Department of Labor: Wage and Hour Division Needs Improved Investigative Processes and Ability to Suspend Statute of Limitations to Better Protect Workers Against Wage Theft
Published: 2009-06-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The mission of the Department of Labor's Wage and Hour Division (WHD) includes enforcing provisions of the Fair Labor Standards Act (FLSA), which is designed to ensure that millions of workers are paid the federal minimum wage and overtime. Conducting investigations based on worker complaints is WHD's priority. On March 25, 2009, GAO testified on its findings related to (1) undercover tests of WHD's complaint intake process, (2) case study examples of inadequate WHD responses to wage complaints, and (3) the effectiveness of WHD's complaint intake process, conciliations (phone calls to the employer), and other investigative tools. To test WHD's complaint intake process, GAO posed as complainants and employers in 10 different scenarios. To provide case study examples and assess effectiveness of complaint investigations, GAO used data mining and statistical sampling of closed case data for fiscal year 2007. This report summarizes the testimony (GAO-09-458T) and provides recommendations.
section_title: What GAO Found
paragraphs: GAO found that WHD frequently responded inadequately to complaints, leaving low wage workers vulnerable to wage theft and other labor law violations. Posing as fictitious complainants, GAO filed 10 common complaints with WHD district offices across the country. These tests found that WHD staff deterred fictitious callers from filing a complaint by encouraging employees to resolve the issue themselves, directing most calls to voicemail, not returning phone calls to both employees and employers, and providing conflicting or misleading information about how to file a complaint. An assessment of complaint intake processes would help ensure that WHD staff provide appropriate customer service. To hear clips of undercover calls illustrating poor customer service, see http://www.gao.gov/media/video/gao-09-458t/ . According to WHD policies, investigators should enter all reasonable complaints into WHD's database. However, even though all of GAO's fictitious complaints alleged violations of the laws that WHD enforces, 5 of 10 complaints were not recorded in WHD's database. In addition, WHD policy in one region instructs staff not to record the investigative work done on small cases in which the employer refuses to pay, making WHD appear better at resolving these cases than it is. Reassessing its processes for recording complaints would help WHD ensure that all case information is available. Similar to the 10 fictitious scenarios, GAO identified 20 cases affecting at least 1,160 real employees whose complaints were inadequately investigated by WHD. Five of the cases were closed based on false information provided by the employer that could have been verified by a search of public records, such as bankruptcy records, but WHD investigators do not have access to publicly available or subscription databases. In another case, the employer claimed that the company did not meet the income requirement to be covered under federal law but did not provide documentary evidence. WHD investigators do not have access to income information collected by the Internal Revenue Service and were unable to verify the employer's claim. Obtaining more research tools and implementing information sharing processes with other agencies would assist WHD in verifying employer-provided information. GAO's overall assessment found ineffective complaint intake and investigation processes. WHD officials often told GAO that WHD lacks the resources to conduct an investigation of every complaint, allowing employers in some small cases to avoid paying back wages simply by refusing to pay. GAO found that WHD's investigations were often delayed by months or years. Monitoring the extent to which WHD staff are able to handle the volume of complaints would provide assurance that WHD has sufficient resources available. Under FLSA, the statute of limitations is 2 years from the date of the violation, meaning that every day that WHD delays an investigation, the complainant's risk of becoming ineligible to collect back wages increases. However, in several offices, backlogs prevent investigators from initiating cases within 6 months. Suspending the statute of limitations during a WHD investigation would prevent employees from losing back wages due to delays.

section_title: Letter
paragraphs: On March 25, 2009 we testified before the committee on findings related to  our investigation of the Department of Labor’s (Labor) Wage and Hour  Division (WHD) processes for investigating and resolving labor  complaints. As we previously reported, over 100 million workers are  covered under labor laws enforced by WHD, including the Fair Labor  Standards Act (FLSA), the Migrant and Seasonal Agricultural Worker  Protection Act, the Family and Medical Leave Act, Davis-Bacon and  related acts, and other federal labor laws. By law, WHD investigators and  technicians enforce labor laws governing issues such as minimum wage,  overtime pay, child labor, and family medical leave. Conducting  investigations based on complaints is WHD’s first priority.
WHD investigators can take actions ranging from making phone calls to  the complainant’s employer (known as conciliations) to taking other, more  resource-intensive actions such as interviewing the employer and related  witnesses, reviewing employer payroll records, and requesting copies of  self audits conducted by the employer. Conciliations are generally limited  to a single, minor violation, such as a missed paycheck or an issue  affecting a single worker. A conciliation is used to resolve a complaint  quickly and with minimal resources on the part of WHD. Investigative  work for conciliations is generally limited to a telephone conversation in  which the WHD investigator explains the specific complaint against the  employer, describes applicable laws, and requests that the employer  comply with the law and pay any back wages due. In investigations, when  WHD determines that violations have occurred and computes back wages  owed to workers, it can assess back wages to be paid to the employees  and can impose monetary penalties against employers with repeated or  willful violations. Our testimony had findings related to (1) undercover  testing of WHD’s complaint intake and conciliation processes, (2) case  study examples of inadequate WHD responses to complaints, and (3) the  effectiveness of WHD’s complaint intake process, conciliations, and other  investigative tools. This report summarizes our testimony, which is  reprinted in appendix I, and offers a matter for congressional  consideration and makes specific recommendations to Labor for  corrective actions.
To test the effectiveness of WHD’s complaint intake process and  conciliations, undercover GAO investigators posed both as complainants  and employers. Using 10 fictitious scenarios including minimum wage, last  paycheck, and overtime violations, investigators called WHD offices in  Alabama, California, Florida, Maryland, and Texas posing as complainants.  These field offices handled 13 percent of all cases investigated by WHD in  fiscal year 2007. When WHD investigators attempted to follow up on the  complaints, different undercover investigators posed as the employers and  followed a variety of scripted scenarios to test how WHD investigators  would respond. For more information, refer to  http://www.gao.gov/media/video/gao-09-458t/.
To identify case studies of inadequate investigations conducted in  response to actual employees’ allegations of wage theft, we obtained  Labor’s Wage and Hour Investigative Support and Reporting Database  (WHISARD) and data-mined for closed cases in which it took WHD more  than one year to complete an investigation, an employer could not be  located, or the case was dropped when an employer refused to pay. We  analyzed WHD’s WHISARD database and determined it was sufficiently  reliable for purposes of our audit and investigative work. We also obtained  and analyzed WHD case files, interviewed WHD officials, and reviewed  publicly available data to gather additional information about these cases.
To determine the effectiveness of WHD’s complaint intake process,  conciliations, and other investigative tools, we used the results of our  undercover tests, case studies, interviews, and discussions of the  processes with management, and two statistical samples. We selected a  random statistical sample of 115 cases from 10,855 conciliations and 115  cases from 21,468 non-conciliations recorded by WHD in WHISARD that  were concluded between October 1, 2006, and September 30, 2007. We  obtained and reviewed WHD’s case files for the selected cases and  performed tests to determine whether the investigations conducted were  adequate. We subsequently determined through our interviews that the  population of conciliations sampled was substantially incomplete.  Therefore, we were only able to project sample results to conciliations  that WHD chose to enter into its database rather than the entire population  of conciliations. See appendix I for more information on our methodology.  In addition, we reviewed relevant laws and policies and conducted  interviews with agency officials.
We conducted our forensic audit and related investigations from July 2008  through May 2009. We conducted our audit work in accordance with  generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on our  audit objectives. We conducted our investigative work in accordance with  the standards prescribed by the Council of the Inspectors General on  Integrity and Efficiency.
subsections: section_title: Undercover Tests Reveal Inadequate Investigations and Poor Complaint Intake Process
paragraphs: In our testimony, we stated that the results of our undercover tests  illustrated flaws in WHD’s responses to wage theft complaints, including  delays in investigating complaints, failure to use all available enforcement  tools, failure to follow up on employers who agreed to pay, an ineffective  complaint intake process, and complaints not recorded in the WHD  database. WHD successfully investigated 1 of our 10 fictitious cases,  correctly identifying and investigating a business that had multiple  complaints filed against it by our fictitious complainants.
