GAO: Labor Department Bungled Wage Complaints

Undercover investigation says agency regularly bungles handling of complaints from workers on overtime pay violations or other labor violations.

WASHINGTON (AP) -- The Labor Department regularly bungles its handling of complaints from workers who say their bosses are cheating them on overtime pay or committing other labor violations, an undercover investigation found.

The probe by the Government Accountability Office says agency officials often took too long to respond to complaints, failed to record them and, in one instance, lied about investigative work that was never performed.

"This investigation shows that the Department of Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn," GAO investigator Gregory Kutz said in prepared testimony, a copy of which was obtained by The Associated Press.

The House Education and Labor Committee plans to hold a hearing on the investigation Wednesday.

To test the agency's intake process, GAO investigators posed as workers or companies on 10 occasions. Kutz said the agency mishandled nine out of 10 of the fake complaints.

In one of the complaints, a meat packer reported children using heavy machinery at a California company. But four months later, officials had not begun to investigate and never even recorded the complaint in a database, as required.

Another case involved a caller, supposedly a convenience store clerk, who left seven telephone messages to complain about not receiving a paycheck. The Wage and Hour Division staff never returned the calls and never recorded the complaint.

Half the complaints were never even recorded in a database, as required, and two of the 10 were marked as successfully paid even though the fictitious workers reported they had not been paid, Kutz said.

The investigation -- conducted from July through this month -- follows up on a similar study last year that found the Labor Department ill-equipped to respond to worker complaints about labor violations.

The latest probe found major flaws in the way the agency takes in and processes complaints. The Wage and Hour Division is charged with enforcing federal wage, hour, child labor and family medical leave laws.

Democrats blame the Bush administration for using shoddy enforcement practices and reducing funding and staffing levels of the Wage and Hour division. Republicans have called the investigations an attempt to score political points and believe more focus should be placed on staff mismanagement.

Hilda Solis, the new labor secretary, has pledged to step up enforcement at the agency.

"I am committed to ensuring that every worker is paid at least the minimum wage, that those who work overtime are properly compensated, that child labor laws are strictly enforced, and that every worker is provided a safe and healthful environment," Solis said.

Solis said the Wage and Hour Division has already begun the process of adding 150 new investigators to its field offices to bolster enforcement. Another 100 investigators will come on to make sure contractors funded by President Barack Obama's economic stimulus plan are in compliance with the law.

Those additions are expected to help an agency that lost experienced personnel over the past few years.

Renaye Manley, organizing director for workers' rights group Interfaith Worker Justice, called the latest report shocking and said its findings are the result of a department that is "grossly underfunded and ill-equipped."

One of the most egregious cases involved a fictitious lawn mower who complained that his company did not pay him the minimum wage. He was told the Wage and Hour Division could not intervene because the gross revenues of the employer were not high enough. The agency investigator claimed he looked up the records on an IRS database, even though the company was fictitious and had no such records.

The GAO referred that case to the Labor Department's Office of Inspector General for further investigation.

In one of the few bright spots, the investigation found that once complaints were recorded in the agency's database and assigned to a case investigator were dealt with appropriately.

Separately, GAO investigators identified 20 cases affecting at least 1,160 real employees where the agency failed to properly investigate. In some of those, it took the agency more than a year to respond to complaints.

Overall, the GAO reported lapses including slow response times, failure to record complaints in a database, failure to use all available enforcement tools because of a lack of resources and failure to follow up with employers.

More in Labor