July 15, 2008
Department Is Criticized on Disputes Over Wages
By STEVEN GREENHOUSE
The Government Accountability Office sharply criticizes the Wage and Hour Division of the Labor Department in two reports to be issued on Tuesday, saying it mishandled many overtime and minimum-wage complaints and delayed investigating hundreds of cases for a year or more.
The G.A.O. also criticizes the division for greatly reducing the number of enforcement actions it takes each year and for not focusing on the low-wage industries where, one report said, it is most likely to find violations.
The accountability office, the investigative arm of Congress, singled out a case in which a truck driver for an alcohol distributor complained that he was not paid overtime even though he worked 55 hours a week. The Wage and Hour Division waited 17 months before assigning an investigator, the office found, and the investigator dropped the case six months later — after doing virtually no investigating — having concluded that the two-year statute of limitations was about to expire.
The office cited another case in which a gas station cashier earning $7.50 an hour complained about not receiving her final paycheck. One of the owners acknowledged that to the wage investigator and said to call back in five days when his partner returned. The investigator did call five days later, but after the gas station did not return several calls, the investigator dropped the case.
The G.A.O., which will release its reports at a hearing of the House Education and Labor Committee, also faulted the wage division for reducing the number of enforcement actions it pursues each year to 29,584 in the 2007 fiscal year, down 37 percent from 46,758 10 years earlier.
According to his prepared remarks, Representative George Miller, Democrat of California and chairman of the Education and Labor Committee, will tell the hearing, “Although the Department of Labor currently has the necessary tools to fight wage theft, the G.A.O. investigation suggests that the problem of wage theft is only getting worse because of weaker enforcement.”
The Wage and Hour Division defended its performance, saying it reduced the number of enforcement actions largely because it was focusing on more time-consuming, comprehensive investigations. Other reasons it gave were improved screening of complaints to eliminate those that may not be violations and a decrease in the number of investigators covering more than 100 million workers — to 732 in the 2007 fiscal year from 945 in 2001.
In a fact sheet, the Labor Department noted that the back wages collected by the Wage and Hour Division more than doubled to $220,613,703 in 2007 from $96,719,108 in 1997. It said that 341,624 employees received back wages in 2007, up from 189,244 10 years earlier.
One G.A.O. report noted that the back wages collected per case had nearly doubled to $10,500 in 2007, from $5,400 in 2000.
The Labor Department said the “Wage and Hour Division is delivering pay for workers, not a payday for trial lawyers.”
In a report that took a close look at 15 wage cases and sifted through Labor Department data, the G.A.O. concluded that the Wage and Hour Division had inappropriately rejected complaints based on incorrect information provided by employers, failed to make adequate efforts to locate employers and did not thoroughly investigate and resolve complaints.
The accountability office said it found more than 100 cases that were closed because the wage division could not locate an employer, and 350 cases that were assigned to an investigator more than a year after the complaint was received.
One report examined a case in which a pool maintenance technician had complained about not receiving a final paycheck. The employer admitted that it did not issue that check, but then berated the wage investigator, saying it would not pay the back wages. Afterward, the investigator dropped the case.
In another case, a homeless woman who worked as a night attendant at an assisted-living facility complained that she had not been paid any wages for more than a year. The employer argued that it did not have to pay wages because it provided her with room and board. The Wage and Hour Division concluded that the employer owed her $4,500, but the investigator nonetheless dropped the case after the employer asserted in August 2006 that it was in such dire shape that it did not have any money to pay back wages. The G.A.O. noted that the employer was still in business.
“In too many cases,” Mr. Miller said, “investigators from the Wage and Hour Division simply drop the ball in pursuing employers that cheat their employees out of their hard-earned wages.”
The G.A.O. said the wage division focused on the same industries in 2007 as in 1997 despite recommendations that it focus on low-wage industries where wage violations were most likely to occur.
“As a result,” the office wrote, “the Wage and Hour Division may not be addressing the needs of workers most vulnerable to Fair Labor Standards Act violations.”
But the Wage and Hour Division said it had broadened its efforts beyond agriculture, health care and apparel manufacturing to include other low-wage businesses, including day care, restaurants, construction and hotels.