Our undercover tests revealed that WHD’s complaint intake process is  time-consuming and confusing, potentially discouraging complainants  from filing a complaint. Of the 115 phone calls we made directly to WHD  field offices, 87 (76 percent) went directly to voicemail. While some offices  have a policy of screening complainant calls using voicemail, other offices  have staff who answer the phone, but may not able to respond to all  incoming calls. In one case, WHD failed to respond to seven messages  from our fictitious complainant, including four messages left in a single  week. In other cases, WHD delayed over 2 weeks in responding to phone  calls or failed to return phone calls from one of our fictitious employers.  One of our complainants received conflicting information about how to  file a complaint from two investigators in the same office, and one  investigator provided misinformation about the statute of limitations in  minimum wage cases. In one case, a WHD investigator lied to our  undercover investigator about confirming the fictitious businesses’ sales  volume with the Internal Revenue Service (IRS), and did not investigate  our complaint any further. WHD management told us that their  investigators do not have access to IRS databases, and WHD does not have  the legal authority to obtain information about a business from IRS  without the owner’s consent. WHD would be able to check employer- provided information against IRS records if the business owner signed an  IRS consent form, however, WHD managers told us that they were  unaware of this form and that investigators in the field do not use it. To  hear selected audio clips of undercover calls illustrating poor customer  service to our fictitious callers, refer to  http://www.gao.gov/media/video/gao-09-458t/.
Although all of our fictitious complaints alleged violations of laws that  WHD enforces, 5 of our 10 complaints were not recorded in WHD’s  database. These complaints were filed with four different field offices and  included three complaints in which WHD performed no investigative work  and two complaints in which WHD failed to record the investigative work  performed. According to WHD policies, investigators should enter  reasonable complaints into WHD’s database and either handle them  immediately as conciliations or refer them to management for possible  investigation. However, several of our undercover complaints were not  recorded in the database, even after the employee had spoken to an  investigator or filed a written complaint. In one of these cases, WHD failed  to investigate a child labor complaint alleging that underage children were  operating hazardous machinery and working during school hours, and did  not record the complaint in its database. The number of complaints that  are not entered into WHD’s database is unknown, but this problem is  potentially significant.
section_title: Case Studies Show That WHD Inadequately Investigated Complaints
paragraphs: Similar to our 10 fictitious scenarios, in our testimony we identified 20  cases affecting at least 1,160 workers whose employers were inadequately  investigated by WHD. We performed data mining on WHD’s database to  identify 20 inadequate cases closed during fiscal year 2007. For several of  these cases, WHD (1) did not respond to a complainant for over a year, (2)  did not verify information provided by the employer, (3) did not fully  investigate businesses with repeat violations, and (4) dropped cases  because the employer did not return telephone calls. Five of the cases we  investigated were closed based on unverified information provided by the  employer. In each case, the information could have been verified by a  search of public records, such as bankruptcy records, but the case files  contain no evidence that the investigators attempted to perform these  searches. WHD officials told us that investigators rely on internet searches  to collect information about employers and generally do not have access  to other publicly available or subscription databases. Examples include:  In November 2005, WHD received a complaint alleging that a boarding  school in Montana was not paying its employees proper overtime. Over 9  months after the complaint was received, the case was assigned to an  investigator and conducted as an over the phone self-audit because,  according to the investigator, WHD did not have the resources to conduct  an on-site investigation. The employer agreed to pay over $200,000 in back  wages to 93 employees, but WHD was subsequently unable to make  contact with the business for over 5 months. In June 2007, one week  before the 2-year statute of limitations on the entire back wage amount  was to expire, the employer agreed to pay $1,000 of the $10,800 in wages  due for which the statute of limitations had not yet expired. The  investigator refused to accept the $1,000, and WHD recorded the back  wages computed as over $10,800 rather than $200,000, greatly understating  the true amount owed to employees. WHD determined that the firm had  begun paying overtime correctly based on statements made by the  employer but did not verify the statements through document review. No  further investigative action was taken and the complainant was informed  of the outcome of the case.
In another case, the complainant alleged that the company employed 15- year-old children, failed to pay its employees minimum wage, and did not  properly report income to IRS. The employer claimed that the company  did not meet the income requirement to be covered under federal labor  law but did not provide documentary evidence. When the employer failed  to return WHD’s telephone calls or attend a conference with the  investigator, WHD concluded the case.
section_title: WHD’s Complaint Intake Process, Conciliations, and Other Investigative Tools Do Not Provide Assurance of a Timely and Thorough Response to Wage Theft Complaints
paragraphs: WHD’s complaint intake processes, conciliations, and other investigative  tools are ineffective and often prevent WHD from responding to wage theft  complaints in a timely and thorough manner, leaving thousands of low  wage workers vulnerable to wage theft.
As discussed above, our undercover tests showed that some WHD staff  deterred callers from filing a complaint by encouraging employees to  resolve the issue themselves, directing most calls to voicemail, not  returning phone calls to both employees and employers, accepting only  written complaints at some offices, and providing conflicting or  misleading information about how to file a complaint. We also found that  WHD does not have a consistent process for documenting and tracking  complaints, resulting in situations where WHD investigators lose track of  the complaints they have received.
WHD’s conciliation process is ineffective because in many cases, if the  employer does not immediately agree to pay, WHD does not investigate  complaints further or compel payment. When an employer refuses to pay,  investigators may recommend that the case be elevated to a full  investigation, but several WHD District Directors and field staff told us  WHD lacks the resources to conduct an investigation of every complaint  and focuses resources on investigating complaints affecting large numbers  of employees or resulting in large dollar amounts of back wage  collections. WHD investigators are allowed to close conciliations when the  employer denies the allegations, and WHD policy does not require that  investigators review employer records in conciliations. In one case study,  the employee stated that he thought the business was going bankrupt. As a  result, WHD closed the case; however, we used a publicly available online  database, Public Access to Court Electronic Records, to determine that the  employer had never filed for bankruptcy. WHD management told us that  the agency does not provide training on how to use public document  searches and investigators do not have access to databases containing this  information. In addition, WHD’s poor record-keeping makes WHD appear  better at resolving conciliations than it actually is. For example, WHD’s  southeast region, which handled 57 percent of conciliations recorded by  WHD in fiscal year 2007, has a policy of not recording investigative work  performed on unsuccessful conciliations in the database. WHD staff told  us that if employers do not agree to pay back wages, cannot be located, or  do not answer the telephone, the conciliation work performed will not be  recorded in the database, making it appear as though these offices are  able to resolve nearly all conciliations successfully. Inflated conciliation  success rates are problematic for WHD management, which uses this  information to determine the effectiveness of WHD’s investigative efforts.  Without information on the outcomes of failed conciliations, WHD cannot  identify employers showing a pattern of violations.
