    Worker Protection: Labor's Efforts to Enforce Protections for Day
    Laborers Could Benefit from Better Data and Guidance (26-SEP-02,
    GAO-02-925).

    Day laborers generally are individuals who work and get paid on a
    daily or short-term basis. To find work, they often congregate on
    street corners and wait for employers to drive by and offer them
    work. Day laborers may also be employed by temporary staffing
    agencies that assign them work on a daily basis with client
    employers. Day laborers have an informal relationship with the
    labor market, often working for different employers each day,
    being paid in cash, and lacking key benefits, such as health or
    unemployment insurance. However, day laborers may be eligible for
    wage and safety protections provided by the Fair Labor Standards
    Act (FLSA) and the Occupational Safety and Health (OSH) Act. The
    U.S. Department of Labor administers both acts. Its Wage and Hour
    Division (WHD) is responsible for ensuring that all covered
    workers receive at least the federal minimum hourly wage and
    overtime pay. The Occupational Safety and Health Administration
    (OSHA) is required to ensure that employers provide safe and
    healthy workplaces to help their workers avoid injury or death.
    Coverage under both laws does not depend on a worker's
    immigration status. Although limited, information on the nature
    and size of the day laborer workforce suggests that these workers
    may be prone to workplace abuses and are probably undercounted.
    Available information shows that day laborers are generally young
    Hispanic men with little education and significant language
    barriers, with some also being undocumented. The only nationally
    representative data on the day laborer population comes from
    Labor's Bureau of Labor Statistics, but these data may undercount
    day laborers. The unique characteristics of day laborers and
    their work affect Labor's ability to enforce the protections
    afforded them by federal law. First, neither WHD nor OSHA can get
    complete information about potential violations involving day
    laborers, making it difficult to target resources. Second, WHD's
    and OSHA's investigative procedures make it difficult to detect
    violations of worker protection laws involving day laborers, who
    often have nonstandard work arrangements. Finally, WHD officials
    are uncertain about the extent of coverage for day laborers in
    some cases, and the responsibilities of temporary staffing
    agencies under the OSH Act are unclear. Refer to GAO-02-1130 for
    a Spanish language version of this report.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-02-925
        ACCNO:   A05101
      TITLE:     Worker Protection: Labor's Efforts to Enforce Protections
    for Day Laborers Could Benefit from Better Data and Guidance
         DATE:   09/26/2002
      SUBJECT:   Labor force
    	     Labor law
    	     Labor supply
    	     Law enforcement
    	     Occupational safety
    	     Safety regulation
    	     Safety standards
    	     Temporary employment
    	     Working conditions

    Worker Protection: Labor's Efforts to Enforce Protections for Day
    Laborers Could Benefit from Better Data and Guidance (26-SEP-02,
    GAO-02-925).

    Day laborers generally are individuals who work and get paid on a
    daily or short-term basis. To find work, they often congregate on
    street corners and wait for employers to drive by and offer them
    work. Day laborers may also be employed by temporary staffing
    agencies that assign them work on a daily basis with client
    employers. Day laborers have an informal relationship with the
    labor market, often working for different employers each day,
    being paid in cash, and lacking key benefits, such as health or
    unemployment insurance. However, day laborers may be eligible for
    wage and safety protections provided by the Fair Labor Standards
    Act (FLSA) and the Occupational Safety and Health (OSH) Act. The
    U.S. Department of Labor administers both acts. Its Wage and Hour
    Division (WHD) is responsible for ensuring that all covered
    workers receive at least the federal minimum hourly wage and
    overtime pay. The Occupational Safety and Health Administration
    (OSHA) is required to ensure that employers provide safe and
    healthy workplaces to help their workers avoid injury or death.
    Coverage under both laws does not depend on a worker's
    immigration status. Although limited, information on the nature
    and size of the day laborer workforce suggests that these workers
    may be prone to workplace abuses and are probably undercounted.
    Available information shows that day laborers are generally young
    Hispanic men with little education and significant language
    barriers, with some portion also being undocumented. The only
    nationally representative data on the day laborer population
    comes from Labor's Bureau of Labor Statistics, but these data may
    undercount day laborers. The unique characteristics of day
    laborers and their work affect Labor's ability to enforce the
    protections afforded them by federal law. First, neither WHD nor
    OSHA can get complete information about potential violations
    involving day laborers, making it difficult to target resources.
    Second, WHD's and OSHA's investigative procedures make it
    difficult to detect violations of worker protection laws
    involving day laborers, who often have nonstandard work
    arrangements. Finally, WHD officials are uncertain about the
    extent of coverage for day laborers in some cases, and the
    responsibilities of temporary staffing agencies under the OSH Act
    are unclear.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-02-925
        ACCNO:   A05101
      TITLE:     Worker Protection: Labor's Efforts to Enforce Protections
    for Day Laborers Could Benefit from Better Data and Guidance
         DATE:   09/26/2002
      SUBJECT:   Labor supply
    	     Occupational safety
    	     Safety regulation
    	     Safety standards
    	     Temporary employment
    	     Working conditions
    	     Labor force
    	     Labor law
    	     Law enforcement

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    GAO-02-925

    Report to the Honorable Luis V. Gutierrez House of Representatives

    United States General Accounting Office

    GAO

    September 2002 WORKER PROTECTION

    Labor*s Efforts to Enforce Protections for Day Laborers Could Benefit from
    Better Data and Guidance

    GAO- 02- 925

    Why GAO Did This Study

    Day laborers are individuals who generally work for different employers
    and get paid on a daily basis. They may congregate on street corners and
    wait for employers to offer them work. Little is actually known about
    these workers or their working conditions. Congressional representatives,
    researchers, and advocacy groups have raised concerns that day laborers
    may be used for the most hazardous work but not paid appropriate wages or
    provided safe working conditions. Due to these concerns, GAO was asked to
    determine what is known about the day laborer workforce and identify the
    factors that affect Labor*s ability to enforce the protections afforded
    day laborers under certain labor laws.

    September 2002 WORKER PROTECTION Labor*s Efforts to Enforce Protections
    for Day Laborers Could Benefit from Better Data and Guidance

    This is a test for developing highlights for a GAO report. The full
    report, including GAO's objectives, scope, methodology, and analysis is
    available at www. gao. gov/ cgi- bin/ getrpt? GAO- 02- 925. For additional
    information about the report, contact Robert E. Robertson (202- 512-
    7215). To provide comments on this test highlights, contact Keith Fultz
    (202- 512- 3200) or e- mail HighlightsTest@ gao. gov.

    Highlights of GAO- 02- 925, a report to the Honorable Luis V. Gutierrez,
    House of Representatives

    What GAO Recommends

    GAO recommends that Labor obtain better information about the presence of
    day laborers or violations experienced by day laborers. GAO also
    recommends that Labor provide guidance to its local offices to ensure more
    consistent enforcement of protections for day laborers.

    The Department of Labor provided GAO with written comments on a draft of
    this report, emphasizing its commitment to protecting all workers,
    including day laborers. While Labor did not comment on all
    recommendations, it agreed with those it did comment on.

    United States General Accounting Office

    What GAO Found

    Although limited, existing information on the nature and size of the day
    laborer workforce suggests that these workers may be prone to workplace
    abuses and are probably undercounted. While individual sources may be
    limited in scope, taken together, they indicate that day laborers are
    generally young Hispanic men with limited educational skills and
    significant language barriers, with some portion being undocumented. These
    characteristics make workers vulnerable to various types of workplace
    dangers and abuses. The only nationally representative data on the day
    laborer population comes from Labor*s Bureau of Labor Statistics, which in
    2001 identified about 260,000 day laborers who wait on street corners for
    employment. However, these data may undercount day laborers. The
    methodology used to collect this information may affect Labor*s ability to
    reach people not having fixed addresses, a condition that may apply to day
    laborers.

    A number of factors relevant to day laborers and their work affect Labor*s
    ability to enforce the protections afforded them under laws that also
    cover many other workers. Labor has difficulty getting complete
    information about potential violations involving day laborers. Also,
    Labor*s investigative procedures are generally not designed for
    individuals in nonstandard work arrangements such as day laborers.
    Finally, Labor officials in local offices are uncertain about the extent
    of coverage for some day laborers and the responsibilities of some
    employers who employ day laborers.

    Day laborers at an employer*s truck. Source: Latin American Workers*
    Project, New York. G A O Accountability Integrity Reliability

    Highlights

    Page i GAO- 02- 925 Protections for Day Laborers Letter 1

    Results in Brief 2 Background 3 Available Data Suggest that Day Laborer
    Population Is Vulnerable

    and May Be Undercounted 10 Labor*s Efforts to Enforce Protections for Day
    Laborers Are

    Hampered by Limited Data, Traditional Procedures, and Difficulty in
    Determining Coverage 13 Conclusions 24 Recommendations for Executive
    Action 25 Agency Comments and Our Evaluation 26

    Appendix I Identification and Selection of Agencies Serving Day Laborers
    29

    Identifying Agencies Serving Day Laborers 29 Selecting Agencies Serving
    Day Laborers 30

    Appendix II Services Provided to Day Laborers by Selected Nonprofit
    Agencies 32

    Description of Nonprofit Agencies Visited 32

    Appendix III Selected Features of FLSA and Requirements in Four States 36

    Appendix IV Comments from the Employment Standards Administration 39

    GAO Comments 42

    Appendix V Comments from the Occupational Safety and Health Administration
    43

    GAO Comments 47

    Appendix VI GAO Contacts and Staff Acknowledgments 48 GAO Contacts 48
    Staff Acknowledgments 48 Contents

    Page ii GAO- 02- 925 Protections for Day Laborers Tables

    Table 1: Agencies Participating in Structured Interviews 31 Table 2:
    Description of Agencies GAO Visited and the Services

    They Provide 32

    Figures

    Figure 1: Day Laborers Waiting for Employment 4 Figure 2: Day Laborers at
    an Employer*s Truck 5 Figure 3: Shelter Construction at an Organized Day
    Labor Site 6 Figure 4: Day Laborers Signing up for Work 6 Figure 5: An
    Organized Day Labor Site 7

    Abbreviations

    BLS Bureau of Labor Statistics CHIRLA Coalition for Humane Immigration
    Rights of Los Angeles CPS Current Population Survey DLSA Day Labor
    Services Act FLSA Fair Labor Standards Act of 1938 OSHA Occupational
    Safety and Health Administration OSH Act Occupational Safety and Health
    Act of 1970 WHD Wage and Hour Division

    Page 1 GAO- 02- 925 Protections for Day Laborers

    September 26, 2002 The Honorable Luis V. Gutierrez House of
    Representatives

    Dear Mr. Gutierrez: *Day laborers* is a term that generally refers to
    individuals who work and get paid on a daily or short- term basis. To find
    work, day laborers often congregate on street corners and wait for
    employers to drive by and offer them work. The term also includes those
    who may be employed by temporary staffing agencies that assign them work
    on a daily basis with client employers. Day laborers have an informal
    relationship with the labor market, often working for different employers
    each day, being paid in cash, and lacking key benefits, such as health or
    unemployment insurance. However, day laborers, like many other workers in
    this country, may be eligible for wage and safety protections provided
    under two key federal laws: the Fair Labor Standards Act (FLSA) and the
    Occupational Safety and Health Act (OSH Act). The U. S. Department of
    Labor (Labor) administers both acts: the former through its Employment
    Standards Administration*s Wage and Hour Division (WHD), the latter
    through its Occupational Safety and Health Administration (OSHA). WHD is
    responsible for ensuring that all covered workers receive at least the
    federal minimum hourly wage and overtime pay. OSHA is required to ensure
    that employers provide safe and healthy workplaces for their workers to
    avoid injury or death. Coverage under both laws does not depend on a
    worker*s immigration status.

