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

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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.