Finally, we found WHD’s processes for handling investigations and other  non-conciliations were frequently ineffective because of significant delays.  For example, 5.2 percent of the investigations in our statistical sample  were not initiated until over 6 months after the complaint was received,  and 6.6 percent took more than one year to complete. See page 26 of  appendix I for more information on the methodology of our sample.  Timely completion of investigations by WHD is important because the  statute of limitations for recovery of wages under the FLSA is 2 years from  the date of the employer’s failure to pay the correct wages. FLSA, unlike  some other laws, does not permit the suspension of the statute of  limitations during a federal investigation. Specifically, this means that  every day that WHD delays an investigation, the complainant’s risk of  becoming ineligible to collect back wages increases. Labor has not sought  additional authority to suspend the statute of limitations during an  investigation, yet in several district offices, a large backlog prevents  investigators from initiating cases within 6 months. One office we visited  has a backlog of 7 to 8 months, while another office has a backlog of 13  months. Additionally, our analysis of WHD’s database shows that one  district office did not initiate an investigation of 12 percent of complaints  until over one year after the complaint was received, including a child  labor complaint affecting over 50 minors. Once complaints were recorded  in WHD’s database and assigned as a case to an investigator, they were  often adequately investigated. One example of a successful investigation  involved a complaint alleging that a firm was not paying proper overtime.  The case was assigned to an investigator the same day it was filed in April  2007. The WHD investigator reviewed payroll records to determine that  the firm owed the complainant back wages. The case was concluded  within 3 months when the investigator obtained a copy of the  complainant’s cashed check, proving that he had been paid his gross back  wages of $184.
In response to our testimony, the Secretary of Labor announced on March  25, 2009, that WHD would hire an additional 250 investigators to  “reinvigorate the work of this important agency, which has suffered a loss  of experienced personnel over the last several years.”
section_title: Conclusions
paragraphs: Our work clearly shows that Labor has left thousands of actual victims of  wage theft who sought federal government assistance with nowhere to  turn. Our work has shown that when WHD adequately investigates and  follows through on cases it is often successful. However, far too often  many of America’s most vulnerable workers find themselves dealing with  an agency concerned about resource limitations, with ineffective  processes, without certain tools necessary to perform effective  investigations, and unable to address all allegations of wage theft and  other labor law violations within the 2-year statute of limitations. While an  influx of new staff may help address some of these problems, without a  careful assessment of WHD’s workload and processes, unscrupulous  employers will continue taking advantage of our country’s low wage  workers.
section_title: Matter for Congressional Consideration
paragraphs: Our work documented several cases in which the employees’ right to file a  private lawsuit was constrained by WHD’s delays, resulting in hundreds of  thousands of dollars of identified wage theft going uncollected. Therefore,  Congress may wish to consider authorizing suspension of the statute of  limitations while an investigation by WHD is ongoing.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Labor direct the Administrator of  WHD to take the following five actions to improve processes for recording  and responding to wage theft complaints:    The Administrator should reassess current policies and processes and  revise them as appropriate to better ensure that relevant case information  is recorded in WHD’s database, including all complaints alleging  applicable labor law violations regardless of whether the complaint was  substantiated, and all investigative work performed on conciliations,  regardless of whether the conciliation was successfully resolved.
To provide assurance that WHD personnel interacting with complainants  and employers appropriately capture and investigate allegations of labor  law violations, and provide appropriate customer service, the  Administrator should conduct an assessment of WHD’s complaint intake  and resolution processes and revise them as appropriate.
To improve the efficiency and effectiveness of WHD personnel handling  wage theft complaints, the Administrator should explore providing more  automated research tools to WHD personnel that would allow them to  identify key information used in investigating complaints such as  bankruptcy filings, annual sales estimates for businesses, and information  on additional names and locations of businesses and individuals under  investigation.
To assist in the verification of information provided by employers under  investigation, the Administrator should explore gaining access to  information maintained by IRS and other agencies as needed through  voluntary consent from businesses being investigated.
To provide assurance that WHD has adequate human capital and resources  available to investigate wage theft complaints, the Administrator should  monitor the extent to which new investigators and existing staff are able  to handle the volume of wage theft complaints, and if inadequate, what  additional resources may be needed.
section_title: Agency Comments and Our Evaluation
paragraphs: We received written comments on a draft of this report from the Acting  Assistant Secretary for Employment Standards (see appendix II). Labor  concurred with our recommendations and provided additional clarifying  information. Labor noted that unlike investigations, conciliations do not  result in any determination of whether a violation occurred, but provide a  chance to assist more employees than WHD could otherwise assist  through more time-consuming investigations. Labor also stated that staff  balance a variety of factors, including office workload, when determining  whether to investigate a complaint, refer the employee to another  organization or advise the employee of the right to file a private lawsuit.
Labor provided additional representations on one of our undercover cases,  an anonymous complaint alleging that children were operating heavy  machinery and working during school hours in a meat packing plant.  Because WHD had no record of this call, we reported that WHD had not  investigated the complaint or recorded it in its database. In its written  response to this report, Labor stated that our child labor complaint was  reviewed by two WHD assistant district directors who determined that the  complaint was bogus because the business address was a mailbox store  and the company was not listed on several business websites. WHD did  not call the business directly. Because no supporting documentation was  provided for this representation, we could not confirm WHD’s account of  investigative steps taken.  See appendix II for more information. Labor  also provided us technical corrections to the report which we  incorporated, as appropriate. We have reprinted Labor’s written comments  in their entirety in appendix II.
As agreed with your office, unless you publicly release its contents earlier  we plan no further distribution of this report until 30 days from the date of  this letter. The report is available at no charge on the GAO Web site at  http://www.gao.gov. If you have any questions concerning this report,  please contact Gregory D. Kutz at (202) 512-6722 or kutzg@gao.gov.  Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this report. GAO staff who made  major contributions to this report are listed in appendix III.
section_title: Appendix I: Testimony on Flaws in Wage and Hour Division’s Complaint Intake and Investigative Processes
paragraphs: The missi of the Departmet of  Labor’s Wagand Hor Disi  (WHD) incldeforcing  rovisins of the Fair Labor  Sanrd Act, whch is designed to  ensure tht mllns of worker re  paid the federl minim wagand overtme. Ccting  inveigans based o worker  comain is WHD’s ory.  According to WHD, inveigansange from comrehensive  inveigans to coians,  whch consis of hoe  cll to  comainan’s emloer.
GAO found tht WHD freqtl respded inadequatel to comain,  leing low wage workererable to wage theft.  Posing asctus  comainan, GAO fled 10 commo comainth WHD distrct offce  cross the country. The undercover te reveled uggish respnse tme,   oor comaininke rocess, and failed coia ttem, mong other  rolems. Ie case,  WHD inveigator led abinveigave work  erformed and dot inveigate GAO’sctus comain. At the ed of  the undercover te, GAO was ll waiing for WHD to gin inveigaing  three cas— delay of rl , 4, and 2 moth, respectvely. The table  elow rovde ddnal exale of inadequate WHD respns to GAO’sctus comains.
subsections: section_title: Undercover Tests Reveal Inadequate Investigations and Poor Complaint Intake Process
paragraphs: The result of oundercover te llustrte fl in WHD’s respns to  wage theft comain, incling delays in inveigaing comain,  comain ot recorded in the WHD dabase, faire to usll aiable  eforcemet tool ecause of ck of rerce, faire to follow up  emloer who agreed to pay, an oor comaininke rocess. For  exale, WHD failed to inveigate  chld labor comainlleging thunderage chldre were oeringrdouschiner and workinging chool hos. I another case,  WHD inveigator led to oundercover inveigator abt corming the fctus businsss’ sale  volme wth the IternaRevenuServce (IRS), and dot inveigate  or comainanyrther. WHD successll inveigated 1 of or 10  fctusas, correctl deying aninveigaing  businss tht hd  mltiple comainled againsbyr fctus comainans. Fve of  or 10 comain were ot recorded in WHD’sabasand 2 of 10 were  recorded as successll paid whe inct the fctus comainan  reorted to WHD theot ee pai. To heelected auo clips of  theundercover cll, o to http://www.ga.gov/media/vdeo/gao-09-48t/.  Table 1 rovde  summ of the 10 comain tht we fled or  ttemted to fle wth WHD.
Employee did not receive  last paycheck.
WHD did not return phone calls and failed to record our  complaint in their database.
