BOLI revives surprise inspection rule

“The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’” Ronald Reagan

In July 2016 BOLI started a new program that allows for surprise, warrantless searches of employers’ premises and books to find violations of wage and hour laws and to examine and record “methods of protection from danger” and “sanitary conditions.”  It remains unclear whether there is anything about the searches that is intended to help employers.

According to BOLI, the statute that authorizes these inspections has been on the books since 1979, but BOLI has not been funded to carry out the inspections since the 1980s.  The statute upon which BOLI relies for authority to conduct the inspections is ORS 651.120, which states:

1. The Commissioner of the Bureau of Labor and Industries may:

2. An owner or occupant, or the respective agent, of any factory, mill, office, or workshop, or public or private works, may not refuse to allow an inspector or employee of the Bureau of Labor and Industries to enter.

Refusal to allow such an inspection under ORS 651.120(2) is a Class C misdemeanor.  ORS 651.990.

Although the Commissioner also has a right to issue a subpoena to obtain records, the Commissioner’s own rules state that he can only do so after he has made a request for such records and the recipient failed to comply within the time specified. OAR 839-002-0030.

In recent weeks, BOLI has bypassed both its standard records request and the subpoena process in favor of simply entering employers’ premises with a copy of ORS 651.120.

To date, BOLI’s inspection team has focused on food processing industries, but they  are expected to target any employer or industry where they suspect wage and hour violations are more likely to occur.

The team typically consists of three BOLI inspectors, one of whom speaks Spanish.  Employers, be aware that they may arrive at your door and demand immediate entry and inspection of your premises and your payroll records.  They will also ask to talk to your employees.  If they cannot get access to employees at the job site, they may wait in your parking lot or entry way and try to interview employees as they come and go.

According to BOLI, the purpose of these inspections is to help employers identify and correct any mistakes they have been making in their efforts to comply with wage and hour laws.  BOLI may send a correction letter if it finds minor violations (like a missing employee rights poster), but depending on what BOLI finds, it may take some legal action or exact fines, similar to an OSHA safety inspection.  It is too early to tell which action by BOLI is more likely, but its knock-and-barge tactics make one think more about the latter.

The problem with BOLI’s surprise, random inspections is that they are not based on probable cause and they do not seem “reasonable” given the lack of notice.  There is an argument that the inspections may violate the Fourth Amendment, which applies to commercial premises as well as to homes.  It secures the right to be free from unreasonable searches and seizures, and provides that no warrants shall be issued without probable cause.

The general rule is that a warrantless inspection program is only valid when it involves a pervasively regulated industry and the inspection is targeted to the specific issues being regulated in that industry, e.g., health inspections of kitchens in restaurants.  But when the right to enter and inspect without notice is based on statutes of general application to all employers, such as minimum wage laws, the Fourth Amendment requires the agency to give the business an opportunity to have a neutral decision maker, such as administrative law judge, review the demand for inspection to determine whether it is warranted.   Further, BOLI’s authority to search areas that are reserved for employees (such as employee lockers or desk drawers) would also be questionable under the Fourth Amendment.

If a BOLI inspection team shows up at your place of business and demands an immediate inspection, here are some things that you should consider:

1. Ask for BOLI’s authority and the stated purpose of inspection.  Under the inspection statute, BOLI’s authority is limited to investigating certain types of violations.  You have the right to request BOLI’s authority for the inspection and to limit their inspection to those areas and records that are relevant to the claims at issue.  For example, if BOLI is investigating potential wage and hour violations, they may be entitled to your payroll records, but they should not be able to access all of your records or rifle through employees’ desks.

2. Consider whether the inspection is at a “reasonable time.”  If BOLI shows up without notice, there could be some argument that the inspection is not reasonable.  For example, if the company is at a peak production time or the offices are about to close for the day, the employer may have an argument that the inspection is not reasonable.

3. If you let them in to inspect, you should make it clear that you are not waiving your Fourth Amendment rights, but are allowing the inspections under protest and with a reservation of rights.

4. As an alternative, you could object and refuse to allow the inspectors to enter because the time is not reasonable and because they have not provided a warrant or other reasonable basis for the inspection.  The risk to this approach is that the statute provides that “to refuse to allow” an inspector to enter is a Class C misdemeanor.  Therefore, you should tell them that you are not refusing to allow them to inspect but you are requesting the appropriate authority and/or that they conduct the inspection at a “reasonable time.”  You should offer to send them the records that they seek by mail or email within a reasonable time upon receipt of a written request for records that provides the authority and basis for the request.