    Because of day laborers* informal relationship with the labor market,
    congressional representatives, researchers, and advocacy groups have
    raised concerns that day laborers may be used for the most hazardous work
    but not paid appropriate wages or provided safe working conditions.
    However, little is actually known about who these day laborers are, what
    their working conditions are, or the extent to which protections afforded
    under federal wage and safety and health laws are enforced. As a result,
    you asked us to determine what is known about the nature and size of the
    day laborer workforce and identify the key factors that affect Labor*s
    ability to enforce the protections afforded day laborers under FLSA and
    the OSH Act.

    To determine what is known about the size and nature of the day laborer
    workforce, we reviewed available data on day laborers, such as

    United States General Accounting Office Washington, DC 20548

    Page 2 GAO- 02- 925 Protections for Day Laborers

    information from Labor*s Bureau of Labor Statistics (BLS) on day laborers
    and available studies, and interviewed representatives of key national
    associations representing day laborers and employers who use them. We also
    conducted structured interviews with 25 nonprofit, local government, or
    temporary staffing agencies that work with or employ day laborers (see
    app. I for more details on how we selected these agencies). To identify
    the key factors that affect Labor*s ability to enforce the protections
    afforded day laborers under FLSA and the OSH Act, we reviewed provisions
    of FLSA and the OSH Act, implementing regulations and guidance; obtained
    and reviewed enforcement procedures; and analyzed enforcement statistics
    from WHD and OSHA. For both objectives, we interviewed federal WHD and
    OSHA officials in Washington, D. C., as well as state labor officials in
    four states* California, Illinois, New York, and Virginia. 1 During our
    state visits, we visited nonprofit and local government agencies that work
    with day laborers and interviewed day laborers at each site we visited. We
    also compared provisions of the wage laws and requirements of these states
    with FLSA (see app. III for this comparison). We performed our work
    between December 2001 and August 2002 in accordance with generally
    accepted government auditing standards.

    Although limited, existing information on the nature and size of the day
    laborer workforce suggests that these workers may be prone to workplace
    abuses and are probably undercounted. Available information shows that day
    laborers are generally young Hispanic men with limited educational skills
    and significant language barriers, with some portion also being
    undocumented. Research has shown that these characteristics are typical of
    workers willing to accept lower wages or work in substandard conditions.
    The only nationally representative data on the day laborer population
    comes from Labor*s BLS, but these data may undercount day laborers. For
    example, the methodology BLS uses to collect this information may affect
    BLS*s ability to reach respondents not having telephones or fixed
    addresses* conditions that may apply to day laborers. In 2001, BLS
    identified about 260,000 day laborers who wait on street corners for
    employment, yet one study of day laborers in California identified about
    20, 000 day laborers in one metropolitan area alone.

    1 We selected these states based on a variety of state- specific factors,
    including perceived high numbers of day laborers; use of day laborers at
    nationally important locations, such as the World Trade Center and the
    Pentagon sites; and local efforts to enforce existing laws. Results in
    Brief

    Page 3 GAO- 02- 925 Protections for Day Laborers

    A number of factors that are directly relevant to the unique
    characteristics of day laborers and their work affect Labor*s ability to
    enforce the protections afforded them under FLSA and the OSH Act. First,
    because neither WHD nor OSHA can get complete information about potential
    violations involving day laborers, it is hard to focus resources on them.
    For example, day laborers are generally reluctant or unaware of their
    right to complain to authorities about not being paid promised wages or
    working in unsafe conditions. Similarly, available information that Labor
    uses to target its investigations, such as data on injuries and
    fatalities, may not accurately reflect the extent to which day laborers
    are injured or killed. As a result, neither WHD nor OSHA may be reaching
    those industries or workplaces where day laborers work. Although both
    agencies have made efforts to educate workers or obtain better data, these
    efforts may not be sufficient. Second, WHD*s and OSHA*s investigative
    procedures make it difficult to detect violations of worker protection
    laws involving day laborers who often have nonstandard work arrangements.
    As a result, the procedures may cause both agencies to miss violations.
    Finally, WHD officials are uncertain about the extent of coverage for day
    laborers in some cases, and the responsibilities of temporary staffing
    agencies under the OSH Act are unclear. This may lead to inconsistencies
    in the protections provided to day laborers. For example, even though FLSA
    can cover employees working for homeowners in a domestic service capacity,
    some local WHD officials we interviewed did not believe this provision
    applied to day laborers. Also, because the responsibilities of temporary
    staffing agencies under the OSH Act to ensure the safety of workers they
    assign to client employers are not clearly delineated, OSHA officials had
    different approaches to holding temporary staffing agencies accountable
    for the safety of these workers.

    We are making recommendations to the Secretary of Labor to improve Labor*s
    efforts to protect day laborers, including obtaining better information to
    help focus resources on day laborers and clarifying requirements under
    FLSA and the OSH Act. Labor generally agreed with those recommendations
    that it commented on.

    Day labor is a phenomenon that is not new to the United States; it has
    traditionally served as an informal device for bringing together employers
    who need workers and individuals willing to work. Both in times of
    economic prosperity or downturn, employers see many advantages to using
    day laborers* there are generally few commitments the employer must make
    to the day laborer, and the employer has the flexibility of using the day
    laborer only when work is available. Additionally, there are Background

    Page 4 GAO- 02- 925 Protections for Day Laborers

    numerous reasons why individuals would work as day laborers* for some, it
    is an opportunity to earn income when temporarily laid off; for others, it
    is a first job in the United States; for yet others, it is the only
    employment option available given substance abuse or other social
    difficulties. In other cases, this informal relationship offers an
    opportunity for employers to avoid paying employment taxes and offers
    workers a chance to earn undetected income.

    There are generally two types of day laborers. The first type of day
    laborer is one that gathers on street corners, waiting for employers to
    drive by and offer them daily employment. (See figs. 1 and 2.)

    Figure 1: Day Laborers Waiting for Employment

    Source: Latin American Workers* Project, New York.

    Page 5 GAO- 02- 925 Protections for Day Laborers

    Figure 2: Day Laborers at an Employer*s Truck

    Source: Latin American Workers* Project, New York.

    Across the country, there are likely thousands of street corners or
    informal meeting places where day laborers wait for work. In these
    locations, it is up to the day laborer and the employer to negotiate a
    wage and various conditions of work. In many locations, however, nonprofit
    or local government agencies have made efforts to gather day laborers at a
    single site and establish procedures for obtaining work, negotiating
    wages, and ensuring that wage and safety requirements are met (see figs. 3
    to 5). Appendix II describes how several of these agencies operate.

    Page 6 GAO- 02- 925 Protections for Day Laborers

    Figure 3: Shelter Construction at an Organized Day Labor Site

    Source: Latin American Workers* Project, New York.

    Figure 4: Day Laborers Signing up for Work

    Source: Latin American Workers* Project, New York.

    Page 7 GAO- 02- 925 Protections for Day Laborers

    Figure 5: An Organized Day Labor Site

    Source: GAO.

    The second type of day laborer is one that is employed by for- profit
    temporary staffing agencies that assign them to work at client employers
    on a daily basis. To receive these assignments, day laborers must
    physically report to the temporary staffing agency office. In many cases,
    these workers are also paid on a daily basis by payroll check* in fact,
    one agency*s motto is *Work today; get paid today.* Generally, the
    temporary staffing agencies that employ day laborers are not those that
    are known for providing professional or administrative white or pink-
    collar workers to client employers.

    No national data on day laborers existed until 1995, when BLS surveyed
    various types of *contingent* workers. 2 This survey was conducted as a

    2 The term *contingent* has been used for many years to describe a variety
    of nonstandard work arrangements. It describes the impermanent nature of
    certain work arrangements, such as those (1) providing a relatively low
    level of job security, (2) with more variable or less predictable hours,
    and (3) that reflect a change in the traditional rights of workers and the
    benefits offered to them.

    Page 8 GAO- 02- 925 Protections for Day Laborers

    supplement to BLS*s monthly Current Population Survey (CPS). 3 BLS has
    conducted the supplemental survey four times: 1995, 1997, 1999, and 2001.
    Several researchers have also conducted studies on particular groups of
    day laborers in select locations across the country, including Los Angeles
    and Chicago. These studies attempted to obtain information not only about
    day laborers* demographics and work characteristics, but also about the
    extent to which day laborers may be experiencing violations of existing
    laws.

    Day laborers, like many other workers in the United States, may be covered
    by the two federal laws that govern basic wage and workplace safety
    protections: FLSA and the OSH Act. To be covered, the worker must be *an
    employee* as defined by the law, among other requirements. The protections
    afforded by these laws do not extend to independent contractors. FLSA
    requires that employers pay the federal hourly minimum wage and overtime
    to covered workers, while the OSH Act requires employers to provide a
    workplace free of recognized hazards in order to avoid worker injury,
    illness, or death. To comply with the law, employers may have to provide
    safety training and personal protective equipment, among other practices.

