president for public policy at the organization.

"This was not some broad policy initiative," says Davis, who explains that it was time to update a law that hadn't been revised in decades. He adds that teens were already doing the jobs as part of specific programs that were designed to introduce them to potential careers. Federal law does allow for 14- and 15-year-olds working in potentially hazardous conditions in learning programs if certain benchmarks are met.

 Do you think that taking advantage of the state law will help you so much that it's worth taking the risk that a federal agency will come in and cite you for noncompliance?"
- Katie Ervin Carlson

Over the summer, Iowa Democratic state senator Nate Boulton wrote a letter to the Department of Labor to alert federal officials to what were then proposed changes in the state law. Before the law was passed, the DOL responded to Boulton that several of the proposals did, in fact, conflict with federal laws.

Proactive Measures Against Child Labor Violations

"The Department will continue to closely monitor the status of child labor laws in Iowa and their potential ramifications for federal child labor law enforcement," wrote Seema Nanda, the DOL's solicitor of labor, and Jessica Looman, principal deputy administrator of the DOL's wage and hour division.

Katie Ervin Carlson, of counsel at law firm Dorsey & Whitney, says she reached out to clients to inform them about the new law, but none showed any interest in applying it to their workplaces. One manufacturing client said it would be too dangerous to have minors at the site.

"Do you think that taking advantage of the state law will help you so much that it's worth taking the risk that a federal agency will come in and cite you for noncompliance? That's the question," Carlson says. However, she adds that her clients don't seem to think it is. "Nobody wants to be the test case." 

Know the laws. Know both your state and federal laws that govern hiring minors, and follow the ones that are most restrictive. Carefully check potential employees' IDs and paperwork. Some companies that have illegally employed children said the minors had fake identifications. John Ho, a member of law firm Cozen O'Conner and co-chair of its OSHA Workplace Safety Practice, says it's crucial for employers to examine identifying documents to ensure that the height, eye color and hair color on the ID match the person being hired. It's an easy way to spot fraud. He also suggests that employers use the federal E-Verify system to determine the eligibility and age of their workers, even though it's voluntary for most employers. Carefully vet providers of contract labor. Companies don't have much control over who their contractors hire. However, Ho says companies can have third parties oversee contractors' hiring practices. They can also have their own supervisors onsite when contractors are working to see if anything looks suspicious. Even though a company is generally not held responsible for a contractors' actions, most organizations would rather not be associated with child labor violations. Invest in good payroll and scheduling software. Ardaman Singh, SHRM-CP, CHRO at the Greater Somerset County (New Jersey) YMCA, says the programs her organization uses will flag potential violations, such as if a minor fails to take a break or is scheduled for too many hours. She says it's an invaluable tool in helping manage minors. Train your supervisors. Experts say it's imperative that managers understand the relevant child labor laws and know which employees are governed by them. Giving minors different-colored uniforms or name tags can help supervisors ensure that they're following the laws.