WHD failed to return seven messages from our  fictitious employee attempting to file a complaint.
In two cases during regular business hours, calls  were routed to a voicemail message stating that the  office was closed.
Complaint was never recorded in the database.
Employee did not receive  overtime for an average of  4 hours per week for 19  weeks.
The WHD office’s large backlog prevented it from  investigating our case in a timely manner.
Investigator told our fictitious employee that it  would take “8 to 10 months” to begin investigating  his complaint.
WHD failed to return four calls over 4 consecutive  months from our fictitious employee attempting to  determine the status of his complaint.
Complaint was never recorded in the database.
Employee was not paid  minimum wage.
WHD failed to record initial complaint and never  returned calls from our fictitious employer.
WHD investigator accepted the complaint but did  not attempt to contact our fictitious employer to  initiate a conciliation.
Between September 24, 2008 and January 12,  2009, WHD failed to return four calls from our  fictitious employee attempting to determine the  status of his complaint.
When the fictitious employee reached the same  investigator, she had no record of his initial call and  suggested the employee look for another job before  filing a complaint against his employer.
Investigator finally accepted the complaint and left  a message for the fictitious employer, but did not  return his two subsequent calls.
Complaint was never recorded in the database.
Employee did not receive  last paycheck.
WHD inaccurately recorded that our fictitious employee  received back wages.
Our fictitious employer told the WHD investigator  he would pay, but failed to fax proof of payment to  WHD as requested. WHD investigator never  followed up to confirm payment and closed the  case as “agreed to pay.”
After 3 weeks, our fictitious employee called back  and reported that he hadn’t been paid. The WHD  investigator contacted our fictitious employer and,  when asked, stated “there is no penalty” for failure  to pay.
After our fictitious employer refused to pay, WHD  informed our fictitious employee of his right to take  private action.
Complaint was still recorded as “agreed to pay” in  WHD’s database despite WHD’s knowledge that  the fictitious employer had failed to pay the back  wages.
Employee was not paid  minimum wage.
Investigator lied to our fictitious employee about  investigative work performed and did not investigate the  complaint.
Investigator told the fictitious employee that WHD  had no jurisdiction because the gross revenues of  the fictitious employer did not meet the minimum  standard for coverage, even though the fictitious  employee stated that his boss had told him the  company’s gross revenues were three times  greater than the minimum standard.
Investigator claimed that he had obtained  information on the fictitious employer’s revenue  from an IRS database.
However, our fictitious employer had never filed  taxes, WHD officials told us they do not have  access to IRS databases, and the case file shows  that no contact was made with the IRS.
We referred information related to this case to  Labor’s Office of the Inspector General for further  investigation.
subsections: section_title: 10 Receptionist
paragraphs: Employee was not paid  minimum wage.
WHD readily accepted our fictitious employer’s refusal  to pay and stated they could not assist the fictitious  employee further.
WHD investigator accepted this complaint and  promptly called our fictitious employer.
Our fictitious employer agreed that she had failed  to pay the minimum wage but refused to pay back  wages due.
WHD investigator accepted the refusal without  question and informed our fictitious employee of his  right to file a lawsuit.
When our fictitious employee asked why WHD  could not offer more help, the WHD investigator  said she was “bound by the laws I’m able to  enforce, the money the Congress gives us” and  told our fictitious employee to contact his  Congressman to request more resources for WHD.
We deed numerous rolemth the WHD respnse to oundercover wage theft comains. Ke reas where WHD failed to tke  approiate ct inclde delays in inveigaing comain, comain  ot recorded in the WHD dabase, faire to usaiable eforcemet  tool, faire to follow up emloer who agreed to pay, an oor  comaininke rocess.
Delay Invetigating Complaint. WHD took more than  moth to  gin inveigaingve of or fctus comain, incling three tht  were ever inveigated. Ie case, the fctus comainanspoke to  an inveigator who saihe wold coct the emloer. Ding the t  4 moth, the comainant left for messag asing abt the us of  isas. Whe he reched the inveigator, he hd tke ct the  comaint, dot recll spingth hand hot etered the  comainin the WHD dabas. and chld labor re  to or, bu revew of WHD record t the eof or work howed tht the case was ot inveigated or etered into  WHD’sabas. I another case, an inveigator spoke to the fctus  emloer, who refused to pay the comainant the back wag. The  inveigator cloed the coiathot etering the casinform  or otcome into WHD’sabas. This is consistet wth the WHD  Stheast reginaol of ot recording the inveigave work  erformed o unsuccessl coians. The effect of ot recording  unsuccessl coians is to mke the coia successte for the  reginal offce appetter than ctuall is. The nuer of comain  thre ot etered into WHD’sabasis unow, but this rolem is  oteiall signiansince t of or 10 gus comain were ot  recorded in the dabas.
Failure to Ue All Enforcement Tool. According to WHD ff, WHD  lck the rerce to usll eforcemet tool in coians where the  emloer refus to pay. According to WHD ol, whe an emloer  refus to pay, the inveigator may recommed to WHD managemet tht  the case elevted to ll inveigan. However, oe of or three  fctus emloer who refused to payas ced under inveigan. Ie case, or fctus emloer refused to pay and the inveigator  cceted this refusal wthot q, informing the comainant tht he  cold fle  te lsuit to recover the $262 de to h. Whe the  comainanasked wh WHD coldn’rovde hm more assisance, the  inveigator reed, “I’ve doe wht I can do, I’ve asked her to pay   anhe can’t…I can’t wring lood from  toe,” and the suggted the  comainant coct his Cngressan to ask for more rerce for WHD  to do ther work. According to WHD ol anintervewth ff, WHD  doesn’t hve the rerce to coct an inveiga of ever comainanrefer to inveigate comain ffectingnuer of  emloee or resulting ine dollmoun of back wags. Oe distrct  drector told us tht coians result from “aiske” the part of the  emloer and he doe ot lke his inveigator spingme o them.  However, whe WHD cannot oain back wag in  coia and  decde ot to pusuan inveiga, the emloee’s recois to  fle te ligan. Low wage workeray unable to fford  ttory’s fee or may unlling to gue ther owasin ll clai  cort, leing them wth o other ons to oain theback wags. inveigator told the emloer he was required to subroof of  paymet, but oe of the inveigator followed up whe the emloer  failed to rovde the required roof. The comainanin oth caster  cocted the inveigator to reort he hot ee pai. The inveigator  ttemted to otiate wth oth fctus emloer, but dot upte  the case etr in WHD’sabase to inte tht the comainanever  receved back wag, ming appas thougoth cas were  successll reolved. Thee two casast doubt o whether  comainan whoe coians re mrked “agreed to pay” in the WHD  dabasctuall receved theback wags. businss. Or comainanin thisase told the inveigator tht his  emloer hsale of $1.5ll in 2007, but the inveigator claimed  tht he hd oained inform abt the businss from an IRSabashowing tht the fctus businssot meet the ross revenue  threhold for coveragunder federl l. Or fctus businssot  fled tax retns and WHD offia told us tht theinveigator do ot  hve ccess to IRSabass. A revew of the case fle how thinform from the IRSas revewed by the inveigator. Iform  relted to thisase was referred to Labor’s Offce of the Inspector Geerl  for frther inveigan.
