Steep fines in Iowa set off state-federal showdown over child labor laws

A part-time employee works on an order in the kitchen at a Wendy’s restaurant in California. In recent years, many states, grappling with tough labor markets, have sought to loosen some child labor protections for the youngest workers. Jae C. Hong/The Associated Press

Michelle Cox was in disbelief when a U.S. Department of Labor official told her earlier this year she was violating federal law by employing 14- and 15-year-olds past 7 p.m. on school nights.

Cox, the owner of a Subway franchise in Maquoketa, Iowa, knew the state legislature had made substantial changes to state labor laws in 2023 to allow younger teens to work later on weekdays.

The problem, as critics of last year’s proposed bill pointed out during the legislative debate: Iowa’s new regulations directly conflicted with federal standards. And employers must follow the strictest standards, whether they be state or federal.

Cox said she fixed the problem the day the feds informed her, eliminating later work shifts for her youngest employees. But she said she still faced a $73,000 federal fine.

“I kept telling him I wasn’t trying to break the law,” she said. “I honestly thought I was following the law.”

She’s among several Iowa restaurateurs facing steep penalties from federal regulators following last year’s state legislation.

In recent years, lawmakers in Iowa and other states have sought to roll back long-standing child labor protections as employers struggle to fill open jobs and critics complain that many safeguards on child workers are outdated. But experts say no state has recently gone as far as Iowa, setting up a trial case of the extent to which the feds will crack down in states with looser laws.

Since 2021, lawmakers in 31 states have introduced bills that would weaken child labor protections, according to the Economic Policy Institute, a think tank that examines how policies affect low- and middle-income workers. This year, EPI tracked bills weakening child labor protections that passed in eight red states: Alabama, Florida, Indiana, Iowa, Kentucky, Louisiana, Oklahoma and West Virginia.

Among the changes are expanding eligibility for younger teens to drive to work or loosening standards on work permits for the youngest workers — items unaddressed in federal law. Other changes, including some enacted in Iowa, directly conflict with federal laws.

‘Who’s going to work there?’: Lawmakers grapple with labor shortages

Jennifer Sherer, an EPI researcher who tracks the issue, said federal and state governments had for decades embraced protecting the youngest workers after eradicating the worst child labor abuses. But legislatures, backed by business groups, have recently sought to loosen standards, leading to heightened tensions over federal rules, she said.

“What we’re seeing is this pretty bold and alarming all-out assault on that consensus,” Sherer said.

Iowa’s Republican leaders, including Gov. Kim Reynolds, are protesting what she called “excessive fines” resulting from enforcement of federal law. In a July 1 letter to federal regulators, Reynolds said some businesses were facing fines as steep as $180,000.

In a statement, the federal Department of Labor acknowledged receiving the letter, saying officials would “respond accordingly.”

“We fully support the enforcement of labor laws against businesses which employ youth in dangerous and harmful work environments,” Reynolds wrote. “But a teenager working past 7 p.m. on a school night is not oppressive child labor.”

Reynolds noted that 25 other states have less restrictive laws than the feds. She said those states, including South Dakota, have not faced the same level of enforcement and fines as Iowa.

Since 1994, South Dakota has sanctioned more expansive hours for younger workers than federal law allows. But the federal labor department has not been nearly as active there, said Nathan Sanderson, executive director of the South Dakota Retailers Association.

“They want to make an example out of Iowa,” Sanderson said. “Other states that have had laws like this that have been in place for longer aren’t going to be nearly as prescient for the U.S. Department of Labor, because they’re viewing this as sort of a test case.”

In the meantime, employers such as Cox are stuck in the middle.

She thinks the federal government is unfairly targeting Iowa, which she says was only trying to support small businesses, and should have given out warnings first. She said she often works alongside her youngest employees, who are not endangered at Subway.

“They don’t run ovens. They don’t run meat slicers,” she said. “They make sandwiches.”

Cox is appealing her fine with assistance from the state’s restaurant association. She said the fine would prove ruinous for her store, which is located in an eastern Iowa town of about 6,100 people.

“I’d have to shut my doors,” she said. “Do you realize how many sub sandwiches you’d have to make to make $73,000?”

‘We should not be in this position’

In Des Moines, opposition was fierce as soon as lawmakers released the draft of their bill last session. The Republican legislation sparked national headlines — and false claims that Iowa was rolling back protections to allow kids to work the floors of meatpacking plants.

“It was one of the most bizarre bills, in a way, I had ever worked on,” said Republican state Rep. Dave Deyoe, the floor leader for the bill. “The PR campaign against this was huge.”

But the rhetoric didn’t match the substance, he said.

Deyoe viewed the bill as more of “a code cleanup,” with lawmakers aiming to update some provisions of statute that hadn’t been touched in more than a century. The previous state law still referenced children working in street occupations, he noted, such as selling newspapers and shining shoes.

You can volunteer at the high school concession stand and get no pay until 11 o’clock at night and nobody cares. But if you go and work at Dairy Queen until 9 and get paid for your work, suddenly that’s dangerous or harmful?

