TIPP is a joint education and enforcement partnership between federal, state and local agencies with jurisdiction over labor and employment tax laws. Principal agencies involved are the Division of Labor Standards Enforcement (DLSE) and the U.S. Department of Labor (DOL) Wage and Hour Division.
As needed, other state and local agencies participate in TIPP education and enforcement activities. Such agencies have included the: Division of Occupational Safety and Health (Cal/OSHA), Employment Development Department Tax Branch, California Highway Patrol, Department of Housing and Community Development, Department of Toxic Substances Control, local health departments, and local law enforcement.
TIPP focuses its efforts on the garment and agriculture industries-two industries with well-established histories of labor law violations.
Emanating from Governor Pete Wilson's Farm Worker Services Coordinating Council, TIPP began its unique operation in November 1992. TIPP brings together agencies with related responsibilities to work alongside one another in a coordinated effort.
TIPP functions by first conducting outreach efforts to educate employers on labor standards requirements in order to help them voluntarily comply with the law. Agencies participating in TIPP routinely conduct educational seminars to inform employers of minimum labor standards requirements.
These forums have grown in popularity since TIPP's inception. The first seminar on labor standards in agriculture attracted only 13 people. Now TIPP seminars draw several hundred participants in some cases.
Following educational outreach, TIPP sweeps employers in a particular city or area who are suspected of violations in targeted industries. Investigators spend anywhere from a couple of days to a couple of weeks conducting inspections in a region.
DLSE and DOL investigators inspect employers in teams, and members of other agencies participate as required by the situation. Afterward, information is shared with other agencies for any follow-up activity warranted, such as an employer tax audit by the Employment Development Department.
The teamwork at the heart of TIPP facilitates information sharing, reduces duplication of effort, improves enforcement, and saves taxpayers' money. In recent years, tight budgets have limited and even reduced available resources. As a result of fiscal limitations, agencies have been impelled to find more effective means to enforce minimum labor standards.
TIPP has demonstrated that numerous public agencies can work together and improve enforcement while using fewer tax dollars. By any standard, TIPP embodies "reinventing government" and offers an excellent example of successfully doing more with less.
In a report summarizing TIPP's first year of operation, DLSE and DOL stated that TIPP assessed nearly $6.5 million in civil penalties for violations in the two targeted industries. The garment industry had a higher rate of violations than agriculture.
In the garment industry several problems were commonly found during TIPP inspections. Violations concerned failure to pay minimum wage or overtime, child labor, wage payments in cash without proper deductions or recordkeeping, lack of proper workers' compensation coverage, lack of registration with the Labor Commissioner as a garment manufacturer, and illegal industrial homework. In California garments illegally manufactured at home or by using an unlicensed manufacturer are subject to confiscation by the Labor Commissioner.
Common violations in agriculture also spanned several areas. In wage and hour matters, violations were usually the failure to pay minimum wage or overtime. As in the garment industry, it is legal to pay workers by the piece-as long as the amount paid equals or exceeds the hourly minimum wage and the proper rate is paid for any overtime. Other common violations included improper cash payment of wages, lack of appropriate workers' compensation insurance, unlicensed farm labor contractors, unsafe transportation of workers by "day haulers," and substandard housing.
In agriculture two areas of concern attracted particular attention: child labor and health and safety.
Over the past year there has been a startling increase in the number of child labor violations found in the agricultural industry. Last year TIPP found children as young as seven working in fields during school hours. During its first year's efforts in agriculture, TIPP issued 153 citations for child labor violations-compared with 11 such citations in 1992. In fact, the number of child labor violations cited in agriculture during 1993 was only one citation short of the total for the previous five years combined.
While it is difficult to determine if the increased number of citations for child labor in agriculture is because of increased violations, improved enforcement efforts, or a combination of the two, it is nevertheless important that agriculture employers understand requirements concerning child labor. Responsibility rests with the employer to ensure that only minors authorized to work in the field do so.
Under state law, children who merely "help" a parent are considered to be working. And if the child is not paid, the employer also faces a minimum wage citation for the child's labor.
For children to work in agriculture, a work permit is required. State and federal laws, however, make an exception for work performed on premises owned, operated and controlled by a child's parents or guardian, as long as the work is performed when public schools are not in session.
Health and safety issues in agriculture also raised concern. Most violations in this area were for failure to provide appropriate toilet and hand-washing facilities.
Under state and federal law, agricultural employers must provide: potable drinking water which is clean, suitably cool, and dispensed with single-use drinking cups; one toilet for every 20 employees; and handwashing facilities that include potable water, soap, and single-use towels.
Although TIPP's efforts increased the visibility and success of enforcement in the garment and agriculture industries, it is important to note that no new laws are involved.
In fact, most of the minimum labor standards enforced by TIPP have been the law for well over 60 years.
TIPP simply demonstrates a better coordinated, multi-faceted enforcement approach.
In addition to increased education and enforcement and more efficient use of resources, TIPP also serves employers in garment manufacturing and agriculture who obey the law. Other than protecting workers, TIPP works to ensure a level playing field among employers.
Certainly, an employer who takes illegal shortcuts by not paying workers properly or by not purchasing appropriate workers' compensation insurance saves money- yet places law-abiding employers at a competitive disadvantage. In this sense, and by referring cases of possible tax liabilities to appropriate agencies for audit, TIPP works to stem the underground economy.
As TIPP enters its second year, greater emphasis will be placed on education and outreach efforts for employers and employees. In the garment industry TIPP will work closely with garment employer associations to facilitate training seminars and workshops for garment contractors.
A recent seminar conducted in Los Angeles by the Labor Commissioner for garment employers and workers drew nearly 150 participants. In that session the Trade and Commerce Agency also participated providing information on starting and operating a business.
For both the garment and agriculture industries, a successful educational tool from the first year will be expanded. After enforcement actions in a particular area, TIPP representatives met with local representatives of employer associations. These meetings provided opportunity for TIPP members to review violations found and to discuss how to correct them. The sessions also provided opportunity for feedback from employers on problems encountered from their point of view. TIPP is very much a two-way street, with education a crucial facet.
TIPP's outreach in the second year will extend further to employees and their advocate groups in both industries. TIPP has found employee input valuable for identifying problems at the local level. This outreach will include work through locally-based committees composed of employee advocates and farm and garment workers. TIPP has started employing such local committees in the Fresno area. TIPP also plans to distribute an employee rights card that outlines minimum labor standards and how employees can report problems.
On the enforcement side, TIPP will increase its emphasis on recidivist violators. TIPP will use multi-agency information sharing so that enforcement efforts are better focused on problem locations and employers.
The Internal Revenue Service will also be involved in enforcement in both industries. This involvement, however, will be sharing of information with the Labor Commissioner, and will not include IRS participation in enforcement activities.
The IRS will provide information to the Labor Commissioner on farm labor contractors and garment manufacturers with outstanding tax liabilities. If a licensee has not resolved an outstanding IRS tax obligation, the Labor Commissioner will withhold the farm labor contractor's or garment manufacturer's license.
In the first year, TIPP offered an innovative approach in the form of a coordinated and cooperative education and enforcement strategy in two industries with known histories of labor law problems. It has improved enforcement, education, and working conditions where problems exist, and has better served three constituencies: the worker, the taxpayer, and the law-abiding employer.