Since FLSA was enacted, Congress has amended it several times, including recently increasing the federal minimum wage from $5.15 an hour, which it has been since September 1997, to $7.25 an hour in three steps over a 2- year period ending in July 2009. In 2007, about 2 million workers were earning at or below the federal minimum wage. FLSA also limits the normal work week to 40 hours and requires that most employers pay 1½ times normal wages, or overtime pay, to eligible employees who work longer hours. Furthermore, FLSA and its regulations limit the types of jobs, number of hours, times of day, and types of equipment that youth can work. WHD’s headquarters office, 5 regional offices, and 74 district and field offices with approximately 730 investigative staff are responsible for enforcing employer compliance with labor laws. In 2007, WHD’s budget was approximately $165 million. WHD conducts several types of enforcement actions, ranging from comprehensive investigations covering all laws under the agency’s jurisdiction to conciliations, a quick remediation process generally limited to a single alleged FLSA violation—such as a missed paycheck for a single worker, in which a WHD investigator contacts the employer by phone to try to resolve a complaint received from a worker. WHD also initiates enforcement actions in an effort to target employers likely to violate FLSA. For many years, WHD officials have considered low wage workers to be most vulnerable to FLSA violations. In 2007, about 54 million workers were among this population. Furthermore, WHD officials, researchers, and employee advocates have expressed concerns that foreign born workers, although generally protected by FLSA to the same extent as other workers, may be less likely than others to complain because they may be unaware of federal laws or fear deportation if they are undocumented. About 19 percent of low wage workers, as defined by researchers in studies commissioned by WHD, were foreign born in 2007. When WHD finds violations during enforcement actions, it computes and attempts to collect back wages owed to workers and, where permitted by law, imposes penalties and other remedies. Other remedies pertaining to FLSA include the hot goods provision, which allows WHD to seize goods created in violation of FLSA, and liquidated damages, which permit workers to receive additional damages as a result of minimum wage or overtime violations. If employers refuse to pay the back wages and/or penalties assessed, WHD officials, with the assistance of attorneys from Labor’s Office of the Solicitor, may pursue the cases in the courts. WHD’s partnerships are formal written agreements with external groups— including states, foreign consulates, and employee and employer associations—designed to improve compliance. Its outreach activities include informational materials and seminars for employers and workers designed to improve public awareness of the provisions of FLSA. WHD holds seminars, provides training to employer associations, and distributes materials on FLSA provisions to employers and workers. In addition, as part of its outreach activities, WHD provides technical assistance to employers through its local offices, national hotline, and Web site. WHD, like other federal agencies, is required by the Government Performance and Results Act of 1993 (GPRA) to establish a framework to help align its activities with the agency’s mission and goals. It is also required to develop long-term goals as well as establish performance measures to use in assessing the success of its efforts. Furthermore, to promote agency accountability, it is required to issue annual performance reports on its progress in meeting these goals. From 1997 to 2007, the number of WHD’s enforcement actions decreased by more than a third, from approximately 47,000 actions in 1997 to just under 30,000 in 2007. According to WHD, although enforcement actions have comprised the majority of its compliance activities, the total number of actions decreased over this period because of three factors: the increased use of more time-consuming comprehensive investigations, a decrease in the number of investigators, and improved screening of complaints to eliminate those that may not result in violations. Most of these enforcement actions conducted from 1997 to 20007 were initiated by complaints from workers. The remaining enforcement actions, which were initiated by WHD, decreased 45 percent over the period, from approximately 13,000 in 1997 to approximately 7,000 in 2007. WHD’s partnerships and outreach activities constituted about 19 percent of its total staff time. From 1997 to 2007, the total number of FLSA enforcement actions WHD conducted decreased, and lengthy, comprehensive investigations made up an increasingly larger share of this total. Of WHD’s total resources, the majority was spent ensuring compliance with FLSA, which covers more workers than the other laws under WHD’s jurisdiction. Based on available data from 2000 to 2007, the majority of staff time spent on FLSA compliance activities—81 percent—was spent on enforcement. However, the total number of enforcement actions, including investigations and conciliations, declined from approximately 47,000 in 1997 to just under 30,000 in 2007, as shown in figure 1. In