WHD successll inveigated  businss tht hd mltiple comainled againsbyr fctus comainans. WHD deed two pate  coiansnging against the same fctus businss, oth originaing  from comainled byr fctus comainans. Thee coians  were combined into an inveiga, the correct rocedre for handling  comain ffectingltiple emloees. The inveigator coinued the  inveiga fter the fctus emloer claimed tht the businssd  fled for bankruptc anttemted to visit the businss whe the  emloer topped retning hoe clls. The inveigator dot uspubc record to ver tht the emloer hd fled for bankruptc, but  otherwise mde reasnable effort to locte aninveigate the businss.
section_title: Case Studies Show That WHD Inadequately Investigated Complaints
paragraphs: rotectns of the Fair Labor Sanrd Act app to emloeengaged in interte  commerce or in the rodct of ood for interte commerce. The ct app to  ll emloee of anterise tht has t least $in annuasale or businss and has  emloeengaged in interte commerce or in the rodct of ood for interte  commerce, or tht has emloeeandling, elling, or otherwise working ood or  mteria tht hve ee moved in or rodced for interte commerce by any ern. 29  U.S.C. §. Eve thouganterise mayve pate locns, is considered   single eterise for the $00,000 coverage determina f relted ct re erformed  througunied oer or commo cotrol by any er or erns for  commo  businss pu. reted in appix II. Table 2 rovde  summ of 10 cas  cloed by WHD etwee Octoer 1, 2006 anStemer 31, 2007.
Type of alleged  violation(s)
Minimum Wage and  Overtime (FLSA)
Two former employees alleged that the firm  was not paying minimum wage and overtime to  employees.
One WHD investigator visited establishment  and took surveillance photographs but did not  speak with the employer.
Almost 2 months later, another WHD  investigator visited the establishment and  found that the employer had vacated the  premises. A realty broker informed WHD that  he believed the employer had closed, not  relocated, causing WHD to close the case.
Using public data, we confirmed that the  employer was still active as of January 2009  and made contact with an employee of the firm  who told us that the employer had moved from  the location WHD visited.
Overtime (FLSA)
Fort Lauderdale, FL   Complainant alleged he was due over $525 in  overtime back wages, but commented to WHD  that he thought his employer was filing for  bankruptcy.
WHD dropped the case stating that the  employer declared bankruptcy.
The employee was informed of his right to file  a private lawsuit to recover back wages.
WHD received a fax from this employer after  the case had been concluded stating that the  employee had been paid $245 in per diem,  however the documentation did not support  that the overtime back wages were paid; no  further investigative action was taken.
Bankruptcy court records show that the  employer had not filed for bankruptcy and we  confirmed that the employer was still in  business in December 2008. (FLSA)
Employee alleged she was owed minimum  wage for 145 hours of work.
Employer stated that wages were due by the  previous owner, but did provide proof to  substantiate or return subsequent telephone  calls.
WHD dropped the case and advised the  employee of her right to file private litigation.
subsections: section_title: Case
paragraphs: Type of alleged  violation(s)
Minimum Wage  (FLSA)
WHD attempted to contact the employer two  times over a period of 2 days to discuss  allegations.
Case was dropped when no one from the  employer, which was a Sheriff’s office,  returned WHD’s telephone calls.
WHD informed the complainant that private  litigation could be filed in order to recover back  wages.
Minimum Wage and  Overtime(FLSA)
Employer denied knowing employee and  stated that the employee worked for a  subcontractor, but refused to provide name of  the company.
WHD closed the case, recorded that the  employer was in compliance with labor laws,  and informed the individual who filed the  complaint on behalf of the employee of his  right to file a civil lawsuit.
Employee filed a civil suit, during which the  employer agreed he owed back wages.
The court ruled that the employee was due  $1,500, the same amount cited in the original  complaint to WHD.
Construction/ Anonymous  Child Labor/ Minimum  Wage (FLSA)
The complainant alleged that the company  employed 15 year old children, failed to pay its  employees minimum wage, and did not  properly report income to the Internal Revenue  Service.
The employer alleged that the company did not  meet the income requirement to be covered  under federal labor law, but did not provide  documentary evidence.
The employer failed to return WHD’s telephone  calls or attend the site of the initial conference.
WHD concluded this case with no further  investigative action.
section_title: Case
paragraphs: Type of alleged  violation(s)
Minimum Wage and  Overtime (FLSA)
WHD attempted to set up a meeting with the  company, but it was postponed so the owner  could go deer hunting. Subsequent calls from  WHD were not answered.
Almost 8 months later, WHD conducted an  announced site visit and closed the case, citing  that the employer appeared to be out of  business because no employees were on site  during the visit and phone calls were  unanswered.
Public records show that the employer later  signed and submitted an annual statement 2  months after the case was closed and we  successfully contacted the employer in  November 2008, who confirmed they were  located at the same address visited by WHD.
Boarding School / Teen  Counselor  (FLSA)
Investigator assigned to case over 9 months  after complaint was received.
Complaint handled as a self audit, allowing the  employer to review its own records for the  alleged violations.
WHD determined that the employer had begun  paying correct overtime based on the  employer’s verbal statements; no updated  records were reviewed.
The employer found that it owed over  $200,000 to 93 employees, but delayed until  the statute of limitations had almost expired  before offering to pay a total of only $1,000 in  back wages.
WHD did not accept this amount, closed the  case, and informed the complainant of the  outcome.
section_title: Case
paragraphs: Type of alleged  violation(s)
Overtime (FLSA)
Employer refused to comply with the law  throughout WHD’s investigation and took  months to produce payroll records.
WHD determined that over $66,000 in back  wages was due to 21 employees and stated in  the case file that this estimate was “probably  low.”
The employer generally agreed with WHD’s  findings and agreed to pay back wages, but  then later refused to respond to WHD or  change payroll practices.
Over one year after the employer’s agreement  to pay, WHD decided not to pursue litigation in  part, because the case was considered  “significantly old.”
Employees were notified of their right to file  private litigation in order to recover back  wages.
Child Labor/Minimum  Wage/Overtime  (FLSA)
Case assigned to an investigator over 22  months after the complaint was received.
WHD determined that the restaurant and  related enterprises owed approximately  $230,000 to 438 employees for minimum wage  and overtime violations, and for depositing a  percentage of employee tips into a business  account.
Employer agreed to pay back wages for  minimum wage and overtime violations, but did  not agree to pay back the collected tips.
WHD did not accept partial back wage offer  and closed the case with no collection of back  wages. tht he dot eleve the frm hd relocted. A  result, WHD cloed the  inveigan. Using pubcl aiable inform, we found tht the  businssas ctve as of Januaand locted ffereddress  approxitel 3 mle ay from  old locn. We cocted the  fctor anspoke wth an emloee, who told us tht the businssd  moved from the ddress WHD visited.
CasS: I J 2007, WHD receved  comaint from  former  correctns offcer who lleed th coun Sherff’s offce dot pay  $766 ininim wag. The WHD inveigator assigned to work o thisase mde two cll to the Sherff’s offce over  erod of 2 days. Two  days fter the ecod cll, WHD dropped thisasecauso oe from  the emloer hd reted the clls. WHD dot mke ddnal effort  to coct the emloer or vte the llegans. WHD informed the  comainant thte liga cold e fled in order to recover back  wags. We successll cocted the Sherff’s offce in Novemer 2008.
