When the Department of Labor announced in mid-May that the multiple Eclipse Award-winning trainer Chad Brown had reached a settlement requiring him to pay $1.6 million in back wages and fines for labor-law violations, many racing observers gasped at the enormity of the settlement and its seismic potential for repercussions on the backstretches of racetracks across the U.S. The settlement, which affected 182 hotwalkers and grooms who worked in Brown’s multi-state operation under the H-2B visa program over a roughly three-year period, was an outlier in one important sense: Horsemen and labor-law specialists said that they had never heard of such a large judgment against one trainer. However, in another sense, it was not unique, but rather part of a larger trend, according to those same officials. “We’re living in an unprecedented culture of investigation and enforcement,” said Leonard D’Arrigo, an Albany-based labor-law attorney who has New York trainers as his clients, among other industries that use guest workers. “The overarching philosophy of the current [White House] administration is that we are no longer going after the workers, we are going after the employers, because they are the impetus behind all these workers coming into the country. And in many cases, racetracks and farms are the low-hanging fruit.” Brown is not the only New York trainer to be targeted by the Department of Labor. After the settlement was announced, three trainers – Kiaran McLaughlin, Gary Contessa, and George Weaver – acknowledged that they too were being audited for labor practices. Other horsemen said they knew of several other New York trainers currently being targeted. Another high-profile trainer, Linda Rice, reached a settlement with the Department of Labor last year, in a probe, she said, that stretched back to late 2016. The investigations, whatever the motivations, have the potential to radically upend pay practices on U.S. backstretches, which for decades upon decades have relied on immigrants and marginalized populations for menial jobs. Those workers were almost universally paid on a weekly basis, sometimes in cash, for jobs in which the hours are generally erratic and often stretch well beyond the standard 40-hour work week. According to horsemen’s officials in racing jurisdictions across the U.S., New York appears to be the primary focus of the Department of Labor, at least at this time. The officials said that they have not heard of widespread audits on the backstretches of other circuits, despite pay and labor practices that are similar, if not identical to, the practices in New York. That introduces the possibility that New York is a stepping-stone toward other jurisdictions, although one labor lawyer who did not want to be identified because he has clients under audit said that he felt the Brown settlement was a signal to the rest of the industry. “They’re setting an example,” the lawyer said. “They know everyone is watching now. They went out to get a big-name trainer to throw the book at him and announce a record fine. And, no doubt about it, people are taking notice.” The attorney who represented Brown in his settlement, Allan Bloom, declined to comment. Joseph Appelbaum, the president of the New York Thoroughbred Horsemen’s Association, said that he did not believe that trainers on the New York circuit were systematically underpaying their workers. Instead, trainers in New York and other circuits have not adequately modified their payroll practices to reflect modern wage and hour laws, especially in the area of maintaining accurate records. “I don’t think [underpaying workers is widespread],” Appelbaum said. “For the most part our trainers are doing the right thing, but I think the intricacies of the rules need to be understood better, and I think guys could be doing a much better job with record-keeping.” The case against Brown lays out those concerns in detail. In his negotiated settlement, Brown acknowledged a long list of “willful violations,” including failing to keep adequate payroll records for employees that “regularly worked upwards of 51 hours per week, with some working as many as 60 or more hours a week.” The settlement also said that Brown attempted to reclaim costs associated with the workers’ H-2B visa applications, as well as “regularly” denying workers the pay that was promised to them. The H-2B visa program is used by trainers across the country to fill the most bottom-rung positions on the backstretch – grooming and hot-walking. Under the program, immigrants can work in the U.S. provided they return to their home countries annually. Employers must comply with a laundry list of requirements, such as paying the workers at the same rate as the lowest-paid U.S. worker in the operation and only applying for the visas after posting advertisements for the jobs among U.S. citizens. Employers must also pay the travel costs of workers to and from their home countries. Trainers and labor-law specialists say that it is extremely hard to find U.S. workers for the positions. Making matters worse, the current White House administration has taken a dim view, politically, on any programs that use immigrant labor. The number of H-2B visas available each year for U.S. businesses has gyrated wildly over the past two years, as the White House presses for restrictions even as Congress and the Labor Department quietly acquiesce to demands from U.S. employers. Rice said that her audit began late in 2016, but unlike the other probes involving New York trainers, hers did not revolve around guest workers, as she only employs U.S. citizens. But like the Brown case, Rice said that the audit mostly centered on whether she was keeping adequate records for the amount of hours that her employees worked, and whether the wages she paid complied with state and federal laws. One of the complications in Rice’s case, and probably in the other cases, was that wage laws differ between New York’s five boroughs, Nassau County on Long Island, and Saratoga, where New York’s three major racetracks are located. Another was that the auditors did not consider weekly pay to be an adequate payroll procedure, Rice said. “We were always in compliance with paying wages,” Rice said. “That was never in issue. The biggest change was that they were basically imposing an hourly wage, whereas the industry has been paying a weekly wage for, I don’t know, the last hundred years.” Rice settled the case for approximately $110,000 in back wages and fines, and she has installed a facial-recognition time clock for her workers. She also said that she had to cut back the hours that her employees worked at Aqueduct because the minimum wage in Queens is much higher than that in Nassau County and Saratoga, so that “we’re paying the same amount as we do at the other places.” She said her payroll costs had not increased significantly as a result of the settlement. Hilary Moreira, a Long Island labor-law attorney who has been hired by the New York THA to conduct seminars for trainers on compliance with state and federal labor regulations, said that trainers often complain that the rules are not designed to account for some of the “unique” aspects of backstretch work, such as the split shifts that many grooms work on a daily basis. “The problem is that trainers always say that there should be wage and hour laws specific to their industry,” Moreira said. “But there are no special rules, and until that changes, they’ve got to comply. Sometimes that’s very challenging, kind of like sticking a square peg in a round hole.” Moreira also said that the breadth and depth of the labor laws make compliance nearly impossible, a point echoed by D’Arrigo. “Wage and hour laws are complicated,” she said. “It’s likely I could go into an employer, any employer, and find that they are doing something wrong.” But unlike D’Arrigo, she said she was not surprised that federal labor investigators have landed on the backstretch, and she predicted that the scrutiny may be short-lived. “It’s not necessarily uncommon [that labor investigators focus on a single industry],” she said. “It’s how they work. They will decide ‘we’re going to target this industry this year.’ So one year it was car washes, the next year it was supermarkets, the family-run operations, the next year it was landscaping. It’s how they move. They go to an industry for a short time and then they move on.”