    FLSA originally covered only those employees engaged in interstate
    commerce or in the production of goods for commerce. 4 Coverage was later
    extended to include all employees of a business *enterprise* that met
    certain criteria. 5 Specifically, under the current law, all employees of
    an employer (such as those working for a temporary staffing agency) would
    be covered if it had some employees engaged in interstate commerce or in
    the production of goods for commerce and annual gross sales or business
    volume of at least $500,000. If annual gross sales were below $500,000,
    only those employees actually engaged in activities involving interstate
    commerce would be covered. Such activities might include taking orders
    over the telephone from customers in another state or transporting
    equipment to another state. Coverage under the OSH Act is broader. All
    employees of a particular employer are covered if the employer is engaged
    in a business affecting commerce. Coverage under the OSH Act does not

    3 The CPS surveys approximately 50, 000 households each month. This
    information is the primary source of nationally representative data used
    to develop national employment and unemployment rates.

    4 See P. L. No. 75- 718 S:S: 6, 7 (1938). 5 See P. L. No. 87- 30 S:S: 5(
    b), 6( a) (1961).

    Page 9 GAO- 02- 925 Protections for Day Laborers

    depend on the specific activities of the employee or the volume of the
    employer*s business.

    FLSA specifically covers individuals working as employees in a domestic
    service capacity for homeowners, performing tasks that would ordinarily be
    performed by the homeowner. 6 Examples of such tasks include gardening,
    housecleaning, or chauffeuring. On the other hand, while the OSH Act is
    silent on its coverage of domestic service workers, an OSHA regulation
    specifically excludes homeowners who employ workers in a domestic service
    capacity. 7 Coverage under both laws does not depend on a worker*s
    immigration status.

    To carry out their responsibilities, WHD and OSHA perform a number of
    activities. They generally conduct workplace investigations that result
    from a worker complaint or initiate them based on other information.
    Recently, both agencies have increased their emphasis on compliance
    assistance, that is, providing information to employers, workers, and
    others of their rights under the laws. These efforts require WHD and OSHA
    to work with state enforcement agencies. State laws play an important role
    in supplementing FLSA*s protections because states may enact more
    stringent provisions in their laws than in federal law. This means that a
    state law could cover employers and individuals not covered under FLSA. If
    an employer is covered under FLSA and a state law, the more stringent
    provision of either law will generally apply. Under the OSH Act, OSHA has
    delegated enforcement responsibility to state labor agencies in 23 states.
    8 These states have the option of implementing more stringent requirements
    than the federal program, and in many cases, they have done so. For
    example, California requires employers to have an injury and illness
    prevention program* something not required by OSHA.

    6 Workers performing domestic service qualify for the minimum wage if they
    work a total of more than 8 hours a week for one or more employers or
    receive cash wages from one employer totaling at least $1,300 in 2002. See
    29 U. S. C. S: 206( f); 66 Fed. Reg. 54047 (Oct. 25, 2001).

    7 29 C. F. R. S: 1975.6. 8 The OSH Act allows states to operate their own
    safety and health programs as long as they are determined by OSHA to be at
    least as effective as the federal OSHA program. Two of the state programs
    cover only state and local government employees.

    Page 10 GAO- 02- 925 Protections for Day Laborers

    Available information indicates that the day laborer workforce is prone to
    workplace abuses and is probably undercounted. The characteristics of day
    laborers that we and others identified, such as limited English
    proficiency, are generally recognized by Labor and others as those that
    make workers vulnerable to workplace abuses. Moreover, our work and other
    recent research indicate that the size of the day laborer population may
    be greater than nationally available data suggest.

    While individual sources may be limited in scope, taken together, they
    provide a general picture of the day laborer population as young Hispanic
    men with limited educational skills and significant language barriers. Our
    interviews with nonprofit and local government agencies working with day
    laborers indicated that the majority of day laborers were Hispanic men,
    with some portion being foreign born. 9 A study performed by a researcher
    in California generally corroborated this, finding that nearly one- third
    of the day laborer population studied had been in this country for less
    than 1 year. 10 We also found that, even though the majority of the day
    laborers were between 18 and 30 years old, they generally had less than a
    high school education; the study in California found that, in some cases,
    day laborers had only about 7 years of education. 11 We also found that
    these workers often lacked basic proficiency in speaking or writing
    English, with some of them not even proficient in their own language.
    Finally, although we were unable to quantify the percentage, we found that
    some portion of the day labor population was undocumented. 12 In some
    cases,

    9 We also identified some day laborers who were black, eastern European,
    or female. Although available BLS data show most day laborers are white
    (88 percent), this is because ethnicity is asked separately from race.
    Thus, Hispanics will indicate first whether they are of white or black
    race, then separately indicate their ethnicity as Hispanics. Data from the
    survey show that Hispanics make up nearly 40 percent of the entire day
    laborer population.

    10 Abel Valenzuela, Jr., Working on the Margins: Immigrant Day Labor
    Characteristics and Prospects for Employment, Working Paper No. 2, Center
    for Comparative Immigration Studies, University of California- San Diego,
    May 2000.

    11 We did find a small percentage of day laborers who had more than a high
    school diploma, usually obtained in their home country. 12 Individuals
    working for temporary staffing agencies may be more likely to be
    documented and authorized to work since they generally have to provide
    documentation of their legal work status to their employer. However, we
    were told of instances where temporary staffing agencies did not ask for
    documentation or where day laborers provided fraudulent documentation.
    Available Data

    Suggest that Day Laborer Population Is Vulnerable and May Be Undercounted

    Data on Day Laborer Characteristics Show a Population at Risk

    Page 11 GAO- 02- 925 Protections for Day Laborers

    day laborers working for temporary staffing agencies were slightly more
    ethnically diverse, with higher levels of education and skills. 13

    Research has shown that these characteristics make workers vulnerable to
    various types of workplace dangers and abuses, a fact that Labor also
    acknowledges. 14 First, immigrants to the United States, especially newer
    ones, are more willing to accept lower wages and substandard work that
    offers few benefits or protections, which makes them attractive to
    unscrupulous employers who may exploit them as a cheap source of labor.
    For example, often immigrants take the more informal, contingent work in
    this country, and we found in a previous GAO report that workers in
    contingent work arrangements had lower family incomes than those in
    traditional work arrangements and many have incomes below the federal
    poverty threshold. 15 Second, lower education and skill levels often mean
    that workers are willing to take jobs that pose a greater health risk. In
    that respect, we found that most of the day laborers worked in unskilled
    occupations, such as laborer or landscaper, in more hazardous industries,
    such as construction; day laborers working through temporary staffing
    agencies were also employed in manual labor occupations in manufacturing
    and warehousing. Lower educational levels also mean that workers may not
    be aware of the labor protections available to them, their rights as
    employees under the law, or the dangers associated with hazardous
    conditions. Third, limited proficiency in speaking or reading English
    makes it more difficult for workers to understand the relative risk of
    their employment or communicate such dangers to employers, a point
    stressed by representatives of several nonprofit and local government
    agencies we interviewed that worked with day laborers. Finally, being
    undocumented means that workers may not want to be found, so they will
    endure a higher level of abuse to remain undetected.

    13 Several temporary staffing agencies were unable to provide specific
    information on race, age, and educational levels because they do not
    collect this type of information. 14 This report does not fully address
    the characteristics or vulnerability of day laborers who are not served by
    any group, as that information is difficult to obtain. For example, we
    heard of Chinese day laborers in New York working for storefront or *fly-
    by- night* temporary staffing agencies. These workers are likely to be as
    vulnerable as those day laborers working with the agencies we contacted.

    15 See U. S. General Accounting Office, Contingent Workers: Incomes and
    Benefits Lag Behind Those of Rest of Workforce, GAO/ HEHS- 00- 76,
    (Washington, D. C.: June 30, 2000). The Department of Health and Human
    Service*s 2002 Poverty Guidelines identifies the poverty threshold for a
    family of three as $15,020.

    Page 12 GAO- 02- 925 Protections for Day Laborers

    The only nationally representative source of data on day laborers is BLS*s
    CPS Contingent Work Supplement. For a variety of reasons, these data may
    underestimate the actual number of day laborers seeking work in the United
    States. Data from the survey show that in 2001, there were about 260,000
    individuals working as day laborers. 16 BLS also reported that about 1.2
    million workers found work through temporary staffing agencies in 2001,
    but the survey does not attempt to determine what percent of those
    individuals, if any, were day laborers. Other studies of day laborers are
    not national in scope, but may indicate the presence of relatively large
    numbers of day laborers. For example, one study of day laborers in
    Southern California estimated the population to be as high as 20,000 in
    one metropolitan area. 17 Based on our interviews with nonprofit and local
    government agencies that serve day laborers on street corners, we
    identified about 2,600 day laborers who seek work daily from 28 street
    corners identified by these agencies. Regarding day laborers working
    through temporary staffing agencies, staff at one agency serving day
    laborers estimated that about 30,000 day laborers were sent out each day
    by temporary staffing agencies in Chicago alone. Moreover, one national
    temporary staffing agency we interviewed reported that it employed almost
    700,000 individuals as day laborers in 2001.

    When one considers the methods used by BLS to collect data on day
    laborers, the findings of these additional studies may be even more
    convincing as to the potential undercounting of day laborers. We have
    reported that BLS*s methodology is inadequate for measuring certain hard-
    to- reach segments of the population and, as a result, may undercount
    them. 18 For example, BLS*s survey relies on address lists that are
    dependent on stable or established residences. Day laborers may move
    frequently to find work or live with relatives. In addition, BLS does most
    of the interviewing by telephone, and day laborers may not have access to
    a

    16 BLS does not publish information on day laborers separately, but while
    the number of other types of contingent workers has remained relatively
    stable since 1995, the number of day laborers has increased by 135
    percent. In 2001, day laborers accounted for about 2 percent of the
    contingent workforce.

    17 See footnote 10. 18 U. S. General Accounting Office, Child Labor in
    Agriculture: Changes Needed to Better Protect Health and Educational
    Opportunities, GAO/ HEHS- 98- 193, (Washington, D. C.: Aug. 21, 1998).
    Size of the Day Laborer

    Population May Be Greater than Available Data Indicate

    Page 13 GAO- 02- 925 Protections for Day Laborers

    telephone, or speak English. 19 Finally, individuals who are wary of
    government may avoid participating in surveys. None of the day laborers we
    interviewed at the four sites we visited recalled ever being surveyed by
    the government. 20

    A number of factors affect Labor*s ability to enforce the protections
    afforded day laborers under FLSA and the OSH Act. 21 The limited
    information available on day laborers makes it difficult for WHD and OSHA
    to focus resources on them. In addition, traditional investigative
    procedures used by WHD and OSHA may hurt their ability to detect
    violations affecting employees in nonstandard work arrangements, such as
    day laborers. Finally, applying FLSA and the OSH Act to day laborers is
    challenging because it requires sufficient information and resources to
    determine coverage. In addition, in some cases, WHD officials are
    uncertain about the extent of coverage for day laborers under FLSA, and
    the responsibilities of temporary staffing agencies under the OSH Act are
    unclear, which may lead to situations where day laborers are not
    protected.

