The Outside Counsel Contingency-Fee Model for Workers' Rights Enforcement

A new white paper co-issued by Terri Gerstien of the NYU Wagner Labor Initiative, and the National Institute of Workers' Rights explores a model in which state and local government agencies contract with public interest or private law firms to bring worker' rights enforcement actions as outside counsel on a contingency-fee basis. Under this arrangement, the paper explains, the government pays nothing out of pocket; outside counsel is compensated only from successful recoveries, typically at a reduced "government rate." 

"Workers’ rights enforcement in the United States faces a convergence of crises," according to the authors of this pattern-breaking proposal. "Employers steal an estimated $15 billion annually in wages through minimum-wage violations alone, while federal enforcement has collapsed—wage-and-hour cases by the U.S. Department of Labor fell 97% during the first year of the second Trump administration. In May 2025 the DOL Wage and Hour Division had just 611 investigators for roughly 170 million workers (one per 278,000), compared with one per 73,000 in 1973. State agencies are similarly understaffed and stretched thin by other federal-related litigation and budget constraints. Meanwhile, forced arbitration—covering an estimated 80% of private-sector non-union workers—paired with class-action waivers blocks workers from holding employers accountable in court, making government enforcement the only realistic avenue for many."