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Wednesday, March 25, 2009

"Wage Theft"

The Labor Department is not giving workers adequate protection against "unscrupulous employers":

Labor Agency Is Failing Workers, Report Says, by Steven Greenhouse, NY Times: The federal agency charged with enforcing minimum wage, overtime and many other labor laws is failing in that role, leaving millions of workers vulnerable...

In a report scheduled to be released Wednesday, the Government Accountability Office found that ... the Labor Department’s Wage and Hour Division, had mishandled 9 of the 10 cases brought by a team of undercover agents posing as aggrieved workers.

In one case, the division failed to investigate a complaint that under-age children in Modesto, Calif., were working during school hours at a meatpacking plant with dangerous machinery...

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, the report said, an official told him it would take 8 to 10 months to begin investigating his case.

“This investigation clearly shows that Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn,” the report said. “Unfortunately, far too often the result is unscrupulous employers’ taking advantage of our country’s low-wage workers.”

The report pointed to a cavalier attitude by many Wage and Hour Division investigators... During the nine-month investigation, the report said, 5 of the 10 labor complaints that undercover agents filed were not recorded in the Wage and Hour Division’s database, and three were not investigated. In two cases, officials recorded that employers had paid back wages, even though they had not.

The accountability office also investigated hundreds of cases that it said the Wage and Hour Division had mishandled. ...

Secretary of Labor Hilda L. Solis said she took the report’s findings seriously. ... Ms. Solis said the Wage and Hour Division planned to increase its staff by a third by hiring 250 investigators — 100 of them as part of the federal stimulus package — “to refocus the agency on these enforcement responsibilities”...

Ms. Solis’s predecessor, Elaine L. Chao, often defended the Wage and Hour Division, saying it had concentrated on larger, tougher cases, and secured back wages for more than 300,000 workers a year and collected more than twice as much annually as the division had done in the final years of the Clinton administration.

The report concluded that the Wage and Hour Division had mishandled more serious cases 19 percent of the time. ...

I don't have the data to answer it, but the obvious question is whether this was any different before the Bush administration. However, the discussion about shifting enforcement to larger employers under Chao makes it appear that it was different, and Chao's defense makes it seem like taking on big versus small employers is an either-or choice, but it's not. If Republicans had wanted to increase the budget to allow effective enforcement of labor law on behalf of workers at both large and small employers, they could have. It's not like the Democrats would have opposed more effective minimum wage enforcement, or other such proposals. It was a matter of priorities, and this wasn't deemed important enough to draw additional budgetary resources from other purposes (if they thought about it much at all). Hopefully that will change, and the additional investigators that will be hired as well as the change in leadership and direction within the agency is a start to that process.

    Posted by on Wednesday, March 25, 2009 at 02:07 AM in Economics, Regulation | Permalink  TrackBack (0)  Comments (65)


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