    WHD and OSHA generally rely on two types of information to conduct
    investigations to identify potential violations. They (1) rely on
    complaints from individuals who believe they may have suffered a violation
    and (2) analyze data on wages or workplace conditions to specifically
    target

    19 BLS said that it can conduct the survey in person if necessary and does
    have the ability to conduct the survey in Spanish; however, some day
    laborers may not have a fixed address or may speak a language other than
    Spanish.

    20 Moreover, the characteristics of this workforce reflected in BLS*s data
    raise questions about the extent to which BLS reaches day laborers
    employed by temporary staffing agencies. For example, BLS*s 2001 data show
    that individuals working for temporary staffing agencies are predominately
    white and employed in clerical and administrative occupations, which does
    not reflect the characteristics of day laborers working for temporary
    staffing agencies.

    21 We determined that the day laborers who were the subject of our review
    generally do not appear to meet the legal criteria to be considered
    independent contractors under the OSH Act or FLSA. We determined this
    through our structured interview questions regarding the ownership of
    tools and transportation and the supervision of employees. Labor*s Efforts
    to

    Enforce Protections for Day Laborers Are Hampered by Limited Data,
    Traditional Procedures, and Difficulty in Determining Coverage

    Limited Information about Day Laborers Makes it Difficult to Focus
    Resources on Them

    Page 14 GAO- 02- 925 Protections for Day Laborers

    problematic industries or worksites. In both cases, this information fails
    to identify the presence of day laborers or potential violations affecting
    them.

    Both WHD and OSHA initiate much of their enforcement activity in response
    to complaints filed by individual workers. In fiscal year 2001, about 70
    percent of WHD*s investigations under FLSA were complaintdriven; for some
    industries, such as the construction or temporary staffing industry, the
    majority of the investigations it conducted were due to complaints. OSHA
    is required by law to respond to all valid complaints about serious
    hazards from employees, 22 although it relies less heavily on complaints
    than WHD, historically initiating about 20 percent of its investigations
    based on complaints. 23 However, WHD and OSHA officials reported that they
    received few or no complaints from day laborers. Day laborers may not
    complain for a variety of reasons. For some day laborers, language
    barriers may prevent them from being aware of or taking advantage of their
    right to complain to authorities. In addition, the day laborers may fear
    loss of employment, either through employer retribution, deportation, or
    the time necessary to file and resolve a complaint. 24 Representatives of
    nonprofit agencies serving day laborers told us of cases where, even when
    they have filed complaints, they have received little action from WHD or
    it has taken too long for WHD to complete a case. 25

    Nonetheless, available information indicates day laborers face numerous
    potential violations. Many of these potential violations involve
    nonpayment of wages, including overtime. For example, the majority of
    nonprofit and local government agencies working with day laborers we
    interviewed reported that day laborers complained at least once a week
    about nonpayment of wages. These agencies reported that they recovered

    22 OSHA also responds to all fatalities, catastrophes, and cases of
    imminent danger. 23 In some states, the percentage of compliant- driven
    inspections is higher than the national average. 24 In one of our previous
    reports, Labor officials reported that there is a misperception among the
    foreign- born working community, actively promoted by those who do not
    want employees to cooperate with Labor, that cooperating with Labor will
    automatically result in an Immigration and Naturalization Service
    investigation. See U. S. General Accounting Office, Illegal Aliens:
    Significant Obstacles to Reducing Unauthorized Alien Employment Exists,
    GAO/ GGD- 99- 33, (Washington, D. C.: Apr. 2, 1999).

    25 We reviewed a sample of complaint- based investigations in the
    temporary staffing industry for both OSHA and WHD and confirmed that none
    of the complaints came from day laborers.

    Page 15 GAO- 02- 925 Protections for Day Laborers

    over $750,000 in owed wages that day laborers did not receive from
    employers in 2001. Other researchers corroborated our findings, reporting
    that over half of the day laborers in their studies were not paid the
    wages due to them. 26 Violations may also involve the safety and health of
    day laborers. For example, the majority of the nonprofit and local
    government agencies working with day laborers that we interviewed said
    that few, if any, day laborers receive personal protective equipment or
    safety training. Other researchers corroborated our findings, with one
    reporting that 75 percent of day laborers in the study did not receive
    protective equipment when performing hazardous work. 27 Many researchers
    and agencies dealing with day laborers agreed that day laborers
    underreport their concerns about workplace safety and health because they
    believe no corrective action will be taken and are willing to risk their
    safety as long as they are paid.

    Labor has made various efforts to address the fact that day laborers are
    less likely to complain. These efforts include educating workers and
    improving access to the complaint process. For example, in Chicago, OSHA
    and WHD have been working with nonprofit and faith- based organizations to
    educate workers about their rights and help them identify potential
    violations. As a result, OSHA received complaints that resulted in 35
    cases with violations that it may not have otherwise detected. In its
    comments on a draft of this report, WHD said that it has been increasing
    its appearances on Spanish- speaking radio and television in an effort to
    inform workers about their rights. OSHA, in its comments, also provided
    additional information on its efforts to provide assistance with safety
    and health training for day laborers. According to nonprofit agencies we
    interviewed that work with day laborers, information and assistance
    provided to day laborers led to improved working conditions and a decline
    in the need to file complaints. We did not find similar levels of outreach
    in all locations we visited, and not all outreach efforts have included
    temporary staffing agencies or a broad range of organizations that work
    with day laborers.

    Regarding access to the complaint process, OSHA has translated its
    complaint form and other publications into Spanish, created a

    26 See, for example, Dan Kerr and Chris Dole, Challenging Exploitation and
    Abuse: A Study of the Day Labor Industry in Cleveland, Prepared for the
    Cleveland City Council, Ohio, Sept. 2, 2001.

    27 See footnote 10.

    Page 16 GAO- 02- 925 Protections for Day Laborers

    1- 800 telephone number accessible to Spanish speakers, and developed a
    Spanish language web site. OSHA has also compiled a list of Spanish
    speakers in the agency and has formed an Hispanic Task Force that is,
    among other things, developing recommendations for implementing a national
    strategy to address the problems of Hispanic and immigrant worker
    populations. WHD is in the process of translating compliance assistance
    materials into Spanish and has about one- quarter of its staff that speak
    Spanish. WHD*s national office told us that it has developed a *Wage Hours
    Recordkeeper* in English and Spanish to provide temporary and transient
    workers* such as day laborers* the information needed to determine if they
    are paid properly. While both agencies are making progress in their
    activities, these efforts may not reach the full range of day laborers,
    since they generally lack access to the Internet, may speak languages
    other than Spanish, or may be illiterate.

    The second way that WHD and OSHA identify potential violations is by
    analyzing available data on workplace demographics, conditions, and past
    investigations to target problematic industries or worksites. Generally,
    WHD targets industries with the lowest wages or the most vulnerable
    workers. For example, WHD uses BLS data on worker demographics, yet as we
    noted earlier, BLS data may undercount workers with characteristics
    similar to those of day laborers. WHD also uses wage information to
    identify low- paying occupations or industries, yet our research showed
    that day laborers obtaining employment from street corners work an average
    of 2 to 3 days a week and are generally paid in cash at the end of the
    day. As a result, it is not clear whether these kinds of wage payments
    would be reflected in data collected from employers on wages paid to
    workers. On the basis of this type of information, WHD identified
    industries other than construction or the temporary staffing industry for
    their national targets. Yet, most of the agencies we surveyed reported
    that a majority of day laborers work in the construction industry. 28
    Finally, the database on past investigations that WHD uses to target
    industries does not identify whether violations involve day laborers. For
    example, WHD*s data show that, in 2001, temporary staffing agencies had a
    higher likelihood of monetary violations than employers in any other
    industries investigated, but the database does not identify whether any of
    these workers are day laborers.

    28 At the local level, WHD offices have the authority to target
    construction. In 2001, about 3 percent of WHD*s investigations in
    construction were targeted.

    Page 17 GAO- 02- 925 Protections for Day Laborers

    OSHA targets the most hazardous industries and worksites for
    investigation, using injury and illness data collected and reported by
    employers and its database on past investigations. However, this
    information does not show where day laborers work or the full extent of
    their injury experience because when employers record an injury, they are
    not required to note whether the worker was a day laborer. Furthermore,
    because client employers* not temporary staffing agencies* must record
    injuries and fatalities of temporary staffing agency day laborers, the
    data OSHA uses cannot identify the extent to which day laborers working
    for temporary staffing agencies are injured or killed. Finally, when OSHA
    targets particular worksites for investigation, the information it uses
    may not reflect smaller worksites, where many day laborers work and which
    experts believe are the most hazardous sites in the industry. For example,
    OSHA targets construction at the national level, but the data it uses to
    target worksites in the industry does not generally include construction
    projects valued at less than $50, 000 and that are residential. OSHA*s
    local offices have flexibility to exclude additional construction
    worksites from targeted inspection; we found some local offices excluded
    projects valued at up to $2,000,000. In addition, because OSHA counts
    inspections by the number of contractors at a worksite, there is an
    incentive to target larger construction worksites, which may be likely to
    have more contractors.

    Recently, both WHD and OSHA made efforts to collect additional data that
    better identified potential violations involving day laborers working for
    temporary staffing agencies. A regional WHD office collected data from a
    randomly selected number of temporary staffing agencies to determine
    whether these agencies were in compliance with FLSA. In 1997, local OSHA
    offices in Ohio obtained workers* compensation data to better identify
    injury rates for day laborers working at temporary staffing agencies. 29
    These improved data helped the agencies determine wage and safety problems
    that may have otherwise gone undetected. For example, WHD found that
    almost one- third of temporary staffing agencies were not in compliance
    with FLSA, while OSHA found that temporary staffing agencies had some of
    the highest numbers of workers* compensation claims with total costs
    exceeding $8.4 million. 30 In both cases, the offices

    29 Although the client employer records an injury, the temporary staffing
    agency pays workers* compensation for the injured worker. 30 High rates of
    workers* compensation payments indicate either a large number of injuries
    or potentially fewer injuries that incurred significant costs* an
    indicator of a potentially hazardous work environment.

