Your Employer Didn't Pay You?... Too Bad!

Submitted by SadInAmerica on Thu, 07/17/2008 - 10:30am.

Two new reports by the Government Accountability Office (GAO) show the U.S. Department of Labor’s Wage and Hour Division, especially under the Bush administration, is conducting fewer and less thorough investigations in allegations of employer wage theft.

Over the past decade, the number of investigations into employers’ refusal to pay minimum wage, overtime or even any wages at all, has dropped from 47,000 in 1997 to just 30,000 last year. And when investigations are launched, sometimes investigators drop their probes simply because an employer hangs up on them or asserts, without proof, they can’t afford to pay the workers what they are owed.

Yesterday, the U.S. House Education and Labor Committee heard some glaring examples of the Wage and Hour Division’s lax enforcement efforts that in most cases hurt low-wage workers the worst. Said committee Chairman Rep. George Miller (D-Calif.):

Wage theft affects everyone from poultry workers to construction workers, nursing home employees to retail workers, farm workers to landscapers… and in too many cases, investigators from the Wage and Hour Division simply drop the ball in pursing employers that cheat their employees out of their hard-earned wages.

Interfaith Worker Justice (IWJ) Executive Director Kim Bobo told the committee:

The number one problem addressed by these centers is wage theft….Millions of workers have wages stolen each and every year. Workers are confused by the laws and unsure which agencies can help them. Employers understand that the consequences of stealing wages are negligible. Wage stealers have no fear…the Wage and Hour Division is failing to protect workers from wage theft because of its woefully inadequate enforcement of the federal wage and hour laws.

IWJ is the largest faith-based network serving low-wage, and often immigrant, workers and operates 19 worker centers that are drop-in centers for workers who are having serious wage or health and safety issues at their workplaces.

In documenting the Wage and Hour Division’s inadequate investigations, the GAO found that a request by a pool maintenance worker to look into why he did not receive his last paycheck was dropped by the department even after the employer admitted the worker wasn’t paid. It seems the employer

berated the WHD [Wage and Hour Division] investigator and said the employee would not be paid. The case was dropped and the complainant was advised of his right to file a private lawsuit.

Testifying before the committee, Greg Kutz, GAO’s managing director of forensic audits and special investigations, described other examples of inadequate investigations.

A child labor complaint was closed because an employer could not be found. We easily identified this employer through a public records search and a telephone call. In another case, an employer admitted that wages were due, but told the investigator to call back later. After subsequent phone calls were not returned, the investigator closed the case. One case was assigned to an investigator 17 months after it was received. After the investigator held this case for six additional months, it was closed. And finally, one case was closed after an employer represented to an investigator that their revenue was below the $500,000 threshold where federal law applies. In a subsequent civil case, these representations were proven false, and the employer settled with these employees for an undisclosed amount.

The second GAO report looks into the decline in the number of wage theft investigations under the Bush administration, including reductions in Wage and Hour Division resources (such as staff), the department’s failure to assess civil penalties in 94 percent of back wage cases and its refusal to listen to input from outside sources, including unions, on strategies for improving enforcement of the nation’s wage and hour laws.

Anne-Marie Lasowski, GAO acting director of Education, Workforce and Income Security, told the committee the Wage and Hour Division has traditionally consulted with unions and other worker advocacy organization, but those meetings stopped when the Bush administration took office.

According to agency headquarters officials, prior to 2000, WHD held meetings at a national level with external organizations such as industry groups, advocates, unions, and state officials…but more recently, the agency has relied on second-hand information from its district offices to identify the concerns of these groups. GAO has reported that it is important to involve external stakeholders in the planning process, such as developing goals and performance measures. Agencies that have involved these external groups report that this cooperation has allowed them to more effectively use their resources.  

She also noted that the while the division has the authority to assess penalties in back wage cases,

the agency made limited uses of these penalties from 2000 to 2007. WHD assessed penalties for 6 percent of the enforcement actions conducted in this period in which it found [federal wage law] violations.

Bobo said that unscrupulous employers know it’s unlike they will face penalties and if they do, the amounts are so low they provide no deterrence.

If my organization doesn’t pay its taxes, I know that the IRS could take my house. I know that if I park in a no-parking zone, I will get a fine and have my car towed, an expensive proposition in Chicago. Meaningful consequences deter crime, including wage theft.

Said Miller:

We owe it to all hard working Americans to ensure that the federal government lives up to its responsibility to guarantee that families are not being cheated out of their wages by bad employers.

Click here for full testimony from all the witnesses and for an archived webcast of the hearing. 

Mike Hall - July 16, 2008 - source AFL-CIO Now Blog 

Tag this page!
Submitted by SadInAmerica on Thu, 07/17/2008 - 10:30am.