Incompetence at Department of Labor's Wage & Hour Division

On Tuesday, March 24, 2009, the New York Times published a fascinating but disturbing article about overwhelming failures at the Department of Labor’s Wage & Hour Division (DOL-WHD). A report by the GAO detailing the results of undercover investigation is to be released on Wednesday.

Wage violations are rampant, and the GAO report suggests that they have been even more prevalent in the past several years. Disturbingly, DOL-WHD seems to be increasingly incapable of or reticent to deal with reports of them. Undercover agents posing as workers called the DOL-WHD to report various violations – forced off-the-clock work, unpaid overtime, child labor law violations – and then followed up to gauge how DOL-WHD responded.

While I look forward to reading the report itself when it is published tomorrow, here is a snippet of what the New York Times’ piece has to say: “When an undercover agent posing as a dishwasher called four times to complain about not being paid overtime for 19 weeks, the division’s office in Miami failed to return his calls for four months, and when it did, an official there told him it would take eight to 10 months to begin investigating his case….”

In addition to absurdly slow progress on investigations, the GAO report specifies that investigators failed to log inquiries in databases and often lied when they did. In other instances, they settled high-value claims for a hundredth of their worth, or simply closed files when employers did not respond to a phone call.

The bottom line is that the Wage & Hour division is woefully underfunded and understaffed. My gut reaction to this is, “well, thank god for employment lawyers picking up the slack” – and to an extent this is true, for the same reasons that I wrote about previously relative to the shortcomings of the Food & Drug Administration and the pharmaceutical industry.

However, plaintiff-side employment lawyers understandably look for a return on their often significant time investment on casework, and low wages typically translate into low attorneys fees. This does not diminish the egregiousness of such rampant wage violations. When someone is earning minimum wage, every dollar counts. What it does mean, lamentably, is that all too often, an employer stands a chance to get away with stealing a few hundred or even a few thousand dollars from some of its workers.

Which is why the DOL-WHD is a crucial complement to trial lawyer’s work on the maintenance of employment standards. Benign neglect and understaffing are not excuses. This arm of the federal government is an essential component to protecting the American citizenry, and it needs to be substantially better-staffed and better-funded.

One hopes that in the coming years we see a trifecta of greater enforcement, stiffer penalties, and tighter regulation.

The Times piece can be found here: http://www.nytimes.com/2009/03/25/washington/25wage.html?hp.