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Two reports from the Government Accountability Office (GAO) sharply critical of enforcement efforts by the U.S. Labor Department’s Wage and Hour Division (WHD) drew the attention of the House Education and Labor Committee for more than two hours during a hearing on July 15, 2008.
One of GAO reports examined how the WHD uses its resources to enforce federal wage-and-hour laws. The GAO researchers found fault with many of the division’s practices, saying that miscommunication and poor coordination of staff and resources had hampered the WHD’s ability to enforce the law.
“In planning and conducting its compliance activities, the WHD did not effectively take advantage of available information and tools,” said Anne-Marie Lasowski, the GAO’s action director of education, workforce and income security, during her testimony to the committee. “Specifically, the WHD did not use information, including data on complaints and input from external groups, such as employer and worker advocacy organizations, to inform its planning efforts.”
While enforcement efforts at the WHD face a number of challenges, the way the agency measures its success and effectiveness might be one of the biggest stumbling blocks to getting a clear picture of how well federal wage and hour laws are enforced.
“While the WHD is responsible for protecting some of the basic rights of U.S. workers by enforcing the FLSA (Fair Labor Standards Act), the agency does not know how effectively it is doing so,” Lasowski said. “As with all government agencies, WHD must determine how to strategically manage its limited resources and help ensure the most efficient and effective outcomes.”
Reasons for Less Enforcement
Lasowski pointed to the fact that the number of enforcement actions conducted by the WHD dropped around 30 percent from approximately 47,000 in 1997 to slightly less than 30,000 in 2007. Officials with the WHD attribute the drop to three factors: more comprehensive and in-depth investigations, better screening procedures and WHD staff reductions.
According to Lasowski, the number of WHD investigators decreased by 200 or nearly 20 percent during the 10-year period examined by the GAO—1997-2007. The GAO research revealed that the WHD had trouble dealing with the loss of personnel and resources and that the cuts in staff hurt the agency’s performance.
Alexander Passantino, acting administrator for the Wage and Hour Division, disagreed with many of the GAO’s findings, claiming that the research gave a distorted view of the WHD’s record of enforcement.
“Despite spending more than a year on the audit, the GAO lacks a fundamental understanding of so many things about the Wage and House Division,” Passantino told the committee. “The GAO is wrong on where independent reports tell us to focus our resources and wrong on where the agency should be focusing its resources.”
While Passantino criticized the GAO reports, he conceded that the agency suffers from lack of resources. He added that recent requests for additional funding to help bolster the agency’s enforcement efforts have been denied. Passantino contended that, according to several different measures, the WHD’s performance has improved over the past 10 years.. He pointed to the fact that in 2007 the agency helped workers recover a record $220 million in back wages.
However, testimony from Gregory Kutz, the GAO’s managing director forensic audits and special investigations, showed that WHD has mishandled some recent investigations.
Kutz told the committee that it was unclear whether the 15 cases examined by the GAO were anomalies or “indicated a systemic problem with the agency’s enforcement efforts.” Kutz went on to say that his research was aided by several former WHD staff members who wanted to bring the agency’s enforcement problems to light.
‘Investigation Was Inadequate’
“For these 15 cases we found that the Labor Department’s investigation was inadequate,” Kutz said. “In some cases, very little effort was expended before the case was closed, and in other cases, the case was closed because the two-year statute of limitations was about to expire.”
Kutz outlined several of the cases such as one that was closed when the investigator could not find the employer. Kutz said an Internet search and phone call from GAO staffers had quickly identified and located the employer. He described several cases in which the WHD found that employees were owed wages but then did little or nothing to follow up and help the plaintiffs collect their money.
“I can’t tell you whether these cases are isolated or whether they are the tip of the iceberg,” Kutz said. “What is clear is that in these cases the employers got away with labor law violations with no consequences. If the Labor Department’s mission is to truly protect our nation’s workforce, then these cases indicate that they have a ways to go.”
Rep. George Miller, D-Calif., chair of the Education and Labor Committee, had requested the reports from the GAO and said that he was disturbed by the findings. He stated that more needed to be done to enforce federal wage and hour laws and that it was the responsibility of the committee to find solutions.
“Although the Department of Labor has the necessary tools to fight wage theft, the GAO investigation suggests that the problem of wage theft is only getting worse because of weaker enforcement,” said Miller. “In too many cases, the Wage and Hour Division has simply dropped the ball in pursuing employers that cheat its workers out of their hard earned wages.”
Other members of the committee were more skeptical of the GAO reports and claimed that the hearing on enforcement of wage and hour laws was misguided.
“Americans are paying $4.11 per gallon. It’s time for this Congress to stop ignoring the economic 800-pound gorilla in the room and finally take action to put America on the path to economic recovery through energy independence,” said Rep. Howard P. McKeon R-Calif., the ranking GOP member of the committee. “Workers’ wages are being stretched thinner every day because of the failure to bring down high gas prices. It’s time for action.”
Bill Leonard is senior writer for SHRM Online.
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