CasS 5: I May 2007,  -roft communi worker ceter  cocted WHD o ehlf of ayaborer lleging tht his emloer owed  hm $1,00 for the revus three pay erods. WHD cocted the  emloer, who ted tht the comainant was ctuall an emloee of   subcotrctor, but refused to rovde the name of the subcotrctor. WHD  cloed the case wthot verying the emloer’s teme aninformed  the communi worker ceter of the emloee’sight to fle te  ligan. WHD’sase fle inte tho volns were founand the  emloer was in comiance wth appable labor ls. According to the  Eecve Drector of the worker ceter, approxitel 2 weekter,  WHD cocted hand claimed tht the emloer in the comaint hagreed to pay the back wags. Whe the emloer dot pay, the  comainansued the emloer in ll clai cort. Ding the coe of  the lsuit the emloer dmtted tht he owed the emloee back wags.  The cort rled tht the emloer owed the emloee $1,00 for unpaid  wag, the same mounin the original comaint to WHD. llow the emloer under inveiga to coct ther ow revew of  record and clcte the back wage to emloees. overtme back wag for ho worked etwee Stemer 2004 and June  2005. WHD determined tht the frm gan paying overtme correctl in  June 2006 based o temede by the emloer, but dot ver  the teme through docmet revew. After the emloer’s ttor  iniiall inted tht the wold agree to pay the over $200,000 in back  wag, WHD was unable to mke coct wth the businss for over   moths. WHD record inte tht the inveigator eleved tht the frm  was trying to fin loo hole to vopaying back wags. I June 2007,  oe week efore the 2-te of lns the ere back wagmount was to expire, the emloer agreed to pay $1,000 ot of the  $10,800 tht hot et expired. The inveigator refused to ccet the  $1,000 saying tht wold hve ee “ke ettling the cas.” WHD  recorded the back wag computed as over $10,800 rther than $200,000,  retl undering the trmount owed to emloees. WHD oted in  the case fle tht the frm refused to pay the more than $10,800 in back  wag, but dot recommeassssing nalt ecause the felt the  frm was ot  ret offeder and there were o chld labor volns. No  frther inveigave ctaske and the comainant was informed  of the otcome of the cas.
CasS: I June 2003 and erl, WHD receved comain  against two reauan owed by the same eteris. Oe comainlleed tht emloee were working “off the clock” anerver were  ing forced to give 2. ercet of ther tips to the emloer. The other  comainlleed off the clock work, llegal dedctns, and minim  wage volns. Thisase was ot assigned to an inveigator unl May, over 22 moth fter the 2003 comaint was receved. The WHD  inveigator assigned to thisasted tht the delay in the casassignmet was ecause of  backlo t the Nashvlle Distrct Offce tht  has since ee reolved. WHD cocted ll inveiga and found  tht 438 emloee were dapproxitel $230,000 in back wag for  minim wagand overtme volns and the required tip ool.  Although tip ool re ot llegal, WHD determined tht the emloer’sip  ool was llegaecause the company desited the mo into   businss ccoun. Frther, the frm volted chld labor l by llowing inor under 16  old to work more than 3 ho chool days. The  emloer disagreed tht the tip ool was llegaanted th revus  WHD inveigator hd told hm tht was cceable. The emloer  agreed to pay back wage for the minim wagand overtme  volns, buot the wag tht were collected for the tip ool. WHD  informed the emloer thpartiaback wag wold ot cceted and  thisase was cloed.
Iformddnal casan e founin appix II.
section_title: WHD’s Complaint Intake Process, Conciliations, and Other Investigative Tools Do Not Provide Assurance of a Timely and Thorough Response to Wage Theft Complaints
paragraphs: WHD’s comaininke rocess, coians, and other inveigave  tool re ineffectve and ofte revet WHD from resping to wage theft  comain in mel and thorough manner, leing thousan of low  wage workererable to wage theft. Specll, we found tht WHD  ofteai to record comain in abasan oor comaint- inke rocess oteialliscoag emloee from fing comains.  For exale,  of or 10 undercover wage theft comain subtted to  WHD were ever recorded in the dabase, incling  comainlleging  thunderage chldre were oeringrdouschinering chool  hos. WHD’s coia rocess is ineffectve ecausinanyas, f  the emloer doe ot mmediatel agree to pay, WHD doe ot  inveigate comainrther or comel payme. I dd, WHD’s  oor record-keepingke WHD appetter t reolving coians  than ctuall is. For exale, WHD’s theast regi, whch handled ercet of coians recorded by the ag inisr 2007, has   ol of ot recording unsuccessl coians in the WHD dabas.  Finall, we found WHD’s rocess for handling inveigans and other  -coians were freqtl ineffectve ecause of signiant delays.  Oce comain were recorded in WHD’sabasanassigned as ase  to an inveigator, the were ofte dequatel inveigated.
subsections: section_title: WHD’s Complaint-Intake Process Is Ineffective
paragraphs: comainan ttemt to fle  comainbure discoaged by WHD’s  comaininke rocess and eveuall give up.
Rgarding WHD’s record-keepingaire, we found tht WHD doe ot  hve  consisterocess for docmeing and trcking comains. Thisas resulted in siuans where WHD inveigator loe trck of the  comain theve receved. According to WHD ol, inveigator  hold eter comain into WHD’sabasand ether handle them  mmediatel as coians or refer them to managemet for ssible  inveigan. However, everl of oundercover comain were ot  recorded in the dabase, eve fter the emloee hspoke to an  inveigator or fled  wrtte comain. This is partrl troubing in  the case of or chld labor comaint, ecaust rais the ssibi tht  WHD is ot recording or inveigaing comain cocerning the well- ing ansafet of the mot verable emloees. Emloeeay  eleve tht WHD is inveigaing ther case, whe inct the inform  the rovded over the hoe or eve in wringas ever recorded. Since  there is o record of thee cas in WHD’sabase, is ssible to  kow how many comain re reorted buever inveigated.
section_title: WHD’s Conciliation Process Is Ineffective
paragraphs: According to everl WHD Distrct Drector, in coians where the  emloer refus to pay, ther offceck the rerce to inveigate  frther or comel paymet, cotribuing to the faire we deed inundercover te, cas, anissale. Whe an  emloer refus to pay, inveigatoray recommed tht the case  elevted to ll inveiga, bueverl WHD Distrct Drector and  feld ff told us WHD lck the rerce to coct an inveiga of  ever comainand focus rerce inveigaing comain  ffectingnuer of emloee or resulting ine dollmoun  of back wage collectns. Ccting ll inveiga llow WHD to  de other volns or other ffected emloee, ttemt to otiate  back wagpaymet wth the emloer and, f the emloer coinu to  refuse, refer the case to the Soltor’s Offce for ligan. However, in  ome coians, the emloer is able to vopaying back wag  si by refusing. Whle WHD inform comainan of ther right to fle suiagainst ther emloer to recover back wag, is unkel tht  mot low wage workerve the means to hre an ttor, leing them  wth lttle recoe to oain theback wags. comainis assigned to an inveigator, ant least oe offce llow  inveigator 10 days to reolve coians, whch may ot llow  tme for ddnal follow-up work to erformed. WHD ff ine feld  offce told us the re lted to three unanswered telehoe cll to the  emloer efore the re required to dro the casandvise the  comainant of hisight to fle suit to recover back wags. Sff in  everl feld offce told us tht the re ot ermtted to mke site visi  to emloer for coians. WHD inveigator re llowed to dro  coians whe the emloer deni the llegans and WHD ol  doe ot require thinveigator revew emloer record in  coians. Ie cas, the emloee ted tht he thought the  businssas ing bankrup. WHD dropped the casing tht the  emloer declred bankruptc aninformed the emloee of hisight to  fle  te lsuit to recover back wags. Bankruptc cort record  how tht the emloer hot fled for bankruptc, and we cormed  tht the emloer was ll in businss in Decemer 2008. Oe WHD  inveigator told us this ot ecessa to ver bankruptc record  ecause coians re dropped whe the emloer refus to pay,  regardless of the reas for the refusa.
