GAO Finds Major Lapses at the Wage and Hour Division – National Consumers League

By Reid Maki, Director of the Child Labor Coalition

The tip call came into the U.S. Department of Labor (DOL) Wage and Hour Division (WHD) hotline: children were illegally working during school hours in a meatpacking plant in Modesto, CA, and they were operating dangerous equipment like meat grinders and circular saws. The caller was forced to leave a message because the hotline operators did not answer. What happened next? What did the people tasked with protecting child workers from dangerous and illegal activities? Nothing. For four months after the message was left, no action was taken. No one even responded to the call. And the call was not even logged into the Department of Labor case system. It just fell through the cracks. And apparently it wasn’t an isolated case.

The call was fictitious—a test being conducted by the Government Accountability Office, a government agency that frequently evaluates federal programs, and the Modesto case was fabricated to see how Wage and Hour would respond. The GAO presented its findings on Wednesday, March 25 at a hearing before the House Education and Labor Committee that raises a lot of concerns about the effectiveness of the DOL between July 2008 and March 2009 when the research was conducted. Last September, Sally Greenberg of the National Consumers League testified before Education and Labor’s Subcommitee on Workforce Protections, and asked for increased WHD enforcement, including a doubling of the number of WHD investigators.

Of the 10 fictitious calls GAO made to test WHD responses to possible workplace violations (mostly involving lost wages), WHD successfully investigated only one of the cases! Five of the cases were not even recorded into the WHD database of cases. In one case, the WHD investigator lied about a company’s profitability and claimed he was unable to investigate the case. In two of the cases, WHD recorded the cases as successfully resolved because the worker had been paid lost wages when no money had been actually paid. In one case, a caller left seven messages asking for help and none were returned. Some calls went straight to messages saying the office was closed when it was supposed to be open. In several cases, WHD investigators attempted to dissuade complaint filers by telling them that they faced an 8-10 month backlog or that they may be fired by their employer for filing a complaint.

Among the problems GAO found in the investigation:

  • The pre-recorded message at one WHD regional office hotline had a 23-second gap of silence before it went to voicemail. Customers with complaints thought they were disconnected and often hung up.
  • In WHD’s southeast division, which recorded 57 percent of the conciliations during fiscal year 2007, there was a policy of not recording unsuccessful conciliations in the WHD Database.
  • Staff in one field office said that they were required to drop a case if there were three unanswered phone calls made to an employer under investigation.
  • In 150 test calls, more than half went directly to voicemail with no phone calls ever returned.

GAO investigators also analyzed WHD records in 115 conciliated cases and 115 non-conciliated cases between October 1, 2006 and September 31, 2007 and found numerous flaws. Gregory Kutz, managing director of forensic audits and special investigations, told committee members that the system did not work for 19 percent of the complainants in the non-conciliated cases they looked at. In other words, one in five people who deserved help didn’t get it.

“This investigation clearly shows that the Department of Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn,” concluded investigators in their written report.

The one bright spot: GAO found that cases that were correctly entered into the system and acted upon were often resolved satisfactorily—even among nonconciliated cases, they found that 81.2 percent had been investigated and resolved appropriately.

The GAO felt that most WHD investigators were dedicated to their work and they did help recover an estimated $200 million in back wages. The GAO suggests that training and better tools—computers, databases, and software—might help eliminate some of the case failures. More investigators might help they said. The intake system certainly needs to be overhauled and all valid complaints must be entered into the WHD’s database, they maintained. They also suggested looking at expanding the current two-year stature of limitations on wage theft.

We’d like to point out that these alleged abuses occurred during the last administration and with a new WHD under Secretary of Labor Hilda Solis, who has a reputation as a friend of workers, we are hopeful that the system will be corrected. She has already called for hiring 250 new investigators. The GAO report suggests however that much work needs to be done.

Wisconsin Cracking Down on Dangerous Traveling Sales Crews – National Consumers League

Breaking news from Wisconsin, as reported by the Associated Press: state lawmakers moved Tuesday to approve the nation’s toughest regulations on companies that use traveling crews to sell products. The bill is expected to be signed into law, and this would put Wisconsin at the head of the pack for protecting kids from predatory traveling sales crews.

