child labor an aspect of enterprise risk management you may be overlooking

By Kenneth A. Sprang, Esq., Partner, Portum Group International, LLC

In the 21st century few persons in the United States think about child labor or child labor laws.  On the contrary, parents must question at what age to provide their children with a cell phone or a computer.  Summers are often spent at camps where children may simply run, play and swim, or they go to camps that focus on one or two activities, e.g., tennis or sailing.  We parents invest ourselves in nurturing the children with a goal of going to college or joining one or both parents in the family business or farm or pursuing a skilled trade. The idea of having children, particularly middle-class children, working full time while in school or the idea of child labor in dangerous conditions takes us back to the early days of the 19th and 20th centuries and Upton Sinclair’s The Jungle, when the “robber barons,” John D. Rockefeller, Cornelius Vanderbilt, Jay Gould, Jim Fisk, JP Morgan and Andrew Carnegie, dominated the economy.

The barons deployed cheap child labor in their factories. Immigrant children were often put into sweatshops, which exposed them to harsh working conditions.  Businesses leaped to hire the children because they were a source of cheap labor.  And they undercut labor unions. Children could be found working in factories with harsh working conditions that could easily cause serious injury.

Children were particularly helpful in the mines because they were shorter and smaller than the other miners. Businesses were not regulated by the federal government at all.  It was a time of laissez faire economics.  Men and women working in factories were paid very little.  Consequently, they enlisted  the children to help support the family.  Children as young as five or six were employed making glass, steel and processed chemicals. Absent any child labor laws, the children often worked 18-hour days.

At the turn of the 20th century, it is believed that 1.7 million children were employed as laborers. More children were working in the south rather than the north, as the north invoked child labor laws earlier than the south.  As a result, many companies moved southward.

In the early 20th century, Congress adopted laws governing child labor.  They are now incorporated within the Fair Labor Standards Act.  Federal law now prohibits 14–15-year-olds from working more than eight (8) hours a day.  During a school day, minors may work no more than three hours.  Children may not work more than 40 hours per week and no more than 18 hours while they are in school. Minors are also not allowed to work before 7:00 a.m. or after 7:00 p.m. No federal laws restrict how many hours a 16–18-year-old can work. However, most states have their own laws regarding the number of hours a child can work.  Consequently, American businesses tend to give little thought to child labor.  

Think there’s no child labor in the U.S. ?  Better think again!

The fact is that child labor remains alive and well  --- in sharp contrast to many of its victims --- in America today.  You may be doing business with or buying products from a child-labor culprit.

Fast forward from 1923 to 2023, and we experience déjà vu in the world of child labor. First of all, the U.S. isn’t a pristine in this category and you might think.  The most consequential violations have occurred in the meat packing industry, where Packer Sanitation Services (“PSSI”) was found by the Department of Labor (“DOL”) to have unlawfully employed at least 31 children in slaughterhouses in Nebraska and Wisconsin.  PSSI, which is based in Kieler, Wisconsin has contracts to clean hundreds of meatpacking plants across the country.

Between September and October 2022, the DOL conducted surveillance and found minors entering a Grand Island, Nebraska, facility as well as a Worthington, Minnesota location. Other investigations included interviewing minors at a Marshall, Minnesota, facility of a separate company, Turkey Valley Farms, which was also a client of PSSI.  The DOL complaint further alleged that PSSI created roadblocks for the Department in its effort to conduct an investigation, a move that plaintiffs asserted “perpetuates oppressive child labor”.

The government initially alleged that PSSI hired at least 31minors to work at three plants —including two in Minnesota. At the Grand Island plant, a 13-year-old suffered severe burns from chemical cleaners.  Minors under the age of 16 worked past 7:00 p.m. on weekdays and worked more than 18 hours a week during the academic year when school is open.  They were required to  engage in duties that involve hazardous machinery, specifically in machinery found in a slaughtering and meat packing establishment, such as meat- and bone-cutting saws.

The Department issued a Complaint against PSSI alleging that it was making minors under the age of 16 work past 7:00 p.m. on weekdays, making them work for more than 18 hours during the academic year when school was open, and making them engage in duties that involved hazardous machinery such as meat- and bone-cutting saws.

 The DOL investigators interviewed children under the age of 16 who reported working for Packers Sanitation under the age of 16. School records and other documentation were used to verify the ages of the children involved. Some children reported working long hours or overnight shifts. Other children reported working on power-driven machines or on the kill floor. Investigators surveying and searching the facilities also observed workers who, based on their size and appearance, were likely underaged. Confidential informants also reported child laborers. 

In addition, the DOL found that PSSI attempted to interfere with its investigation, a move that plaintiffs said  “[perpetuated] oppressive child labor.”  PSSI employees attempted to prevent investigators from gathering evidence pursuant to search warrants, attempted to prevent investigators from interviewing employees, and may have spoliated evidence. 

Judge John Gerrard found the evidence sufficient to support the issuance of a temporary restraining order. The Order required PSSI to cease its employment of minors. The employees identified allegedly include a 14-year-old, three 15-year-olds, two 16-year-olds and five 17-year-olds.

Subsequently, the DOL investigators found 11 additional minors hired to work overnight to clean slaughterhouses. That brought the total number of teens alleged to have been unlawfully employed by Packers Sanitation Services Inc, at least in part, to 42, “a number which will likely only grow,” government attorneys opined.. The DOL has begun to look seriously at child labor issues.  In Hershey, Pennsylvania, the DOL found that a Dunkin franchisee violated child labor laws when it allowed 14-and-15-year-olds to work outside permissible hours at three locations in Dauphin and Lebanon counties. The employer permitted 14-and-15-year-old employees to:

• Work more than three hours a day on a school day.
• Work past 7:00 p.m. on a school night.
• Work more than 18 hours a week during a regular school week.
• Work more than eight hours on a non-school day.
• Work past 9 p.m. during summer break.

These actions violated the child labor provisions of the Fair Labor Standards Act. The violations involved 39 minors employed by Dunkin at multiple locations in the Hershey area.

Following the investigation, the employer agreed to enter into an enhanced compliance agreement with the division to ensure future compliance with the Fair Labor Standards Act. As part of the agreement, the employer paid a civil money penalty in the amount of $24,332 due to the willful nature of the violations. It also agreed to conduct child labor training with supervisors and managers; provide relevant child labor publications to minors, parents and guardians of minors under the age of 16, supervisors and managers; and establish an internal phone number for employees to anonymously report child labor violations. The employer also agreed to require minors to wear different colored name tags so managers can easily identify minors under16 years of age, and place signage and stop stickers on hazardous equipment.

In the Pittsburgh area a McDonald’s franchisee was fined $57,332 when over 100 employees were identified as having worked in violation of the federal child labor laws.  Last year 

Subway, Burger King and Popeyes restaurants in South Carolina were fined for similar child labor law violations.  

Meanwhile, in July, Reuters reporters uncovered violations at a Hyundai car-making plant in Alabama. Allegedly kids as young as 12 and 13 were hired to work at a place called Smart Alabama LLC, a metal-stamping shop that tis majority-owned by a Korean automaker.

As shown by these illustrations.  Yes, indeed, child labor is sadly alive and well in the United States. The Department of Labor said that from fiscal year 2017 to 2021, officials have uncovered child labor violations in more than 4,000 cases involving more than 13,000 minors.

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