addition, WHD attributed the decrease in the number of enforcement actions to three factors. First, the proportion of comprehensive investigations, which require more staff time than other types of enforcement actions, increased over this period—from 39 percent of all enforcement actions in 2000 to 51 percent in 2007. Agency officials said that WHD emphasized comprehensive investigations in an effort to increase future compliance because they provide an opportunity for WHD to educate employers about the laws under its jurisdiction. Second, officials cited the decrease in the agency’s investigative staff—and the loss of experienced investigators in particular—as reasons for this trend. As shown in figure 2, the number of investigators decreased over this period by more than 20 percent, from 942 in 1997 to 732 in 2007. Finally, a senior WHD official told us that the agency now screens out complaints that are not likely to result in FLSA violations more effectively than it did previously. The majority (72 percent) of WHD’s enforcement actions were initiated in response to complaints from workers. From 2000 to 2007, more than half of these enforcement actions—approximately 52 percent—were conciliations, which WHD conducted over the phone. Conciliations were also the quickest type of enforcement action—taking 2½ hours, on average, compared to nearly 35 hours, on average, for other types of enforcement actions. However, conciliations are generally limited to a complaint about a single violation involving only one worker. Although this enforcement action allows initial complaints to be quickly closed, a WHD-commissioned study found conciliations to be associated with an increased probability of detecting violations in subsequent investigations of a specific employer. Further information on complaints handled via conciliations can be found in a companion GAO testimony being released today for this hearing. Nearly all of the remaining enforcement actions initiated by complaints from workers were comprehensive investigations (38 percent) or limited investigations (7 percent). See figure 3 for the types of enforcement actions WHD conducted in response to complaints from 2000 through 2007. From 1997 to 2007, the number of WHD-initiated enforcement actions declined by 45 percent, as shown in figure 4. As a proportion of all enforcement actions, those initiated by WHD decreased slightly over the period, from 28 percent of all actions in 1997 to 24 percent in 2007. From 2000 to 2007, in planning and conducting WHD-initiated enforcement actions, the agency primarily targeted four industry groups: agriculture, accommodation and food services, manufacturing, and health care and social services. These four industries generally coincide with those for which WHD had strategic initiatives for increasing compliance for several years: agriculture, restaurants, garment manufacturing, and health care. The agency conducted the largest proportion of WHD-initiated enforcement actions—22 percent—in the accommodation and food services industry. However, at the same time, WHD increased its focus on the agriculture industry from 7 percent of WHD-initiated enforcement actions in 2000 to 20 percent in 2007. The majority of enforcement actions in the agriculture industry—82 percent—were initiated by WHD, while actions in all other industries were usually initiated as a result of complaints. The number of enforcement actions and the proportion of WHD-initiated enforcement actions varied among WHD’s five regions. For example, WHD’s Southeastern region conducted the largest number of enforcement actions—approximately 128,000 from 1997 to 2007. In contrast, the Western region conducted the fewest—approximately 44,000. In addition, because the Western region had a smaller workload of enforcement actions initiated by complaints, nearly half of its enforcement actions conducted from 1997 to 2007 were initiated by WHD, compared to only 14 percent for the Southeastern region. Agency officials said that when states have no minimum wage or overtime standards, or weak enforcement of such laws, WHD regions in which those states are located have heavier complaint workloads. Across WHD’s five regions, regions with a greater proportion of states with a minimum wage below the federal level also had a greater proportion of enforcement actions that were initiated by complaints. In the majority of its enforcement actions—approximately 75 percent from 2000 to 2007—WHD found employers in violation of FLSA, and most of these violations were of the overtime provisions of FLSA. In 2007, for example, nearly 85 percent of the FLSA violations WHD found were related to overtime, while 14 percent were minimum wage violations, and 2 percent were violations of FLSA’s child labor provisions. When violations were found, employers agreed to pay some amount of the back wages owed to their workers approximately 90 percent of the time. In addition, the total amount of back wages employers agreed to pay increased by 41 percent, from approximately $164 million in 2000 to about $230 million in 2007—the highest amount for this period. Furthermore, the average amount of back wages per enforcement action nearly doubled, increasing from approximately $5,400 per enforcement action in 2000 to $10,500 in 2007.