    Page 18 GAO- 02- 925 Protections for Day Laborers

    worked with the temporary staffing agencies to reduce wage and hour abuses
    and ensure a safer workplace. For example, OSHA*s Ohio office began the
    Choice program to work with temporary staffing agencies, providing
    compliance assistance to smaller agencies and requiring on- site
    investigations of all injuries involving temporary workers, such as day
    laborers. Recent results show that 60 percent of the participating
    temporary staffing agencies reduced their overall workers* compensation
    costs and over half reduced the number of workdays lost to injuries and
    illnesses. While these initiatives may help WHD and OSHA better identify
    where day laborers work and the violations they face, the agencies have
    not yet fully assessed the results of these efforts to consider their
    application agencywide.

    At the national level, OSHA is undertaking another effort to collect
    additional data that will provide a better understanding of the extent to
    which day laborers are involved in workplace fatalities. In 2002, OSHA
    implemented a temporary procedure that required OSHA investigators, for
    all fatality and catastrophe investigations, to determine if the worker
    was foreign- born, Hispanic, or had language barriers. If that were the
    case, the OSHA investigator would then determine if the worker was a day
    laborer. OSHA has not yet begun to evaluate this information, but the
    information should prove useful to gain a better understanding of day
    laborers* fatality experience. However, this process is still in the pilot
    stage and OSHA will not identify fatalities and catastrophic accidents of
    day laborers that are not foreign born, Hispanic, or do not have language
    barriers. Moreover, OSHA does not ask if the day laborer was provided
    through a temporary staffing agency.

    Although both WHD and OSHA conduct thousands of investigations each year
    to detect employer noncompliance and remedy potential violations, their
    investigative procedures may not be able to detect violations affecting
    employees in nonstandard work arrangements, such as day laborers. As part
    of their investigations, WHD and OSHA are visiting fewer worksites, and
    WHD generally gives advance notice when it visits worksites. As a result,
    both agencies may miss potential violations involving day laborers.

    WHD and OSHA conduct thousands of investigations each year without
    visiting worksites. For example, in 2001, WHD conducted as many as 55
    percent of its investigations by fax or telephone. Although OSHA does not
    keep similar statistics, since 1995, it has been encouraging its
    investigators to handle complaint investigations informally by telephone.
    Labor*s Investigative

    Procedures Make it Difficult to Detect Violations Affecting Employees in
    Nonstandard Work Arrangements

    Page 19 GAO- 02- 925 Protections for Day Laborers

    By not going on- site, investigators lose the opportunity to observe the
    worksite or interview employees. Also, in some instances, the
    investigations focus on a single worker, a single minor violation, or a
    particular timeframe. All of these are activities that reduce WHD*s and
    OSHA*s ability to uncover potential violations affecting day laborers. In
    addition, FLSA provides Labor with no authority to assess penalties for
    failing to keep accurate payroll records. 31 Without the threat of a
    financial penalty from WHD and because employers may hire day laborers to
    purposely avoid costs, such as overtime and taxes, wage records may not
    reflect actual payments made to workers, such as day laborers. Without
    visiting the workplace, WHD cannot compare employers* wage records with
    individuals actually working at the site to make sure that the payroll
    records accurately reflect all the workers and the payments made. WHD data
    show that WHD is five times more likely to find violations of
    recordkeeping requirements when it visits the workplace or collects
    additional information.

    When WHD does visit worksites, the procedures it uses may reduce the
    likelihood of uncovering potential violations related to day laborers.
    According to WHD guidance, investigators have the discretion to give
    employers advance notice of an impending investigation, but it would be
    inappropriate to provide such notice when there is reason to believe that
    the employer*s behavior will change as a result of advance notice. The
    local WHD offices we visited provided advance notice for the majority of
    their investigations. Given that employers hire day laborers sporadically,
    employers may choose not to hire day laborers on the day of the
    investigation or alter records for the investigation, limiting WHD*s
    opportunity to find day laborers.

    Applying FLSA and the OSH Act to day laborers is challenging for a number
    of reasons. In some cases, WHD lacks the necessary information on
    potential violations or the resources to determine coverage under FLSA. In
    other cases, the extent to which these laws cover day laborers is
    uncertain. Even when these laws cover day laborers, they may not account
    for the nonstandard work arrangements of day laborers, which could
    jeopardize their economic or physical well- being.

    31 A court can assess a penalty if an employer is convicted of willfully
    violating recordkeeping requirements. 29 U. S. C. S:S: 215( a)( 5), 216(
    a). Labor Faces Challenges

    When Applying Provisions of FLSA and the OSH Act to Day Laborers

    Page 20 GAO- 02- 925 Protections for Day Laborers

    Applying FLSA and the OSH Act to day laborers is difficult because
    coverage may depend upon the type of employer or the specific work a day
    laborer performs. Under FLSA, day laborers employed by enterprises with an
    annual business volume of more than $500,000 and some employees engaged in
    interstate commerce are covered; this could include day laborers working
    for large temporary staffing agencies. However, it is not always clear how
    coverage would apply to day laborers employed by enterprises making less
    than $500,000 per year because only those workers determined to be engaged
    in interstate commerce or in the production of goods for commerce are
    covered. According to WHD officials, in some cases, WHD officials are
    unable to obtain the information needed to determine this coverage. For
    example, we found that many day laborers work for small construction
    subcontractors performing manual labor, such as installing drywall.
    According to WHD officials, a determination would have to be made that the
    building the day laborer worked on was to be used for interstate
    commercial activity in order for the day laborer to be covered. However,
    this kind of information is not always available. In other cases,
    information on the employer location and hours worked is not readily
    available. Proving such coverage can be difficult and resource- intensive.
    Because WHD*s resources are limited, it must determine the potential
    impact of investigating smaller employers that may have violations
    affecting a small number of individuals versus larger employers that may
    have greater numbers of individuals and more violations.

    In other cases, coverage may depend on how local offices determine whether
    an employee is engaged in the production of goods for commerce. For
    example, a worker may be covered if engaged in an activity that is
    *closely related or directly essential* to the production of goods for
    interstate commerce. In applying this provision, WHD officials explained
    that a day laborer serving as a security guard for a building that houses
    companies involved in the production of goods would be covered because
    that activity is closely related or directly essential to these interstate
    activities. Yet, a day laborer mowing the lawn at the same building would
    not be covered because that function would not be considered closely
    related or directly essential to these interstate activities. The
    distinction is not always obvious and Labor has recognized this in its
    regulations. According to Labor, coverage cannot always be determined with
    precision Some Provisions of FLSA and

    the OSH Act Are Difficult to Apply

    Page 21 GAO- 02- 925 Protections for Day Laborers

    and may require authoritative decisions of the courts for a final
    determination. 32

    Regarding domestic service work, FLSA provides that employees doing
    household chores are covered if they meet certain requirements. Not all
    WHD officials appeared to recognize the application of this provision to
    day laborers. WHD officials at headquarters said that day laborers picked
    up from street corners would be covered by this provision of FLSA, while
    officials in the WHD district offices we visited had differing views. For
    example, one office interpreted this provision to cover only long- term
    domestic employees. As a result, day laborers performing domestic service
    work may be protected under this provision in some areas but not in
    others.

    Because of the difficulty in asserting coverage for individuals working
    for small employers, WHD often refers such potential violations to state
    enforcement agencies. 33 In some cases, state laws may provide greater
    protection than FLSA. For example, all four states we visited protect the
    wages workers were promised, which can exceed the federal minimum wage.
    (App. III compares selected wage provisions under FLSA and the laws and
    requirements of the four states we visited.) However, we found that, in
    practice, advantages associated with relying on state enforcement agencies
    may not be realized. First, not all states* laws cover small employers,
    for example, neither Virginia*s nor Illinois* law covers employers with
    four or fewer workers. As a result, day laborers working for very small
    employers may be unlikely to get protection under FLSA or the state law.
    Second, most of the state officials we interviewed said that their
    investigations were *complaint- driven.* Officials in Illinois and New
    York, for instance, reported spending all of their time responding to
    complaints. This, combined with their limited resources, makes it unclear
    that they could pursue all referrals from WHD. Third, officials in some
    states we visited told us that their investigators rarely pursued
    enforcement actions that required on- site investigations, relying
    primarily on telephone or fax investigations. As a result, like WHD, state
    agencies may also miss violations. This reliance on state enforcement
    agencies may be even more problematic for day laborers not covered by FLSA
    in those

    32 29 C. F. R. S: 776.17. 33 WHD might also inform the individuals of
    their private right of action to file suit in state or federal court.

    Page 22 GAO- 02- 925 Protections for Day Laborers

    states with less stringent protections, such as no minimum wage or
    overtime provisions.

    While day laborers employed by temporary staffing agencies are covered by
    the OSH Act, the exact responsibilities of temporary staffing agencies and
    that of their clients is not always clear. According to OSHA, temporary
    staffing agencies are responsible for general safety training and the
    provision of general personal protective equipment. Yet, there is no
    clear, centralized guidance from OSHA on the legal responsibilities of
    temporary staffing agencies or their clients to properly ensure the safety
    of the day laborers they employ. Neither the OSH Act nor the implementing
    regulations elaborate on these responsibilities. Furthermore, OSHA has
    provided interpretations of the requirements in response to inquiries, but
    temporary staffing agencies are not required to follow them. Determining
    whether the temporary staffing agency or client employer is responsible
    for providing training and can be cited for failing to ensure the safety
    of their workers is a complex area that may be confusing, which may leave
    day laborers without sufficient safety and health protections at the
    worksite. For example, a local OSHA office cited both the temporary
    staffing agency and client employer after temporary workers suffered
    injuries at the client employer*s worksite for failing to provide
    sufficient training and concluded that each employer believed the other
    employer was responsible for training the workers. On the other hand, some
    OSHA officials said that they would be less likely to cite temporary
    staffing agencies. If temporary staffing agencies are not appropriately
    cited, day laborers working for these agencies may be subject to
    inadequate safety and health protections. A centralized source of
    information clarifying the role of temporary staffing agencies and client
    employers could allow OSHA to more uniformly apply the law and make it
    easier for both temporary staffing agencies and client employers to
    understand their responsibilities.

