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. 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. Case Studies Show That WHD Inadequately Investigated Complaints

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. 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. 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. WHD’s Complaint Intake Process, Conciliations, and Other Investigative Tools Do Not Provide Assurance of a Timely and Thorough Response to Wage Theft Complaints

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. 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. In addition, WHD’s poor record-keeping makes WHD appear  better at resolving conciliations than it actually is. 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. 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. Recommendations for Executive Action

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. Delay Invetigating Complaint. 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. However, in  ome coians, the emloer is able to vopaying back wag  si by refusing.
Why GAO Did This Study

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.

What GAO Found

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.