Despite a growing body of case law laying out a blueprint for determining whether incarcerated workers are employees — which would legally entitle them to minimum wage and other protections — there is no definitive way to classify workers behind bars.
Disputes over classification are common in employment law, where the question is often whether a worker is an employee or an independent contractor. Employees qualify for more rights and protections under the federal Fair Labor Standards Act and state laws, including minimum wage, overtime and meal breaks. But determining whether an incarcerated worker is an employee is a relatively newer challenge, and courts have a different set of facts and questions to consider.
Generally, at the heart of courts' analyses mulling incarcerated workers' classification under the FLSA and state wage laws is conviction status and the work's purpose and location. But other questions are still open, including whether the facility's ownership as public or private carries any weight.
Howard Hoffman of
Hoffman Employment Law LLC, who is representing a group of prisoners who the Fourth Circuit said could fall under the FLSA for the work they performed at a Baltimore County recycling plant, recently told Law360 that not having a clear employment status distinction based on who owns a facility "is very concerning and discouraging."
"It's offensive and bad enough when a publicly run institution is loaning out inmates to a sister agency, which is what is occurring in
Michael Scott et al. v. Baltimore County 
," Hoffman said. "It's a whole other sort of dystopian step when a publicly run institution loans out to a private employer, which, anecdotally, I've heard happens quite a bit."
Hoffman said workers should pocket minimum wage and overtime when the FLSA's core interests are implicated in a case, particularly when prison labor affects marketplace wages or creates unfair business practices, with the government having "obvious ability to impact businesses."
"The notion of the government becoming a market player ought to send a shiver down everyone's back," Hoffman said. "When the government is not just regulating and participating in the market, but then using free labor from those it incarcerates, then the market is heavily distorted."
Here, Law360 looks at the patchwork of guidelines courts have laid out when considering incarcerated workers' employment classification.
Different Conviction Status, Different Classification
There is one factor that courts have focused on more than others when determining if an incarcerated worker has rights under the FLSA: conviction status.
D. Michael Hancock of
Cohen Milstein Sellers & Toll PLLC, who represented a group of
U.S. Immigration and Customs Enforcement detainees
in a wage case that landed in the Fourth Circuit, explained that people convicted of a crime who work within a prison's walls are considered exempt from wage laws.
That's because "the work that they perform is considered to be a form of punishment that is permissible" under the 13th Amendment of the U.S. Constitution, Hancock said.
The 13th Amendment, which abolished slavery after the Civil War, includes a so-called exception clause that allows for slavery and involuntary servitude as a punishment for a crime.
Hancock explained that courts have looked at civil detainees who have not been convicted of a crime, including ICE detainees, through a different lens and have taken a textual approach to the FLSA and state laws.
In a case in which Washington state sued private-prison colossus GEO Group and snagged a
$23.2 million win for ICE detainees who received $1 per day for their service in a voluntary work program, the Ninth Circuit ruled that state minimum wage law didn't have an exemption for "residents, inmates or patients in federally operated institutions."
In a statement to Law360, GEO Group disputed the idea that its voluntary work program would lead to considering the detainees as employees, saying that "participation in the voluntary work program is, as the name states — strictly voluntary."
"This program has been in place for decades and became part of the ICE performance-based standards under President Obama's administration," GEO said. "The wage rates associated with this federally mandated program are set by the United States Congress. As a service provider to the federal government, GEO is required to abide by these federally mandated standards and congressionally established guidelines."
Courts are tackling cases similarly under the FLSA, which Hancock said is "riddled with specific exemptions" but doesn't have a carveout "that says you are a civil detainee, therefore you don't need to be paid."
"So I think we'd lose the humanity sometimes that these are people. They've been convicted of nothing, and so they deserve the same kind of dignity and protection that we tend to almost every other worker in this country and need their work to be respected and to be properly acknowledged and paid," Hancock said.
However, in one specific example involving pretrial detainees working at a California county jail, both
the Ninth Circuit and
the California Supreme Court added an extra wrinkle in the state when they ruled that the workers weren't entitled to minimum wage and overtime because Penal Code Section 4019.3 applied.
Under that provision, the county was allowed to pay inmates a maximum of $2 for eight hours of labor in jail, and it should be interpreted broadly
regardless of conviction status, the California justices said.
Work Location and Purpose Could Move the Needle
Two other factors courts look at to determine detainees' classification is where the work is performed, and for what reason, Hancock said.
The Fourth Circuit, for instance, ruled in Scott that individuals in county detention
could fall under the FLSA based on the purpose of their work. It also highlighted the fact that the work was done "outside the prison walls," raising "the risk of unfair competition to other businesses."
The panel said that when the work is conducted inside prison walls, businesses "must conduct the enterprise within the constraints inherent to the carceral environment," and that scenario restricts how that work affects commerce outside of prisons.
"Not so when you run your operation in the free world but import cheap labor from a prison," the panel said.
In its ruling, the panel took into consideration the Fourth Circuit's 1993 decision in
Harker v. State Use Industries , which found that federal wage law didn't cover incarcerated people who "performed work not to turn profits for their supposed employer, but rather as a means of rehabilitation and job training."
The reason why a person behind bars performs work has emerged as a key issue in other wage cases, including in a Colorado federal suit that immigration detainees lodged against GEO Group.
There, a district court judge said in a 2015 decision partially granting the company's motion to dismiss that, because the detainees did "not use their wages to provide for themselves," minimum wage requirements under state law were not necessary.
But that account is often not true, as people frequently feel forced to work "to provide for their own necessities," said Anne Oredeko, senior counsel at Legal Defense Fund.
For example, Oredeko said, many prisons do not provide menstrual products to women who are then compelled to pick up a job to buy them at an often inflated price.
In 2018, Congress took some action, passing the First Step Act, which requires federal prisons to provide feminine hygiene products. But that didn't extend to state or county prisons.
Carmela Huang, a senior attorney at the National Center for Law and Economic Justice, said that not everyone agrees to work, and if they refuse, they might face punishment.
Punishment could include solitary confinement, being issued costly tickets that they would have to pay, or being stripped of privileges like seeing their families, Huang said.
"These are the kinds of things that we say are important for understanding why we characterize this [work] as slavery, because it's fundamentally a dehumanization, where people cannot control their activities without facing punishment," Huang said.
Addressing the Problem
As more and more courts hand down decisions, states could be in charge of making the standards clearer, Hoffman said.
"These issues need to be addressed at the state level, because we can expect nothing out of the federal government or Congress on this issue," Hoffman said. "So states need to be looking at these issues because they can regulate prison labor through their minimum wage, state minimum wage provisions."
Huang said that, on top of the states' effort, another approach would be to change the 13th Amendment, "but whether we can get the federal government to do anything functional is a separate issue."
Seann Malloy, the founder and managing partner at
Malloy Law Offices, said that during his experience in the management-side employment law world, he has seen how "prison labor occupies a very gray legal area" and "managing this terrain is tricky," especially when private companies subcontract with facilities or government entities.
Malloy said he tells his clients "to build guardrails — like clear documentation, voluntary participation, and modest compensation, to ensure that they don't become a subject of public scorn or liability."
--Additional reporting by Daniela Porat. Editing by Haylee Pearl.
Workers Behind Bars is a special series from Law360 exploring the push to end subminimum wages and forced labor for detained and incarcerated workers and the labor laws central to this dispute. Have a story idea for Access to Justice? Reach us at accesstojustice@law360.com.
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