    Even when WHD and OSHA are able to enforce protections under FLSA and the
    OSH Act, certain practices allowed by these laws may adversely affect day
    laborers* economic and physical well- being. The unique characteristics
    and nonstandard work arrangements of day laborers make them more
    susceptible to these practices than workers in traditional work
    arrangements. These practices relate to wage deductions, transportation
    safety, and compensation for time waiting to be employed. Addressing these
    issues is difficult because any resolution would involve complicated
    tradeoffs between the potential benefits to day laborers and the potential
    costs to employers. Certain Practices under

    Existing Laws May Adversely Affect Day Laborers

    Page 23 GAO- 02- 925 Protections for Day Laborers

    Under FLSA, an employer can take a variety of deductions from wages. 34
    Employers can deduct charges for items such as meals, lodging,
    transportation, or cashing of payroll checks as long as the item is for
    the employee*s benefit and acceptance is voluntary and uncoerced.
    Employers can deduct these items even if they bring wages below the
    federal hourly minimum wage. 35 Employers can also deduct charges for
    other items, such as tools or uniforms, as long as those items do not take
    the employee*s wages below the federal hourly minimum wage. 36
    Representatives of temporary staffing agencies told us that they generally
    pay minimum wage or whatever the local market will bear and generally take
    the standard deduction for taxes as well as other items, such as
    transportation, from day laborers* pay. Agencies we interviewed that work
    with day laborers reported that most day laborers relied on employers for
    some of these items. 37 As a result, the hourly wage received by day
    laborers can often be much less than the originally established wage.
    Nonprofit and local government agencies working with day laborers told us
    that some day laborers receive $2 an hour as a result of several
    deductions. These practices do not generally affect traditional workers
    because they do not rely on employers for services such as transportation,
    check cashing, or meals.

    Another practice that may have greater repercussions for day laborers than
    for traditional workers concerns physical safety when commuting to and
    from the worksite. Over the past 2 years, there have been several reports
    of day laborers being killed or injured while being driven to a worksite
    by an employer. In 2001, for example, a temporary worker was killed as she
    was being transported by the temporary staffing agency to a job
    assignment. OSHA did not investigate the case because it was outside its
    jurisdiction. In general, individuals commuting to and from work are not
    considered to be working, so their transportation safety is not covered
    under the OSH Act. However, the commuting pattern for day laborers is
    different than the pattern for workers in traditional work arrangements.

    34 See 29 U. S. C. S: 203( m); 29 C. F. R. pt. 531. 35 These items can be
    deducted only if they are customarily provided and priced at a reasonable
    cost or fair value. 29 C. F. R. S:S: 531. 30-. 33,. 36-. 37. Check cashing
    fees or other such deductions are illegal in some states.

    36 See 29 C. F. R. S: 531.36( b). 37 One temporary staffing agency we
    interviewed dispenses pay using a cash machine that charges a fee ranging
    from $1 to $1.99. A pending class action suit in three states alleges this
    practice is illegal.

    Page 24 GAO- 02- 925 Protections for Day Laborers

    Most workers in traditional work arrangements rely on their own car, a
    carpool, or public transportation to get from home to the workplace. Day
    laborers, on the other hand, travel from their homes to a nearby location,
    such as a street corner or a temporary staffing agency, to obtain work.
    Because day laborers often do not have access to a car or work in
    locations inaccessible by public transportation, they depend on the
    employer to get them from the street corner or temporary staffing agency
    to the worksite. Federal law covers transportation for migrant and
    seasonal agriculture workers to and from the job site if they are
    transported by their employer. 38 Additionally, because employers are not
    required by OSHA to record an injury that occurs during transport, OSHA
    cannot determine how often this occurs. Assuming that day laborers are
    less likely to receive workers* compensation or have health insurance, any
    medical costs associated with the injury would be incurred by the
    community at large.

    Compensation for waiting time is another issue that may affect day
    laborers differently than workers in traditional work arrangements. Most
    workers in traditional work arrangements have a steady employer and
    regular work location and go directly from home to the worksite. Day
    laborers, on the other hand, must wait at particular locations to obtain
    employment* even if they are employed by temporary staffing agencies. We
    found that, in many cases, day laborers wait 3 to 4 hours before being
    assigned a work assignment, spend between 1 to 3 hours in travel time to
    and from the worksite, and generally work at least 8 hours on the job.
    This could add up to a 12- to 15- hour day. According to WHD officials,
    waiting on a street corner for a job offer or at a temporary staffing
    agency for an assignment to a client is not counted as wait time. In
    addition, even after a worker is provided a work assignment, WHD generally
    would not consider the time it takes to get to the site to be compensable
    work time under FLSA. 39

    Both WHD and OSHA acknowledge that those individuals working as day
    laborers are some of this nation*s most vulnerable workers. Moreover, both
    struggle with the problem that the characteristics that make day

    38 29 U. S. C. S: 1841. 39 Labor*s Office of the Solicitor commented that,
    depending on the particular facts, some waiting time may be compensable,
    such as when the waiting time occurs between the first and last tasks
    performed during a workday. Conclusions

    Page 25 GAO- 02- 925 Protections for Day Laborers

    laborers most susceptible to workplace abuses also make it difficult for
    Labor and others, especially in light of limited resources, to find and
    protect them. It is also difficult to protect a group of workers that may
    not want to be found. These difficulties may lead to workers who are not
    receiving the protections they are entitled to under law, as well as
    larger problems associated with an underground economy, illegal
    immigration, and unreported income. Both WHD and OSHA have made a
    commitment to protect these workers and others like them, but they are
    hampered by incomplete data and difficulty in applying some of the legal
    protections available to these workers.

    Both agencies* efforts to protect day laborers could be enhanced by having
    better information about where day laborers work and what violations they
    may face. While current efforts to provide education and outreach and
    collect additional data on day laborers have promise, such efforts can be
    expanded. For example, efforts by OSHA and WHD may benefit from greater
    involvement with temporary staffing agencies or a larger network of
    agencies representing day laborers to ensure that day laborers are aware
    of their rights. Also, WHD and OSHA could benefit by exploring the results
    of their local efforts to collect additional data on day laborers working
    for temporary staffing agencies. By not doing so, WHD and OSHA lose the
    opportunity to identify better ways to obtain valuable information about
    where day laborers work and the potential violations they face. Moreover,
    unless OSHA refines and permanently implements its data collection
    procedure for fatality investigations, it may not get a complete picture
    of the number or characteristics of day laborers killed on the job.

    Finally, WHD officials did not uniformly understand how to apply FLSA*s
    domestic service provision to day laborers. Because of this apparent lack
    of understanding, day laborers providing identical services for homeowners
    may be treated differently depending on the knowledge level of WHD
    officials. Furthermore, with respect to OSHA, in the absence of
    regulations or a centralized source of information that specifies the
    responsibilities of temporary staffing agencies for the health and safety
    of their workers, OSHA*s local offices may risk inconsistent application
    of the OSH Act and joint employers may fail to provide sufficient safety
    protections.

    To further WHD*s and OSHA*s efforts to obtain better information
    concerning the presence of and potential for violations involving day
    laborers, we recommend that the Secretary of Labor: Recommendations for

    Executive Action

    Page 26 GAO- 02- 925 Protections for Day Laborers

     direct WHD and OSHA, as a part of their education and outreach efforts,
    to enhance the procedures they use to reach day laborers, such as
    expanding their contact with temporary staffing agencies or other agencies
    that work with day laborers;

     direct WHD and OSHA to review the results of local efforts to obtain
    additional data on the presence and violation experience of day laborers
    working for temporary staffing agencies for possible replication in other
    locations or agencywide; and

     direct OSHA to finalize its current effort to collect data on fatalities
    and catastrophes and refine it by asking first whether someone is a day
    laborer, including whether the individual worked for a temporary staffing
    agency.

    To ensure that Labor*s local offices have consistent policies and an
    understanding of how and when to enforce protections afforded under FLSA
    and the OSH Act, we recommend that the Secretary of Labor:

     instruct WHD to clarify when day laborers may be covered under the
    domestic service provision of FLSA; and

     instruct OSHA to consider the development of regulations to specify
    temporary staffing agency responsibility for safety and health under the
    OSH Act, or at a minimum, centralize existing information on temporary
    staffing agencies* responsibilities.

    WHD and OSHA provided us with written comments on a draft of this report,
    which are reproduced in appendixes IV and V, respectively. WHD agreed with
    all of the recommendations that applied to it. OSHA agreed with our
    recommendation regarding enhancing the education and outreach procedures
    it uses to reach day laborers and did not object to the others. The
    agencies also provided technical comments, as did BLS and Labor*s Office
    of Solicitor, which we incorporated in the report where appropriate.

    Both WHD and OSHA emphasized their commitment to protecting day laborers
    under FLSA and the OSH Act. WHD said that it is strongly committed to
    providing effective compliance assistance to those workers covered by
    FLSA. OSHA said that employers of day laborers have the same obligations
    as any other employer. Nonetheless, OSHA acknowledges that particular
    outreach and enforcement efforts may be necessary to address the
    particular circumstances of day laborers. Agency Comments

    and Our Evaluation

    Page 27 GAO- 02- 925 Protections for Day Laborers

    Both agencies provided additional information on their outreach efforts.
    For example, WHD is developing a plain language fact sheet, in English and
    Spanish initially, covering the application of wage and hour laws to the
    employment of temporary workers such as day laborers. OSHA has formed an
    alliance with the Hispanic Contractors of America to expand outreach and
    communication on safety and health awareness and best practices for
    Spanish- speaking employers and employees in the construction industry.

    WHD and OSHA commented on our assessment of particular procedures
    affecting their ability to detect violations involving day laborers. Both
    agencies said that off- site investigations, such as telephone and fax
    contacts with employers, are the most timely and effective method of
    securing last paychecks for workers. They noted that these investigations
    can be used as an indicator that an on- site investigation of the employer
    might be warranted. We agree that this method may be efficient and have
    value for workers who are likely to complain about working conditions;
    however, we continue to believe that this method may not be the most
    effective for day laborers, who generally may be reluctant to complain.
    OSHA also said that its construction targeting, which generally reaches
    larger sites, does not preclude OSHA from inspecting sites where day
    laborers can be found because small contractors regularly subcontract work
    at large construction sites and at many projects valued over $50,000.
    However, several experts told us that larger construction contractors with
    higher- value projects tend to use unionized subcontractors who rarely
    hire nonunion workers, such as the day laborers we encountered.

    We are sending copies of this report to appropriate congressional
    committees, the Secretary of Labor, and the Assistant Secretaries of Labor
    for Employment Standards and Occupational Safety and Health. We will also
    make copies available to others upon request. In addition, the report will
    be available at no charge on GAO*s Web site at http:// www. gao. gov.

    Page 28 GAO- 02- 925 Protections for Day Laborers

    Please contact me or Lori Rectanus on (202) 512- 7215 if you or your staff
    have any questions about this report. Other contacts and staff
    acknowledgments are listed in appendix VI.