This is an issue that’s close to our heart at NCL, which operates the Child Labor Coalition. Working on a Traveling Sales Crew is one of the most dangerous jobs out there for kids, as we’ve reported annually in our Five Worst Teen Jobs. In 2008, Traveling Sales Crews was listed as the second most dangerous job.

Traveling sales might be a legitimate career choice for grown-ups, but our advice for parents is that they should not allow their children to take a sales job that requires them to travel. The dangers are just too great. Without parental supervision, teens are at too great a risk of being victimized by exploitative crew leaders, the dangers of the road, and more.

In May 2008, the Spokane, WA police investigated a 16-year-old’s claim that she was held as a captive worker by a traveling sales crew. She escaped after the crew leaders beat up her boyfriend because he wasn’t selling enough magazines.

Traveling sales companies often charge young workers for expenses like rent and food, requiring them to turn over any money they make from selling magazines or goods – which are sometimes scams against consumers based on products that don’t exist. When they try to quit or leave the crew, they are told they are not free to go. Not all sales jobs are on the avoid list. Teens considering a sales job that does involve door-to-door activity can check out these resources for determining whether it’s a good opportunity or one to run from.

Prof to Head Health IT – National Consumers League

by Mimi Johnson, NCL Health Policy Associate

The Obama Administration will announce its pick for the National Coordinator for health information technology later today. David Blumenthal, a professor at Harvard Medical School and director of the Institute for Health Policy at Massachusetts General Hospital will oversee the nearly $20 billion dollars from the economic stimulus package to build health IT. Dr. Blumenthal worked for Senator Ted Kennedy’s Senate Subcommittee on Health and Scientific Research in the 1970s, and we are optimistic that his knowledge of and history in health policy will help move this country towards significant health reform.

The Office of the National Coordinator (ONC), within the Department of Health and Human Services, will work to use the stimulus money to provide incentives and reimbursements for the use of “hardware, software, integrated technologies or related licenses, intellectual property, upgrades, or packaged solutions sold as services that are designed for or support the use by health care entities or patients for the electronic creation, maintenance, access, or exchange of health information.” According to the ARRA, “the National Coordinator may provide financial assistance to consumer advocacy groups and not-for- profit entities,” which should provide for a stronger consumer voice as the various health IT provisions are implemented. The ONC is establishing an HIT Policy Committee , on which a handful of consumer advocates will serve.

Still, billions of dollars are not the silver bullet to improving health care. In a report last week, the difficulties of adopting health IT were discussed. Doctors struggle to make the transition – especially those in small practices. The National Consumers League will continue to work to ensure that the expansion of health IT will work to help improve quality and access for patients, as well as reduce disparities.

CFA Hosts 2009 Consumer Assembly – National Consumers League

By Sally Greenberg, NCL Executive Director

The Consumer Federation of America held its 2009 Consumer Assembly this past weekend. CFA was formed in the 1970s by consumer leaders like Rhoda Karpatkin of Consumers Union who felt that consumer organizations needed a kind of federation on the model of the AFL-CIO to speak with one voice on the broad swath of consumer issues across the nation. The National Consumers League held a seat during the first years of CFA’s activism.

Last week’s consumer confab comes amidst recent seismic changes in Washington. We have a new Administration that is more consumer-friendly, a new Congress that promises to be more inclined to support pro-consumer legislation, and a newly invigorated consumer movement that has never worked so hard in its life! The CFA gathering featured appearances by key congressional figures including: House Energy and Commerce Committee Chairman Henry Waxman (D-CA), talking about Obama’s intention to make the private health insurance companies part of our system of providing health care to all; Congresswoman Jan Schakowsky (D-IL), lamenting the lack of a Chairman of the Consumer Product Safety Commission; and product safety and Senate Banking Chairman Christopher Dodd (D-CT), reiterating the importance of the consumer voice as we see the nation’s financial service industry in a free-fall.

