In 2008, the watchdog agency for Congress, the General Accountability Office, conducted a sting operation that yielded shocking results.
GAO auditors targeting the Labor Department created fictitious employees who filed complaints about wage theft – failure to pay overtime or the minimum wage — by their employers. It was a method used to test the department’s response to law-breaking, and in most cases months went by and dozens of phone calls went unanswered by the agency.
One case that startled members of Congress came out of California, where an undercover investigator called in an orchestrated complaint about several children working in a meatpacking plant during school hours. The GAO, knowing that dangerous child labor is the top priority for the department’s Wage and Hour Division, said the kids were operating meat grinders and circular saws.
Yet, the subsequent GAO audit found that the complaint was never investigated. It never even went into the agency’s complaint database.
The Labor Department at the time was run by Elaine Chao, wife of Senate Majority Leader Mitch McConnell. Chao headed Labor for the entire eight years of the George W. Bush presidency and now she has been tapped by President-elect Donald Trump to direct the Transportation Department.
Cop on the beat is former violator
More worrisome than Chao’s return, among labor law advocates, is Trump’s choice for Secretary of Labor: fast-food mogul Andy Puzder, the chief executive of CKE Restaurants, corporate parent to the Hardee’s and Carl’s Jr. burger chains. Puzder was picked to oversee the policing of wage theft though his company has repeatedly run afoul of labor law, including one case in which Hardee’s agreed to pay $58,000 in back wages to hundreds of workers.
Trump promised during his presidential campaign to fight for the working class and improve their economic standing in society.
That vow could face an early test when his administration tackles the enforcement of labor laws designed to ensure workers get the wages to which they’re entitled, including back-pay when unscrupulous business owners drag their feet.
The first sign of a change in attitude at Labor may be a decision by Puzder, if his Cabinet nomination is confirmed, whether to maintain the fast-food industry as a prime target.
According to The Huffington Post, Labor officials have prioritized enforcement in the hotel and fast-food industries, where wage theft is believed to be most common.
Worker shorted $13,000
In one recent case, a Labor Department investigation found that a Texas hotel had shorted a worker $13,000 in overtime pay. Those back-payments doubled the woman’s earnings over a 1-year period. In the last fiscal year, investigators found that more than $5.4 million was owed to 10,300 fast-food workers. They identified violations in more than eight out of every 10 cases handled.
During the 2016 fiscal year, the department ordered employers to pay more than $266 million in back wages to 283,000 affected workers. That nearly matched the previous high during the Obama administration when in 2012 enforcement brought in $281 million for 309,000 workers.
Those numbers stand in contrast to the devastating report issued by the GAO in 2009, which included the sting operation and a random review of numerous actual complaints. As the investigative arm of Congress, the GAO found a Wage and Hour Division overseen by Chao that was plagued by incompetence, sloth and a cavalier attitude. 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.
In a congressional hearing, lawmakers learned that auditors found 20 actual cases that were improperly handled, affecting more than 1,000 workers. In many of those cases, workers waited more than a year after filing their complaint before hearing back from a Labor investigator.
The HuffPo reports that the rank-and-file workers at the Wage and Hour Division express concern about what happens next under the new administration.
“I hope anyone who sits in my position, and anyone who sits in the secretary of labor’s position, would take very seriously the fundamental mission of this department and this agency,” said David Weil, outgoing head of Wage and Hour, the agency he was tapped to reform after teaching economics at Boston University. “That’s to protect the labor standards of working people according to what the law says. We’re a law enforcement agency, and the law is very clear that people should be paid for their work.”