    Sincerely yours, Robert E. Robertson Director, Education, Workforce, and

    Income Security Issues

    Appendix I: Identification and Selection of Agencies Serving Day Laborers

    Page 29 GAO- 02- 925 Protections for Day Laborers

    To determine what is known about the size and nature of the day laborer
    workforce in the United States, we initially examined demographic data on
    day laborers from the Bureau of Labor Statistics* Current Population
    Survey Contingent Work Supplement. Although this information is collected
    directly from individuals working as day laborers, it lacked detailed data
    about the characteristics of day laborers and their work that were
    necessary to address this objective, such as the number of hours or days
    worked, means of transportation used to get to job sites, and frequency
    and method of payment for work completed. Moreover, data available from
    other studies and reports focused on day laborers in certain geographic
    locations. As a result, we collected supplemental information through
    structured interviews from agencies that work with day laborers.

    We identified two types of agencies that assist day laborers. One type
    consists of nonprofit and local government agencies that work with day
    laborers seeking employment on street corners. The second type includes
    temporary staffing agencies that employ day laborers.

    Given the lack of a national directory of agencies that work with day
    laborers, to identify as many agencies as possible, we interviewed
    experts; visited local agencies in the Washington, D. C., metropolitan
    area; and reviewed research studies and reports identified by experts, a
    literature review, and the Internet. We sought to obtain the broadest
    ethnic and geographic representation possible. We found that the majority
    of the agencies on our list were Hispanic- based groups, which may have
    some effect on our findings regarding the ethnicity of day laborers. We
    observed and were told of day laborers of other ethnic backgrounds, such
    as Asians in New York, and Polish and other eastern European groups in
    Chicago, but few, if any of the organizations on our list focused solely
    on serving these groups. We ultimately identified 84 agencies representing
    14 states; the overwhelming majority of the agencies (61) were located in
    California, with Texas having the next highest number (4).

    To identify temporary staffing agencies, we started with a list of 11
    firms identified by the American Federation of Labor- Congress of
    Industrial Organizations (AFL- CIO) as the primary employers of blue-
    collar workers in the United States. The American Staffing Association, an
    organization that represents temporary staffing agencies, confirmed that
    these were the major employers of skilled and/ or unskilled blue- collar
    workers. Appendix I: Identification and Selection of

    Agencies Serving Day Laborers Identifying Agencies Serving Day Laborers

    Appendix I: Identification and Selection of Agencies Serving Day Laborers

    Page 30 GAO- 02- 925 Protections for Day Laborers

    To identify nonprofit and local government agencies for our structured
    interviews, we chose one agency from each of the 14 states represented on
    the list of 84 and added 4 agencies each from California, Illinois, New
    York, and Virginia to interview during our site visits. We also added 1
    agency each from California and Texas because they represented the largest
    number of agencies on our list. In total, we selected 20 nonprofit and
    local government agencies and all 11 temporary staffing agencies we
    initially identified.

    From February to June 2002, we contacted the 31 nonprofit, local
    government or temporary staffing agencies (20 nonprofit or local
    government and 11 temporary staffing agencies). We asked these agencies
    about (1) the characteristics of the day laborer workforce, such as race,
    age, and education; (2) types of work day laborers typically perform; (3)
    working conditions that day laborers face in the areas of wages, safety,
    and health; and (4) litigation concerning federal wage, safety and health
    provisions that involved day laborers. We did not independently verify the
    information provided by the agencies.

    Three of the 20 nonprofit and local government agencies we interviewed
    worked with day laborers employed by temporary staffing agencies. We
    included their results with the 11 temporary staffing agencies* for a
    total of 14. Three temporary staffing agencies declined to participate and
    3 others did not employ day laborers as we defined them, leaving a final
    total of 8. As a result, the information in this report represents 17
    nonprofit and local government agencies and 8 temporary staffing agencies
    in which 3 street agencies were re- categorized as temporary staffing
    agencies. (See table 3.) Selecting Agencies

    Serving Day Laborers Delivery of Structured Interviews

    Appendix I: Identification and Selection of Agencies Serving Day Laborers

    Page 31 GAO- 02- 925 Protections for Day Laborers

    Table 1: Agencies Participating in Structured Interviews Agency name
    Location Nonprofit and local government agencies

    Coalition for Humane Immigrant Rights of Los Angeles California San Diego
    County Jobs for Progress California San Francisco Day Laborer Program
    California American Friends Service Committee Colorado Roswell
    Intercultural Alliance Georgia Latin Union of Chicago Illinois CASA of
    Maryland Maryland Wind of the Spirit Immigrant Resource Center New Jersey
    Latin American Workers Project New York Workplace Project New York
    Association of Latino Workers of North Carolina North

    Carolina VOZ: Workers* Rights Education Project Oregon Denton Humanitarian
    Association Texas Oscar Romero Workers* Center Texas Culmore Family
    Resource Center Virginia Shirlington Employment and Education Center
    Virginia CASA Latina Washington

    Temporary staffing agencies

    Adecco a Chicago Coalition for the Homeless b Illinois Day Laborers*
    Organizing Committee b Ohio Labor Connection a Labor Finders International
    a Labor Ready a Primavera Works b Arizona Tandem Staffing Solutions a a
    These temporary staffing agencies have offices in locations nationwide or
    in certain regions of the United States. b The responses we received from
    these agencies related to day laborers working for temporary

    staffing agencies. Source: GAO.

    Appendix II: Services Provided to Day Laborers by Selected Nonprofit
    Agencies

    Page 32 GAO- 02- 925 Protections for Day Laborers

    As part of our efforts to identify what was known about the nature and
    size of the day laborer workforce, we conducted on- site visits with one
    nonprofit agency that works with day laborers in each of the four states
    we visited. During these visits, we obtained information on the
    characteristics of the day laborer workforce, as well as how these
    agencies broker employment for day laborers and work to improve day
    laborers* working conditions.

    The four nonprofit agencies we visited seek to improve the welfare of a
    population broader than day laborers, to include low- income workers, the
    homeless, and local citizens. All of the agencies provide information to
    workers to educate them about their rights in the workplace. They also
    help day laborers obtain employment and provide them with a range of
    social services, from teaching English and offering classes on childcare
    to providing medical screenings. At one of the locations of the Coalition
    for Humane Immigration Rights of Los Angeles (CHIRLA), day laborers can
    receive English classes from a local welfare agency representative while
    they wait to be assigned to a job. In some cases, these services are
    offered to workers who stay at the site after it closes. (See table 2 for
    a description of these agencies and the services they provide to day
    laborers.) In addition, the agencies provide legal support by referring
    workers for legal assistance or litigating cases themselves on behalf of
    workers.

    Table 2: Description of Agencies GAO Visited and the Services They Provide
    Agency/ location Purpose Services provided to day laborers

    Shirlington Employment and Education Center, Arlington, Va. Provides
    employment and training

    services to individuals in the community.

     Provides services, such as classes in English and computers.

     Brokers employment. Coalition for Humane Immigration Rights of Los
    Angeles, Los Angeles, Calif. Organizes workers and provides social

    services to improve the overall welfare of low- income workers.

     Provides services, such as English and literacy classes.

     Litigates cases.

     Brokers employment. Chicago Coalition for the Homeless, Chicago, Ill.
    Seeks to empower homeless individuals.  Organizes day laborers to address

    grievances. Latin American Workers* Project, New York, N. Y. Provides
    outreach and education to

    workers to help them organize.

     Offers English classes.

     Litigates cases.

     Brokers employment. Source: Shirlington Employment and Education Center,
    Coalition for Humane Immigration Rights of Los Angeles, Chicago Coalition
    for the Homeless, and Latin American Workers* Project.

    Appendix II: Services Provided to Day Laborers by Selected Nonprofit
    Agencies

    Description of Nonprofit Agencies Visited

    Appendix II: Services Provided to Day Laborers by Selected Nonprofit
    Agencies

    Page 33 GAO- 02- 925 Protections for Day Laborers

    Several of these agencies began to serve day laborers because local
    communities were increasingly displeased at seeing day laborers
    congregating on street corners or at convenience or home warehouse stores.
    1 Local citizens reported that they feared for their safety or they feared
    that congregating could affect local commerce. Advocates for day laborers
    feared for the safety and welfare of day laborers* either they were being
    injured as a result of running into traffic to respond to employers*
    solicitations for work or they were complaining about not receiving
    promised wages or adequate working conditions. Local groups* including
    social welfare agencies, worker advocates, local government, and police*
    often worked together to develop and fund solutions to connect day
    laborers and employers.

    Toward that end, three of the four organizations worked with local groups
    to build or identify locations that could be used to broker employment
    between day laborers and employers. (Chicago*s Coalition for the Homeless
    does not broker employment.) The Shirlington Center has a building where
    day laborers wait for work. The Latin American Workers* Project operates
    two sites in New York: one in the basement of a church and the other on a
    parking lot along the banks of the Atlantic Ocean. A tent was recently
    donated to the latter site to provide shelter. CHIRLA operates three sites
    around the Los Angeles area that are also located in parking lots. 2 The
    agencies publicize these new locations to employers and encourage them to
    use these sites to find workers. In one location, police will ticket
    employers or day laborers who use street corners. However, some day
    laborers refuse to use these sites, believing that their employment
    opportunities are better at unorganized sites. It is hard to reach all day
    laborers and unorganized sites continue to exist. For example, New York
    officials identified 26 unorganized sites around New York City, while
    CHIRLA representatives identified about 150 unorganized sites in Los
    Angeles County.

    The agencies established procedures at these job sites to facilitate the
    brokering of employment. These procedures were often developed with the
    input of day laborers and typically require that they provide basic

    1 Representatives from all of these agencies said that many local
    communities continue to make efforts to pass anti- loitering ordinances in
    an effort to prevent day laborers from gathering at street corners. In at
    least three states* Virginia, California, and Illinois* those ordinances
    or efforts have been struck down by the courts.

    2 CHIRLA provides mediation and other services for six unorganized
    corners.

    Appendix II: Services Provided to Day Laborers by Selected Nonprofit
    Agencies

    Page 34 GAO- 02- 925 Protections for Day Laborers

    information, such as their name, address, and telephone number and abide
    by certain rules. For example, day laborers at one agency must do some
    community work to *pay off* the services provided by the agency. At two
    agencies, employers who participate must also provide information,
    including their name, address, telephone number, and license plate number.
    One agency, however, does not request such information, fearing that those
    requirements may scare away employers.

