DOL Enforcement Questioned
A government study reports the Department of Labor is lax in enforcing overtime and minimum-wage complaints, although some observers say the DOL is merely focusing more on higher-profile cases to make a bigger impact. If the Democrats gain power this fall, enforcement practices will change dramatically, experts say.

By Scott Flander


Two recent reports by the Government Accountability Office, criticizing the Department of Labor for mishandling overtime and minimum-wage complaints, may be a warning of things to come, experts say.

If Democrats pick up seats in the House and Senate in elections this fall as widely expected -- and particularly if they take the White House as well -- the DOL's Wage and Hour Division will be expected to be more aggressive in investigating larger numbers of complaints, they say.

"What it shows for the future is that if there's a Democratic administration, you're going to see stepped-up enforcement against employers," says George Voegele, an employment attorney with Philadelphia-based Cozen O'Connor, who primarily represents employers.

The two GAO reports were issued July 15. One found that, from 1997 to 2007, the number of Wage and Hour Division enforcement actions decreased by more than one-third, from about 47,000 to 30,000. In addition, the department tended not to target low-wage industries, despite its own studies that say that's where violations are mostly likely to occur, the report said.

The second GAO report looked at 15 specific cases where complaints were mishandled. In one instance cited in the report, a truck driver complained he was not paid overtime, despite working 55 hours a week. The Wage and Hour Division waited 17 months to assign an investigator, who did almost no investigating for six months, and then dropped the case because the two-year statute of limitations was about to expire.

Another case concerned a gas-station cashier who said she did not receive her final paycheck. A co-owner of the gas station admitted the woman wasn't paid, and told the investigator to call back in a few days when the partner returned. The investigator did call back, but dropped the case after the partner didn't return several phone calls.

The GAO conducted the investigations at the request of House Education and Labor Committee Chairman George Miller, a California Democrat, who said the Wage and Hour Division "dropped the ball" in too many cases.

"The GAO investigation suggests that the problem of wage theft is only getting worse because of weaker enforcement," Miller said in a statement.

The Department of Labor defended its practices, saying "the Wage and Hour Division is delivering pay for workers, not a payday for trial lawyers."

Voegele noted that while the number of investigations declined, the government doubled the amount it collected in wage and hour violations. That reflects an effort by the government to go after higher-profile cases that will get more attention and do more good in the long run, he says.

Typically, says Voegele, under a Democratic administration, the Wage and Hour Division will go after a wider variety of employers, whereas in a Republican administration, the government will target a limited number of industries.

"It's a difference of philosophy, what the best allocation of resources is," he says.

Voegele says he believes the GAO "was primarily attacking the government's willingness to work out deals with employers the government is investigating."

"It seems to me," he says, "it should be a priority of the Wage and Hour Division to foster reasonable settlements, if for no other reason than to free up resources so there will be more investigations to help more workers over time."

Although critics say such settlements let employers off the hook, Voegele says that's not accurate.

Once employers have been investigated, they tend to change their practices. "They don't want to be repeat offenders," he says.

Larry Lorber, a partner and Washington-based employment lawyer with Proskauer Rose, says wider enforcement of wage and hour violations tends to run in cycles, and is generally not tied to any particular ideology.

But he does say that, if the Democrats pick up strength in the next elections, employers can expect to see much more aggressive wage-and-hour enforcement.

Lorber, an expert on workplace regulation who heads the U.S. Chamber of Commerce's EEO Committee, says procedural and other issues will probably cause a delay of a couple of years before a dramatic change in enforcement could be put into effect.

And Lorber says he believes the GAO's criticism of the Wage and Hour Division is unfair. The agency simply doesn't have the staff and resources to do the level of investigating that the GAO seems to expect, he says.

He says there's been a great deal of "private enforcement" by law firms that have won large class-action settlements. And the overall level of enforcement -- government and private combined -- has not declined, he says.




July 30, 2008

Copyright 2008© LRP Publications