No Security for Employers in GAO's Report on DOL WHD Problems
As has been widely reported, a March 25, 2009 report by the U.S. Government Accountability Office (“GAO”) slammed the Wage and Hour Division (“WHD”) of the U.S. Department of Labor for inadequate response to and investigation of wage complaints. While the press coverage on this report has credited the GAO with suggesting that an employer only has 1 chance in 10 of being held accountable when an employee makes a legitimate wage complaint to the WHD, this interpretation is based on a cursory reading of the report – and this report does not tell anything like the whole story of the current state of wage and hour law enforcement in this country.
The “1 case in 10 handled correctly” story is based on a portion of the GAO’s investigation that involved a sting operation with exactly ten bogus cases, i.e., not a particularly large sample for analysis. Moreover, these 10 fictitious complaints were brought to WHD field offices in only 6 states – Alabama, California, Florida, Maryland, Texas and Virginia. The one complaint that the GAO felt the WHD handled properly was addressed by a California field office; in another California complaint the field office investigated as required and arranged for the “employer” to pay the “employee” back wages, but the GAO judged the case to be mishandled due to recording errors in the WHD database.
The rest of the GAO’s investigation consisted of a review of WHD files on 230 randomly-selected cases concluded between October 1, 2006 and September 30, 2007, 20 of which the GAO determined to have been inadequately investigated – thus, in this limited sample, 9 cases out of 10 apparently met the GAO’s standards. While the details of all the mishandled cases described in the report are shocking, it is hard to tell from the data the report provides how widespread poor WHD practices really were during the periods investigated.
There are also a couple of other important caveats to be considered: A shake-up of the WHD and the addition of 250 field investigators has already been announced by Labor Secretary Hilda Solis and the new administration has made it clear that it is serious about undertaking new workers’ rights initiatives. Also, many states, including New York, New Jersey, Connecticut and Pennsylvania, aggressively prosecute wage claims under their own wage and hour and wage payment laws. Finally, there has been a recent explosion in the number of private individual and class action lawsuits based on overtime and other wage claims. Employers certainly can’t rely on any perceived ineptness by the federal government to protect them from liability for their errors in compensating employees.
