	FLSA Lawsuits Have Increased Substantially over the Last Decade and Most FLSA Lawsuits Filed in Fiscal Year 2012 Alleged Overtime Pay Violations

		FLSA Lawsuits Increased Substantially Over the Last Decade, and Most Were Filed in a Few States

Over the past two decades—from 1991 through 2012—there was a  substantial increase in the number of FLSA lawsuits filed, with most of the  increase occurring in the period from fiscal year 2001 through 2012. Federal courts in most states experienced increases in the number of  FLSA lawsuits filed between 1991 and 2012, but large increases were  concentrated in a few states, including Florida, New York, and Alabama. FLSA Lawsuits Filed in 2012 Were Concentrated in a Few Industries and Most Alleged Overtime Violations

In fiscal year 2012, an estimated 97 percent of FLSA lawsuits were filed  against private sector employers, and an estimated 57 percent of FLSA  lawsuits were filed against employers in four industry areas:  accommodations and food services; manufacturing; construction; and  “other services”, which includes services such as laundry services,  domestic work, and nail salons. WHD Uses a Data- based Approach to Target Its FLSA Enforcement Efforts but Does Not Analyze Data on Requests for Assistance to Improve Its Guidance

We also reviewed DOL’s annual process for determining how to target its  enforcement and compliance assistance resources. The agency targets  industries for enforcement that, according to its recent enforcement data,  have a higher likelihood of FLSA violations, along with other factors. However, DOL does not compile and analyze relevant data, such as  information on the subjects or the number of requests for assistance it  receives from employers and workers, to help determine what additional  or revised guidance employers may need to help them comply with the   In developing its guidance on the FLSA, WHD does not use a  FLSA.systematic approach that includes analyzing this type of data. In addition,  WHD does not have a routine, data-based process for assessing the  adequacy of its guidance. For example, WHD does not analyze trends in  the types of FLSA-related questions it receives. Because of these issues, we recommended that WHD develop a  systematic approach for identifying areas of confusion about the  requirements of the FLSA that contribute to possible violations and  improving the guidance it provides to employers and workers in those  areas. A clearer  picture of the needs of employers and workers would allow WHD to more  efficiently design and target its compliance assistance efforts, which may,  in turn, result in fewer FLSA violations. WHD agreed with our recommendation that the agency develop a  systematic approach for identifying and considering areas of confusion  that contribute to possible FLSA violations to help inform the development  and assessment of its guidance. WHD stated that it is in the process of  developing systems to further analyze trends in communications received  from stakeholders such as workers and employers and will include  findings from this analysis as part of its process for developing new or  revised guidance. It is also difficult to  determine the effect that the increase in FLSA lawsuits has had on  employers and their ability to hire workers.
Why GAO Did This Study

The FLSA sets federal minimum wage and overtime pay requirements applicable to millions of U.S. workers and allows workers to sue employers for violating these requirements. Questions have been raised about the effect of FLSA lawsuits on employers and workers and about WHD's enforcement and compliance assistance efforts as the number of lawsuits has increased.
This statement examines what is known about the number of FLSA lawsuits filed and how WHD plans its FLSA enforcement and compliance assistance efforts. It is based on the results of a previous GAO report issued in December 2013. In conducting the earlier work, GAO analyzed federal district court data from fiscal years 1991 to 2012 and reviewed selected documents from a representative sample of lawsuits filed in federal district court in fiscal year 2012. GAO also reviewed DOL's planning and performance documents, interviewed DOL officials, as well as stakeholders, including federal judges, plaintiff and defense attorneys who specialize in FLSA cases, officials from organizations representing workers and employers, and academics.

What GAO Found

Substantial increases occurred over the last decade in the number of civil lawsuits filed in federal district court alleging violations of the Fair Labor Standards Act of 1938, as amended (FLSA). Federal courts in most states experienced increases in the number of FLSA lawsuits filed, but large increases were concentrated in a few states, including Florida and New York. Many factors may contribute to this general trend; however, the factor cited most often by stakeholders GAO interviewed—including attorneys and judges—was attorneys' increased willingness to take on such cases. In fiscal year 2012, an estimated 97 percent of FLSA lawsuits were filed against private sector employers, often from the accommodations and food services industry, and 95 percent of the lawsuits filed included allegations of overtime violations.
The Department of Labor's Wage and Hour Division (WHD) has an annual process for planning how it will target its enforcement and compliance assistance resources to help prevent and identify potential FLSA violations. In planning its enforcement efforts, WHD targets industries that, according to its recent enforcement data, have a higher likelihood of FLSA violations. WHD, however, does not have a systematic approach that includes analyzing relevant data, such as the number of requests for assistance it receives from employers and workers, to develop its guidance, as recommended by best practices previously identified by GAO. In addition, WHD does not have a routine, data-based process for assessing the adequacy of its guidance. For example, WHD does not analyze trends in the types of FLSA-related questions it receives from employers or workers. According to plaintiff and defense attorneys GAO interviewed, more FLSA guidance from WHD would be helpful, such as guidance on how to determine whether certain types of workers are exempt from the overtime pay and other requirements of the FLSA.

What GAO Recommends

In its December 2013 report, GAO recommended that the Secretary of Labor direct the WHD Administrator to develop a systematic approach for identifying and considering areas of confusion that contribute to possible FLSA violations to help inform the development and assessment of its guidance. WHD agreed with the recommendation and described its plans to address it.