    When the day laborers arrive at the site around 6 a. m., they sign in,
    listing their name, skills, and level of English proficiency. When
    employers arrive seeking a worker for a particular job, a representative
    of the agency will select a worker*s name from the list or pick a name
    through a lottery system. Employers may request certain workers, for
    example, one that has a certain skill or speaks English. The agencies let
    the day laborers negotiate wages with employers. However, one agency
    established a certain minimum wage that employers must pay. At several
    sites, the day laborers have informally agreed among themselves on a
    minimum hourly wage and will not go below it.

    All the agencies help day laborers remedy workplace problems involving
    wages or safety and health. To resolve the problem, they first contact the
    employer directly. In some cases, it works well; but in other cases, some
    day laborers do not have information about the employer, such as a
    telephone number or address, making it difficult to pursue. To address
    this problem, CHIRLA and the Latin American Workers* Project have begun to
    provide books and cards to the day laborers where they can track the hours
    they work, the locations where they have worked (to help assert individual
    coverage under FLSA), and other information that will help identify the
    employer.

    If the problem is not resolved by dealing directly with the employer, the
    agencies may conduct a community action to push the employer to resolve
    the issue. For example, one agency organized a protest in front of the
    employer*s premises. Other strategies include picketing the employer*s
    work or home and seeking media attention. The agencies also help workers
    file complaints with state or federal agencies, or in small claims court.
    However, the agencies reported that most workers are reluctant to do so.

    If the problem persists, the agencies may litigate cases on behalf of day
    laborers (to recover unpaid wages or obtain workers* compensation for a
    work- related injury, for instance), provide legal advice, or refer cases
    to Resolving Potential

    Violations Involving Day Laborers

    Appendix II: Services Provided to Day Laborers by Selected Nonprofit
    Agencies

    Page 35 GAO- 02- 925 Protections for Day Laborers

    local or state legal agencies for litigation. All four agencies partner
    with private law firms or local, state, or federal agencies that can also
    litigate cases. The Latin American Workers* Project, for example, refers
    cases to the Puerto Rican Legal Defense Fund or the New York State
    Attorney General.

    As a result of these efforts, these four agencies reported that,
    collectively, they retrieved over $280,000 in wages owed to workers in
    2001. In addition, two agencies reported a significant reduction in the
    number of complaints regarding wages, safety, and health.

    Appendix III: Selected Features of FLSA and Requirements in Four States

    Page 36 GAO- 02- 925 Protections for Day Laborers

    This table compares selected features of FLSA with state wage laws,
    regulations, and administrative orders in the 4 states we visited. It
    highlights only those provisions that are most applicable to day laborers.
    State requirements play an important role in supplementing FLSA*s
    protections because states may enact more stringent provisions. This means
    that a state could cover employers and individuals not covered under FLSA.
    If an employer is covered under FLSA and a state requirement, the more
    stringent provision will generally apply. We supplemented this table with
    information provided by state officials.

    Provisions FLSA California Illinois New York Virginia

    General coverage All individuals employed by

     employers earning $500,000+ annually in sales, and employees engaged in
    interstate commerce, or in the production of goods for commerce;

     employers earning less than $500,000 and individual is engaged in
    interstate commerce, or in the production of goods for commerce, or
    closely related and directly essential to interstate commerce; or

     homeowners performing domestic services, such as house cleaning or
    gardening for 8+ hours a week or earning at least $1,300 in 2002.

    Individuals employed by an employer, including homeowner, with certain
    exceptions.

    Individuals employed by an employer, with certain exceptions.

    Individuals employed by an employer, including homeowners, with certain
    exceptions.

    Individuals employed by an employer, with certain exceptions.

    Exclusions most relevant to day laborers

    Individuals working for companies earning less than $500,000 and employees
    are not engaged in interstate commerce.

    None Workers

     employed by employers with fewer than four employees or

     employed by a homeowner performing domestic service in a private home.

    None Workers

     employed by employers with fewer than four employees;

     employed by a homeowner performing domestic service in a private home;
    or

     covered by FLSA.

    Appendix III: Selected Features of FLSA and Requirements in Four States

    Appendix III: Selected Features of FLSA and Requirements in Four States

    Page 37 GAO- 02- 925 Protections for Day Laborers

    Provisions FLSA California Illinois New York Virginia

    Wages Minimum wage: $5.15/ hour. Established rate

    of pay but no lower than $6.75/ hour.

    Established rate of pay but no lower than $5.15/ hour.

    Established rate of pay but no lower than $5.15/ hour.

    Established rate of pay but no lower than $5.15/ hour.

    Overtime For over 40 hours in any workweek, workers earn 1-  1/2 times the
    regular rate of pay.

    Same as federal law.

    Daily overtime: workers earn 1- 1/2 times the regular rate of pay for
    every hour worked over 8 hours in 1 day and double the regular rate every
    hour worked after 12 hours in 1 day.

    Same as federal law. Same as federal law. None Deductions most relevant to
    day laborers

    Can deduct items considered to be an employee benefit, even if it brings
    workers below the minimum wage, such as meals, lodging; must be at the
    actual cost.

    Can deduct for check cashing or transportation if the services are
    voluntary and considered to be an employee benefit.

    Can deduct items considered to be for an employer*s benefit, such as
    transportation and uniforms, but deductions cannot bring wages below the
    minimum.

    Employees must provide written authorization for deductions.

    Can deduct items that take workers below the minimum wage, such as meals,
    but the law sets a cap.

    Cannot deduct for personal protective equipment. Employers must provide
    itemized statement of deductions at time of payment.

    Can deduct the reasonable cost of meals and lodging, if it is for the
    employee*s benefit, even if it brings workers below the minimum wage.

    Can deduct for transportation, but not if it brings wages below the
    minimum.

    Can deduct the reasonable cost of uniforms and equipment with employee*s
    written consent, but not if it brings wages below the minimum.

    Employers must provide itemized statement of deductions at time of
    payment.

    Can deduct charges for items considered an employee benefit, such as meals
    and lodging, even if it brings worker below the minimum wage; the state
    sets caps for these items. a

    Allowances for uniforms are added to not deducted from wages.

    Cannot deduct charges for transportation or personal protective equipment.
    Employers must provide itemized statement of deductions at time of
    payment.

    No deductions allowed without written and signed employee authorization.

    Requires written statement of deductions upon request.

    Appendix III: Selected Features of FLSA and Requirements in Four States

    Page 38 GAO- 02- 925 Protections for Day Laborers

    Provisions FLSA California Illinois New York Virginia

    Recordkeeping Employers must keep payroll records.

    Only courts may assess a penalty for failure to keep payroll records.

    Employers, including homeowners, must keep payroll records.

    Penalty of $500 for failure to keep payroll records.

    Employers must keep payroll records.

    State enforcement agency currently not authorized to assess penalties for
    failure to keep records. b

    Employers, including homeowners, must keep payroll records.

    Penalty for failure to keep payroll records is up to $1,000 for a first
    violation, $1,000-$ 2, 000 for a second violation, and $2, 000-$ 3,000 for
    a third violation.

    None Other The Day Labor

    Services Act (DLSA) provides additional protections to day laborers
    employed by temporary staffing agencies. c Check cashing fees are
    prohibited, transportation fees are capped at 3% of daily wages, and other
    deductions, such as meals, uniforms, and equipment, must be at the actual
    cost or market value.

    DLSA also recommends that temporary staffing agencies hire people who
    speak languages that are generally used near day labor service agencies. a
    New York State law uses the term *allowances* to denote charges for items
    such as meals and

    lodging. For this table, however, we refer to these allowances as
    *deductions.* b According to state Labor officials, new legislation
    authorizing the state agency to assess penalties

    will take effect in 2003. c Although the act only covers *day labor
    service agencies,* for this table, we are referring to them as

    temporary. Source: GAO comparison of the Fair Labor Standards Act of 1938,
    with the pertinent state laws, requlations, and administrative orders of
    California, Illinois, New York and Virginia.

    Appendix IV: Comments from the Employment Standards Administration Page 39
    GAO- 02- 925 Protections for Day Laborers

    Appendix IV: Comments from the Employment Standards Administration

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    See comment 2. See comment 1.

    Appendix IV: Comments from the Employment Standards Administration Page 40
    GAO- 02- 925 Protections for Day Laborers

    See comment 3. See comment 3.

    Appendix IV: Comments from the Employment Standards Administration Page 41
    GAO- 02- 925 Protections for Day Laborers

    Appendix IV: Comments from the Employment Standards Administration Page 42
    GAO- 02- 925 Protections for Day Laborers

    1. We clarified the paragraph that discusses WHD*s Spanish- speaking staff
    to indicate that WHD has about one- quarter of its staff that speak
    Spanish.

    2. See discussion in Agency Comments section of report. 3. We modified the
    report*s language as suggested. GAO Comments

    Appendix V: Comments from the Occupational Safety and Health
    Administration Page 43 GAO- 02- 925 Protections for Day Laborers

    Appendix V: Comments from the Occupational Safety and Health
    Administration

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    Appendix V: Comments from the Occupational Safety and Health
    Administration Page 44 GAO- 02- 925 Protections for Day Laborers

    Appendix V: Comments from the Occupational Safety and Health
    Administration Page 45 GAO- 02- 925 Protections for Day Laborers

    See comment 1.

    Appendix V: Comments from the Occupational Safety and Health
    Administration Page 46 GAO- 02- 925 Protections for Day Laborers

    See comment 1. See comment 2.

    Appendix V: Comments from the Occupational Safety and Health
    Administration

    Page 47 GAO- 02- 925 Protections for Day Laborers

    1. See discussion in Agency Comments section of report. 2. We do not
    disagree with the number of investigations that OSHA*s

    cites in its comments. The data OSHA cites in support of increasing number
    of investigations include those conducted by telephone and fax. As a
    result, these numbers do not necessarily indicate increases in worksite
    visits. GAO Comments

    Appendix VI: GAO Contacts and Staff Acknowledgments

    Page 48 GAO- 02- 925 Protections for Day Laborers

    Lori Rectanus, (202) 512- 9847 Monika Gomez, (202) 512- 9062

    Ronni Schwartz made significant contributions to this report, in all
    aspects of the work throughout the review. In addition, Lisa Lim and Torey
    Silloway assisted in gathering and analyzing information collected on our
    site visits; H. Brandon Haller helped develop our data collection
    instrument and our overall design and methodology; Julian Klazkin provided
    legal support; and Patrick DiBattista assisted in report and message
    development. Appendix VI: GAO Contacts and Staff

    Acknowledgments GAO Contacts Staff Acknowledgments

    (130095)

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