Reform is very much on the agenda on the range of consumer issues from food safety to health care to eradicating lead in children’s toys, to overhauling our financial service industry and tightening up our securities markets. This is a unique moment in history for consumer groups. NCL is supporting tighter regulation of financial services, a cap of 36 percent cumulative on interest consumers may be forced to pay, crackdown on payday lending, requiring the Cost Approach when evaluating a home’s worth, a consumer advisor to the President with an office in the White House, and vigorous enforcement of the laws from the FDA to the National Highway Traffic Safety Administration.

Though there are some awesome challenges, I believe this is a great time for consumers. As the President’s Chief of Staff Rahm Emanuel has been known to say, “Never let a crisis go to waste.” I hope consumer groups take his advice!

Rescuing Emmanuel – National Consumers League

By Rubkwan Tharmmapornphilas, Ph.D., Child Labor Coalition Intern

Rubkwan is a child labor public policy intern at the National Consumers League. She is a Ph.D. graduate from Columbia University and a Thai Government Scholarship recipient. Her doctoral thesis was on the determinants of child labor in Thailand, where she will return to work as a government officer in the Ministry of Education once her internship is completed.

Do you know someone who is invisible? No, I don’t mean Kevin Bacon in “Hollow Man” or Jessica Alba in “Fantastic Four.” I mean a person who could easily disappear one day and no one would notice. If not, then let me introduce 13-year-old “Emmanuel,” one of the world’s 140 million street kids—“throw away” children who are left to fend for themselves in city slums around the globe.

In the compelling documentary film “Rescuing Emmanuel” (released in 2008), Len and Georgia Morris followed the life of street kids in Kenya, Brazil, Mexico, India, Indonesia and the United States. These children have no birth certificate, ID card, money, home, or family. They live on the margins, neglected and ignored by communities, societies, and government. Emmanuel and his friends struggle to survive day by day, working, begging, stealing, and selling their bodies. Hunger, violence, abuse, drugs, crime, HIV, and other diseases are common in their daily lives.

The street children are in desperate need of a better life, and they seize any tiny bit of opportunity. In the case of Emmanuel, he stole Glen and Georgia’s attention by shouting in broken English, “I want to go to school right now!”

Touched by Emmanuel and his demand, the Morrises decide they must act and help him. They place him in Huruma Children’s Home, founded by Mama Zipporah and home to 150 abandoned and abused kids.

Although it might seem hopeless to help just one kid while millions of others are still out there on streets, the Morris’s action reminds me of Loren Eiseley’s “The Star Thrower”, the story about a person walking on the beach who encounters stranded starfish and decides to save some of them by throwing them back in the sea. When asked why he is saving a handful of starfish when thousands more will go unsaved—whether, in fact, his actions are really making a difference, the Good Samaritan throws one more starfish into the sea and says, “ I made a difference to that one.”

“Rescuing Emmanuel” shows us just how vulnerable children are in many parts of the world. It’s a haunting story but one that needs to be witnessed.

Ordering information for “Rescuing Emmanuel” may be found at Galen Films also produced “Stolen Childhoods” (2003), a wonderful feature- length examination of child labor around the world.

What Do Somalia and the United States Have in Common? – National Consumers League

by Reid Maki, Child Labor Coalition Coordinator

You might be inclined to say “not much” since, as the New York Times noted, for the last 17 years Somalia has been ripped apart by anarchy, violence, famine, and greed. Yet, the United States and Somalia are the only two nations that belong to the United Nations and have not formally signed the Convention on the Rights of the Child (CRC).

To date, 193 countries have signed the convention, which requires countries to abide by and work toward a set of principles regarding the way children should be treated. The United Nations Committee on the Rights of the Child monitors the progress being made by each country and files an annual report, helping to highlight problems and create incentives for remediation.

Admittedly, children in the United States do not suffer the types of exploitation that others do in some of the countries that have signed the CRC, but the American refusal to sign this basic international convention is mystifying and disappointing. In 1995 Madeleine Albright, acting as a delegate to the UN, signed the CRC on behalf of President Clinton, but the convention has not been ratified by Congress.