Oundercover te anintervewth feld ff deed erus  record-keeping fl in whch mke WHD appetter t reolving  coians than ctuall is. For exale, WHD’s theast regi,  whch handled ercet of coians recorded by WHD inisr  2007, has  ol of ot recording inveigave work erformed o  unsuccessl coians in the dabas. WHD ff told us thf  emloer do ot agree to pay back wag, cannot e locted, or do ot  answer the telehoe, the coia work erformed wll ot e  recorded in the dabas, ming appas though thee offce re  able to reolve rl ll coians successlly. Iflted coia  successte re rolemc for WHD managemet, whch us this  inform to determine the effectvess of WHD’s inveigave efforts. ome offceth this ol, the comaint tht the coiaas based o wold  e recorded in WHD’sabas. However, the comaint wold appas thougt hever ee inveigated, ecause the inveigave work and the otcome of the  coia wold ot e recorded in the dabas. Other offce do ot eter the  comaininto the dabas. iniiall agree to pay in  coia but reis romise, WHD  inveigatorot change the otcome of the cloed casin WHISARD  to how tht the emloee dot receve back wags. Whle ome  inveigatorait for roof of paymeefore closing the coia,  other told us tht the cloe coians as oo as the emloer agree  to pay. Eve f the emloee lter tell the inveigator tht he has ot  ee paid, inveigator told us the do ot change the otcome of   cloed casin the WHD dabas. WHD pubcl reort the totback  wag collected and the nuer of emloee receing back wag, but  theis re overted ecausan unow nuer of  coians recorded as successll reolved in the WHD dabase dot ctuall result in the comainant receing the back wag.
Theoor record-keeping ctce rere signiant l of  the pu we used to elect oissale ecause the  nuer of coians ctuall erformed by WHD cannot e determined  and coians recorded as successll reolved may ot hve resulted  in back wag for the emloees. A  result, the erceage of inadequate  coians iskeligher than the faire rte eted insale.  We found th5.erce of coians insale were  inadequatel coiated ecause WHD failed to ver the emloer’s  claim tho vol occrred, cloed the casfter the emloer dot ret hoe cll, or cloed the casfter the emloer refused to  pay back wags. However, we found tht many of the coians  recorded in WHD’sabase were dequatel inveigated. Oe exale of   successl coia involved  comainlleging thrm was ot  payinginim wag. The comaint was assigned to an inveigator the  same day t wasled in Stemer 2007. The WHD inveigator cocted  the ower, who dmtted the vol anagreed to pay back wag of  $1,. The case was coclded the same day whe the inveigator  oained  copy of the comainan’s check from the emloer anspoke  to the comainant, corming tht he was able to cash the check and hd  receved his back wags. robabi rocedre based oandom electns, osale ise of nuer of sale tht we might hve drn. Since ech sale cold  hve rovded dfferet ete, we expressr codece in the recisi of opartsale’s result as  ercet codece intervl (e.g., us or minus   erceagin). This is the intervl tht wold coain the ctuapue for  9 ercet of the sale we cold hve drn. The 9 ercet codece intervsurrouningsale of inadequate inveigansang from 206 to 1,19aire in  the pun.
section_title: WHD’s Investigation and Other Non-conciliation Processes Were Often Ineffective, but Complaints Investigated Quickly Were Usually Resolved Successfully
paragraphs: We found WHD’s rocess for handling inveigans and other - coiansas freqtl ineffectve ecause of signiant delays.  However, oce comain were recorded in WHD’sabasanassigned  as ase to an inveigator, the were ofte successll inveigated.  Almot 19 erce of -coians insale were inadequatel  inveigated, inclingas tht were ot iniiated unl more than 6  moth fter the comaint was receved, cas cloed fter an emloer  refused to pay, and cas tht took over or to comlete. I dd,  eveasailed two of or tes.
Reason why non-conciliation was inadequate  Cases not initiated within 6 months of complaint  Case closed due to employer’s refusal to pay   Cases with violations found that were not referred to Labor’s  Office of the Solicitor for litigation  Cases taking more than one year to complete  Cases where WHD failed to review employer records  Six of the cas insale failed ecause the were ot iniiated unl  over 6 moth fter the comaint was receved. According to WHD  offia, -coians hold iniiated wthin 6 moth of the dte  the comainisled. Tmel comlet of inveigans by WHD is  ortanecause the te of lns for recover of wag under  the FLSA is from the dte of the emloer’saire to pay the   robabi rocedre based oandom electns, osale ise of nuer of sale tht we might hve drn. Since ech sale cold  hve rovded dfferet ete, we expressr codece in the recisi of opartsale’s result as  ercet codece intervl (e.g., us or minus   erceagin). This is the intervl tht wold coain the ctuapue for  9 ercet of the sale we cold hve drn. The 9 ercet codece intervsurrouningsale of inadequate inveigansang from 2, to ,827 faire in  the pun. correct wags. Specll, this means tht everay tht WHD delays an  inveiga, the comainan’sisk of ecoming ineligible to collect back  wag increass. Ie of osale cas, WHD  letter to   comainant 6 moth fter his overtme comaint wasled ing tht,  ecause of  backlo, cteekeis ehlf. The letter  reqted tht the comainaninform WHD wthinbusinssays of  whether he inteded to tke te ctn. The case fle how in tht the comainant respded to WHD. Oe moth lter,  WHD assigned the comaint to an inveigator ant the comainananother letter ing thf he dot respd wthinssays, the  case wold e cloed. WHD cloed the case o the same day the letter was  .
Or casisussed above anin appix II inclde exale  of comain ot inveigated for over  r, cas cloed based o  unvered inform rovded by the emloer, businssth ret  volns tht were ot fll inveigated, and cas dropped ecause the  emloer dot ret telehoe clls. For exale, ine cas,  WHD found tht 21 emloee were dt least $66,000 in back wag for  overtme volns. Throughot the inveiga, the emloer was  uncooerve and resisted roving payroll record to WHD. At the ed  of the inveiga, the frm agreed wth WHD’sinings anromised to  pay back wag, but the topped resping to WHD. The emloee  were ever paiback wag and over  r lter, the Soltor’s Offce  decded ot to pusue liga or any other ct in part ecause the  case was considered “signiantl old.”
The te of lns for recover of wag under FLSA and the Dis Bco Act is from the emloer’saire to pay the correct wags. 29 U.S.C. §55. For wllfl  volns, in whch the emloer kew  ctns were llegal or cted reckless in  determining the lega of  ctns, the te of lns iss. Federl cortve eforced the te of lns eve f Labor is inveigaing  comain.  Shandelman v. Schuman, 92 F. Supp. 334 (E.D.Pa.0). unl over ofter the comaint was receved, incling  chld  abor comainffecting over 0 minors. Because the e of lns  to collect back wag under FLSA is, WHD is ing comainan  t risk of collecting  frct of the back wag the wold hve  ee able to collect t the tme of the comain. WHD o failed to  comel record and other inform from emloers. Whle WHD  Rginal Administrtor re legall able to issusubpoenas, WHD has ot  eteded this abi to inuainveigator, who therefore ded o  emloer to rovde record and other docme voluny. Ias where pubc record re aiable to ver emloer teme,  WHD inveigator do ot hve certain tool tht wold fte ccess to  thee docmes. For exale, we used  pubcl-aiable oine  dabase, Pubc Access to Crt ElectroniRecord (PACER), to  determine than emloer who claimed to hve fled for bankruptcot ctuall do. However, there is o evdece in the case fle tht the  WHD inveigator erformed this check. WHD offia told us th  inveigator do ot receve training how to uspubc docmerche and do ot hve ccess to dabas coaining this inform  such as PACER.
We found tht, oce comain were recorded in WHD’sabasanassigned as ase to an inveigator in melanner, the were ofte  successll inveigated. Aisussed above, WHD doe ot record ll  comain in abasand discoag emloee from fing  comain, ome of whch may signiant labor volns suiable for  inveigan. I dd, manyas re delayed moth efore WHD  iniiate an inveigan. However, osale deed manyas tht  were dequatel inveigated oce the were assigned to an inveigator.  Specll, 81.ercet of the -coians insale were  dequatel inveigated. Oe exale of  successinveiga  involved  comainlleging thrm was ot paying roer overtme  was assigned to an inveigator the same day t wasled in Al 2007. The  WHD inveigator revewed payroll record to determine tht the frm  owed the comainanback wags. The case was coclded wthin 3  moth whe the inveigator oained  copy of the comainan’sashed  check, roving tht he hee paid his ross back wag of $184.
section_title: Conclusions
paragraphs: workerind themelve deingth an ag cocered abt rerce  ns, wth ineffectve rocess, and wthot certain tool ecessa  to erform tmel and effectve inveigans of wage theft comains.  Ufortunatel, fr too ofte the result is unscrupulous emloering  dvanage of or country’s low wage workers.