– Jessica Dunker, president and CEO of the Iowa Restaurant Association

Under the law enacted last year, younger teens are allowed to work until 9 p.m . — rather than the federal 7 p.m. cutoff — and those as young as 16 can serve alcohol. Legislation enacted this year allows driving permits for younger teens so they can drive to work.

Deyoe noted Iowa’s law had already conflicted with federal law: While the federal government says 14- and 15-year-olds can only work three hours per day, the state had since the 1970s allowed them to work for four hours.

“I’m not really sure what the motive is,” he said of recent federal action. “But it sure does seem over the top.”

Federal enforcement has seemed to have targeted Iowa’s restaurant industry, said Jessica Dunker, president and CEO of the Iowa Restaurant Association, which lobbied for last year’s legislation.

The association initially celebrated the law, informing employers of the new state guidelines. But since the federal investigations began, Dunker said, her organization has been urging members to follow federal rules.

Dunker thinks Iowa is being treated unfairly since other states with conflicting laws don’t seem to be facing similar enforcement. She noted the state law only changed the work times for younger teens — it didn’t allow them to perform more dangerous work.

“If you are a high school student, you can volunteer at the high school concession stand and get no pay until 11 o’clock at night and nobody cares,” Dunker said. “But if you go and work at Dairy Queen until 9 and get paid for your work, suddenly that’s dangerous or harmful?”

Jake Andrejat, a spokesperson for the U.S. Department of Labor, said less restrictive state laws do not negate more restrictive federal rules.

“It is, and always has been, the obligation of the employer to maintain compliance with federal law when their states pass laws that are less restrictive,” he said in a statement to Stateline.

Many of the department’s investigations are based on complaints or tips. But it also performs “agency-initiated investigations,” aimed at protecting the most vulnerable employees who are the least likely to complain, Andrejat said.

“The restaurant industry has a high rate of violations and often employs vulnerable workers who may not be aware of their rights or specific employment rules such as the right to overtime and child labor laws,” he said in the statement.

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To Iowa state Sen. Nate Boulton, the predicament facing employers was entirely preventable. And predictable.

“This is not a situation where the federal government dropped a trap door on the state of Iowa,” said Boulton, a Democrat who practices labor law in Des Moines. “This is a situation where there were all kinds of warnings and all kinds of efforts to draw attention to these conflicts. … We should not be in this position.”

Boulton was among those last year who warned Republicans that the law would conflict with federal standards. Since federal enforcement began, Iowa’s entire congressional delegation has called for changes in federal law, arguing the current protections are outdated.

But Boulton said there are less harmful ways to push for change in federal rules than to pass a conflicting state law.

“What a disappointing way to approach a political issue, by putting small businesses in a position to be fined to try to put pressure on the federal government,” Boulton said.

Other states take opposite approach

While youth employment rates have inched up in recent years, they remain significantly lower than previous decades. At the same time, the country has seen improved high school graduation rates , noted Betsy Wood, a historian of child labor.

She said that state policies should encourage that trajectory, not discourage it. Wood, who teaches history at Bard High School Early College in Newark, New Jersey, noted that recent rollbacks of child labor protections come during a time of skyrocketing child labor law violations .

“It is negligent and dystopian for employers — with the help of state legislatures — to balance their labor shortages on the backs of teen workers,” Wood said.

With Workers Scarce, Some States Seek to Loosen Child Labor Laws

Unlike the states loosening work protections, lawmakers in seven states — Alabama, Colorado, Minnesota, Nebraska, Oregon, Utah and Virginia — recently enacted legislation to strengthen some child labor standards, according to EPI . The Illinois legislature passed a similar bill , but the governor has not signed it.

Several employers in Utah faced penalties after following less strict state standards. For example, the federal labor department announced in March it had fined a Baskin-Robbins franchisee in Utah nearly $50,000 for scheduling young workers too late in the evening and too many hours per week. The department said the owner of eight ice cream shops relied on “erroneous legal guidance” to follow the less stringent state regulations.

Utah Democratic state Sen. Karen Kwan introduced legislation in February to get state law more in line with federal rules for the youngest workers, reducing confusion for employers. It passed with little opposition.

“The intent was to make sure our employers do not get fined by the federal government,” she said.

In Indiana, rules for the youngest workers were stricter than the federal regulations.

That became troublesome for employers, especially in rural areas where workforce challenges are exacerbated, said state Rep. Kendell Culp, a Republican.

After being contacted by the owner of a drive-in restaurant, Culp learned that Indiana didn’t allow 14- and 15-year-olds to work past 7 p.m. in the summertime.

Legislation he sponsored changed that and eased requirements on 16- and 17-year-old workers that were not addressed under federal law.

Bringing some of Indiana’s regulations more in line with federal rules will ultimately reduce confusion, Culp said.

“I think from an aspect of really being business-friendly, it made sense to have the same regulations,” he said. “Those regulations are there for a reason: to protect those teenagers.”

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The post Steep fines in Iowa set off state-federal showdown over child labor laws appeared first on Stateline .