Some believe that one obstacle to the signing has been death penalty cases that involve executing minors, which would be banned under the CRC. Some conservatives have argued that the international treaty might interfere with parental rights.

At the National Consumers League, we believe that these concerns are not well founded and that children should have the right to a free, healthy, and productive life—and that international treaties that declare basic rights be entitled to children can play a beneficial role in advancing children’s interests. As the film Slumdog Millionaire made clear, there are still parts of the world where children are horribly abused—possibly even maimed—so that they can earn more money.

One CRC article that particularly interests us at the League is Article 32 on Child Labor: “Governments should protect children from engaging in work that is dangerous, inhibits their ability to obtain an education, or jeopardizes their health and overall development. Governments are responsible for setting a minimum age limit for employment, regulating the hours and conditions of employment, and establishing and enforcing sanctions against those who violate such provisions.”

Many of the 30-plus members of the Child Labor Coalition, which NCL coordinates, believe that the United States may actually be in violation of this article because migrant farmworker children are allowed to work at such young ages (12 and 13), are exposed to pesticides and other occupational hazards, and suffer an alarming school dropout rate. We don’t understand why the United States would have a minimum work age for one industry—agriculture—that is different than that in other industries. Why should a 12-year-old onion harvester be legally allowed to work for 12 hours in 100-degree heat when that same child cannot legally work in an air-conditioned office?

The CRC articles are very straightforward principles that the rest of the world has readily agreed upon: children have the right to survive, they should not be trafficked or exploited sexually, and they should not be allowed to fight in wars. The time has come to pass this much-needed international treaty. When he was in the U.S. Senate, Barack Obama endorsed the CRC.

To learn more about the CRC and its ratification, please visit the Campaign for U.S. Ratification of the Convention on the Rights of the Child.

Statement of Support from the National Consumers League on the Introduction of the Employee Free Choice Act – National Consumers League

The National Consumers League (NCL) today issued the following statement regarding the introduction in the U.S. House of Representatives and U.S. Senate of the Employee Free Choice Act (EFCA).  This statement is attributable to Sally Greenberg, Executive Director of the National Consumers League:

“We applaud the introduction of the Employee Free Choice Act in Congress.  Throughout its 109 year history, the League has been dedicated to promoting social and economic justice for consumers and workers.  NCL strongly believes that consumer empowerment is closely aligned with the rights of workers to unionize,” said Greenberg.  “In a time of economic turmoil with consumers faced with massive debt, high unemployment, and too many instances of corporate greed, it is more important than ever for workers and consumers to band together to help rebuild the middle class.”

In a December 2008 letter to Congress, NCL joined with six other consumer groups in a statement of support for EFCA. In that letter, the groups laid out three major consumer benefits of EFCA, including:

  1. Giving workers a fair and direct path to form unions through majority sign-up. EFCA would require an employer to recognize its employees’ union when a majority has signed union authorization cards. Under current law, management can refuse to recognize a union even when 100 percent of employees have signed authorization cards. After a majority of workers have signed cards, an employer can still call for a separate election. Under the current system, then, the employer gets to decide whether a separate election is necessary.
  2. Helping employees secure a contract with their employer in a reasonable period of time. Under current law, anti-union employers often drag workers through lengthy negotiations by delaying bargaining sessions, withholding relevant information, and putting forth bogus proposals. Even though these tactics are illegal, there are no effective deterrents to prevent “surface bargaining.” The Employee Free Choice Act will strengthen workers’ ability to achieve a first contract within a reasonable period of time.
  3. Toughening penalties against employers who violate their workers’ rights. Too many unscrupulous employers get away with breaking labor laws because the current penalties are too weak. The Employee Free Choice Act would increase penalties against employers who illegally fire or retaliate against pro-union workers.

To read more about NCL’s support for EFCA, click here.