Mr. Cairman and Memer of the Commttee, this cocldeteme. We wold leased to answer anyns th or other  memer of the commttee mayve t thisme.
section_title: Contacts and Acknowledgments
paragraphs: For frther inform abt this temony, lease coct Greor D.  Ktz t (202) 12-6722 or ktz@ga.gov or Jonathan Meer t (214) 777- 766 or meer@ga.gov. Iuaing ke cotribuns to this  temony inclded Er Ael, Christoher Bckle, Carl Brde,  Sfee Cagie, Ranll Cole, Merto Hll, Jennifer Hffman, Bba  Lewis, Jeffer McDermott, Adrew McItoh, Sandr Moore, Adrew  O’Cnnell, Gloria Pro, Rert Roder, Ramo Rodriguez, Si  Schwrtz, K Self, and Daniel Silva. Cct in for or Offce of  CngressinaRelns and Pubc Affaiay e found o the laspage  of this temony.
section_title: Appendix I: Scope and Methodology
paragraphs: To revew the effectvess of WHD’s comaininke and coia  rocess, GAO inveigator ttemted to fle 11 comain abt 10  fctus businss to WHD distrct offce in Bltmore, Man;  Brmingm, Alabaa; Dllas, Texas; Mia, Flora; San Joe, Cafornia;  and WeCovina, Cafornia. Thee feld offceandle 13 ercet of ll  cas inveigated by WHD. The comain we fled wth WHD inclded  minim wage, laspaycheck, overtme, and chld labor volns. GAO  inveigatorained undercover ddress anhonuer to as oth comainan and emloer in thecenas.
A part of or overll assssmet of the effectvess of inveigans  cocted by WHD, we oained ananazed WHD’s Wagand Hor  Iveigave Support anRorting Dabase (WHISARD), whch  coained 32,323 cas coclded etwee Octoer 1, 2006 anStemer  30, 2007. We anazed WHD’s WHISARD dabasand determined t was  sufftl reliable for pu of oauaninveigave work. We  anazed andom robabi sale of 11 coians and 11 - coians to cotribute to or overll assssmet of whether WHD’s  rocess for inveigaing comain re effectve. Because we followed   robabi rocedre based oandom electns, osale re oe of nuer of sale tht we might hve drn. Since ech  sale cold hve rovded dfferet ete, we expressr  codece in the recisi of the partsale’s result as   ercet codece intervl (e.g., us or minus  erceagin). This  is the intervl tht wold coain the ctuapue for 9  ercet of the sale we cold hve drn.
To determine whether an inveigaas inadequate, we revewed case  fle and cormed detai of elected casth the inveigator or  techniian assigned to the cas. Isale te, coians were  determined to inadequate f WHD dot successll iniiate  inveigave work wthin 3 moth or dot comlete inveigave work  wthin 6 moths. No-coians were determined to inadequate f  WHD dot successll iniiate inveigave work wthin 6 moth, dot comlete inveigave work wthinr or dot refer cas in  whch the emloer refused to pay to Labor’s Offce of the Soltor.  Both  coians an-coians were determined to inadequate f  WHD dot coct the emloer, dot correctl determine coveragunder federl lw, dot revew emloer record, or dot compute  anassss back wag whe approiate. coctinglk-throug of inveigave rocessth managemeanintervewing WHD offias. We gathered inform abt distrct  offce ol aninual cas by cocting site visi t the Mia  and Tpa, Floristrct offce, and cocting telehointervewth techniians, inveigator and distrct drector in 23 feld offce and  hedquarter offia in Wasingto, D.C. We spoke wth Labor’s  Offce of the Soltor in Dllas, Texas and Wasingto, D.C. To decro-level d WHD comain, we anazed d for cas cloed  etwee Octoer 1, 2006 anStemer 30, 2007 by regi, distrct offce  and case otcome.
To deas of inadequate WHD respns to comain, we  d-mined WHISARD to de cloed cas in whch  signiant delay  occrred in resping to  comaint (casing more than 6 moth  to iniiate or 1 r to comlete), an emloer cold ot e locted, or the  case was dropped whe an emloer refused to pay. We oained ananazed WHD case fle, intervewed WHD offia, and revewed  pubcl aiable d from oine dabas and the Departmet of  Treasuy’s FinaniaCme Eforcemet Network to gather ddnainform abt thee cass. We intervewed comainan who  cocted GAO drectl or were referred to us byabor dvoc roups to  gather inform abt WHD’s inveiga of ther comains.
section_title: Appendix II: Additional Case Studies of Inadequate WHD Investigations
paragraphs: Table  rovde  summ of te ddnal cas of inadequate  Wagand Hor Disi (WHD) inveigans. Thee cas inclde  insance where WHD dropped cas fter (1) emloer refused to  cooerte wth an inveiga, (2) WHD deed ol but failed  to force emloer to pay emloee ther owed wag, and (3) an  emloer lleed t was bankrupt whe inct the emloer was ot.
Minimum Wage  (FLSA)
Complainant alleged he was not paid minimum  wage.
WHD attempted to contact the employer to  substantiate the claim, but the employer did not  return WHD’s calls.
Case was closed and the employee was  informed of his right to file private litigation.
We were able to make contact with the  employer in February 2009.
Minimum Wage  (FLSA)
Employer would not make a commitment to  WHD to pay $937 in back wages.
WHD closed the case and recorded that the  employer was in compliance with labor laws.
Minimum Wage  (FLSA)
Employer admitted owing wages but refused to  pay because the employee had been involved  in a vehicular accident in a company vehicle.
WHD requested that employer comply with  labor laws in the future, but employer refused.
The WHD investigator stated that the case was  closed and the employee was informed of his  right to file a private lawsuit.
Failure to Overtime  (FLSA)
Employer admitted to WHD that employees  were not paid overtime and he did not know  how much they were paid per hour.
One employee told the investigator that the  employees had been threatened and another  source informed the investigator that the  employer had threatened employees with a  machete so they would lie during WHD  interviews, but the investigator still determined  that the employer’s violations did not appear to  ase was rected inveiga into the businss based o ip receved from   comettor, ot the comaint of  single worker.
subsections: section_title: GAO’s Mission
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section_title: To Report Fraud, Waste, and Abuse in Federal Programs
section_title: Congressional Relations
section_title: Public Affairs
section_title: Appendix II: Comments from the Department of Labor
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to the contacts named above, individuals making key  In addition to the contacts named above, individuals making key  contributions to this report included Erika Axelson, Christopher Backley,  contributions to this report included Erika Axelson, Christopher Backley,  Carl Barden, Shafee Carnegie, Randall Cole, Merton Hill, Jennifer  Carl Barden, Shafee Carnegie, Randall Cole, Merton Hill, Jennifer  Huffman, Barbara Lewis, Jeffery McDermott, Andrew McIntosh, Sandra  Huffman, Barbara Lewis, Jeffery McDermott, Andrew McIntosh, Sandra  Moore, Andrew O’Connell, Gloria Proa, Robert Rodgers, Ramon  Moore, Andrew O’Connell, Gloria Proa, Robert Rodgers, Ramon  Rodriguez, Sidney Schwartz, Kira Self, and Daniel Silva.  Rodriguez, Sidney Schwartz, Kira Self, and Daniel Silva.