Lessons from National Consumer Protection Week – National Consumers League

By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

On Saturday, March 7, the annual observance of National Consumer Protection Week (NCPW) will come to a close.  News articles have been written about it and a presidential proclamation has been issued.  The National Consumers League has been proud to again be a member of the national steering committee for NCPW.

But NCPW does not HAVE to end at midnight Saturday night.  In the current economic environment, the opportunities for scammers to bilk desperate consumers out of their depleted wealth have rarely been greater.  Now, more than ever, it is important that consumers take the lessons of NCPW to heart to help avoid becoming another number in the billion-dollar fraud statistics.

The theme of this year’s NCPW is “Nuts & Bolts: Tools for Today’s Economy.”  Given the immense resources available to help consumers protect themselves and become more informed, this theme is especially apt.  The Federal Trade Commission’s NCPW website provides a wealth of governmental resources that consumers can use to get educated about a variety of consumer topics.  In addition, there is a great outreach toolkit so consumers can talk to their local media, government officials, bloggers, and friends to spread the work about NCPW.

Con-artists have found out that the Internet is an enormously powerful tool for reaching victims.  However, the power is not just in the scammers’ hands.  Thanks to tools like the ones detailed on the NCPW site, NCL’s own, and in literally hundreds of others a quick Google search away, consumers can turn the table on the scammers and use the power of the Internet to get informed and stay one step ahead of the fraudsters.

Lose your job? You don’t have to lose your insurance too… – National Consumers League

By Mimi Johnson, NCL Health Policy Associate

… Or all your money trying to pay for it! Thanks to the American Recovery and Reinvestment Act of 2009 (ARRA) passed by Congress and signed into law by President Obama last month, COBRA premiums are shrinking. This brings needed support to the many thousands of people who have lost their jobs – and their health insurance. Traditionally, COBRA coverage requires the former employee to pay 100 percent of the premium plus an additional 2 percent for “administrative costs”, but under the ARRA, those eligible will only have to pay 35 percent of the premiums. To see if you qualify, visit the Department of Labor’s site.

While the League envisions a day when all Americans have access to affordable coverage regardless of employment status, we applaud policy makers for taking a step to prevent even more citizens from losing their coverage.

Generation LifeSmart – National Consumers League

Since it’s National Consumer Protection Week and all, we thought it would be a nice time to honor the volunteers who make our LifeSmarts program the success it is, year after year. (15, in fact!)

If you’re not familiar, LifeSmarts is a program of the National Consumers League that teaches teens and ‘tweens the kind of important life lessons that many generations before them have learned the hard way. LifeSmarts is a fast-paced competition that starts online, at the state level. Teams of teens (in the Varsity program, it’s high school students; in the newer JV program, it’s middle school) compete online against others from their state. Many states have in-person competitions to determine who will represent them at nationals, and each spring, state champion teams travel to a city (this year, it’s St. Louis) to compete for the national championship title.

The idea behind LifeSmarts is simple: why not teach kids the kinds of things they’ll need to know to be a good consumer before they have to face real-life tests? As home ec. and “checkbook math” classes have been phased out of school curriculum across the country — and as the consumer marketplace continues to reveal itself to be so filled with pitfalls — LifeSmarts seems to be more necessary now than ever before.

This year’s National Consumer Protection Week’s theme is “Nuts and Bolts: Tools for Today’s Economy – a perfect fit for LifeSmarts — and a perfect time to celebrate the people who help make it happen: more than 30 volunteer State Coordinators who run the programs in their states; the volunteers who serve as judges and other competition officials; the many companies, organizations, and government offices that provide the financial support to sustain the program; and the thousands of coaches across the country who spend long hours prepping their teens for competition, raise funds to get to nationals, and help spread the word about LifeSmarts.

Recently, at the Missouri state LifeSmarts competition, a volunteer judge had this to say about the program:

“As a former teacher, I fully believe that this competition helps promote
leadership and intellectual curiosity. It is a wonderful opportunity for
all the students involved.”

He’s right! Get to know LifeSmarts today – and follow our fun and competition in St. Louis at our nationals blog, starting April 24.