Fair Labor Standards Act: Better Use of Available Resources and  
Consistent Reporting Could Improve Compliance (15-JUL-08,	 
GAO-08-962T).							 
                                                                 
Over 130 million workers are protected from substandard wages and
working conditions by the Fair Labor Standards Act (FLSA). This  
act contains specific provisions to ensure that workers are paid 
the federal minimum wage and for overtime, and that youth are	 
protected from working too many hours and from hazardous	 
conditions. The Department of Labor's Wage and Hour Division	 
(WHD) is responsible for enforcing employer compliance with FLSA.
To secure compliance, WHD uses enforcement actions, partnerships 
with external groups, and outreach activities. In response to a  
congressional request, we examined (1) the trends in FLSA	 
compliance activities from fiscal years 1997 to 2007, (2) the	 
effectiveness of WHD's efforts to plan and conduct these	 
activities, and (3) the extent to which these activities have	 
improved FLSA compliance.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-962T					        
    ACCNO:   A82862						        
  TITLE:     Fair Labor Standards Act: Better Use of Available	      
Resources and Consistent Reporting Could Improve Compliance	 
     DATE:   07/15/2008 
  SUBJECT:   Accountability					 
	     Data collection					 
	     Data integrity					 
	     Employee rights					 
	     Employees						 
	     Fair employment programs				 
	     Federal regulations				 
	     Internal controls					 
	     Investigations by federal agencies 		 
	     Minimum wage rates 				 
	     Noncompliance					 
	     Performance measures				 
	     Reporting requirements				 
	     Strategic planning 				 
	     Wage surveys					 
	     Standards						 
	     Standards evaluation				 
	     Program goals or objectives			 

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GAO-08-962T

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Testimony: 

Before the Committee on Education and Labor, House of Representatives: 

United States Government Accountability Office: 
GAO: 

For Release on Delivery:
Expected at 10:30 a.m. EDT:
Tuesday, July 15, 2008: 

Fair Labor Standards Act: 

Better Use of Available Resources and Consistent Reporting Could 
Improve Compliance: 

Statement of Anne-Marie Lasowski, Acting Director: Education, 
Workforce, and Income Security: 

GAO-08-962T: 

GAO Highlights: 

Highlights of GAO-08-962T, a testimony to the Chairman, Committee on 
Education and Labor, House of Representatives. 

Why GAO Did This Study: 

Over 130 million workers are protected from substandard wages and 
working conditions by the Fair Labor Standards Act (FLSA). This act 
contains specific provisions to ensure that workers are paid the 
federal minimum wage and for overtime, and that youth are protected 
from working too many hours and from hazardous conditions. The 
Department of Laborï¿½s Wage and Hour Division (WHD) is responsible for 
enforcing employer compliance with FLSA. 

To secure compliance, WHD uses enforcement actions, partnerships with 
external groups, and outreach activities. 

In response to a congressional request, we examined (1) the trends in 
FLSA compliance activities from fiscal years 1997 to 2007, (2) the 
effectiveness of WHDï¿½s efforts to plan and conduct these activities, 
and (3) the extent to which these activities have improved FLSA 
compliance. 

What GAO Found: 

From fiscal years 1997 to 2007, the number of WHDï¿½s enforcement actions 
decreased by more than a third, from approximately 47,000 in 1997 to 
just under 30,000 in 2007. According to WHD, the total number of 
actions decreased over this period because of three factors: the 
increased use of more time-consuming comprehensive investigations, a 
decrease in the number of investigators, and screening of complaints to 
eliminate those that may not result in violations. Most of these 
actions (72 percent) were initiated from 1997 to 2007 in response to 
complaints from workers. The remaining enforcement actions, which were 
initiated by WHD, were concentrated in four industry groups: 
agriculture, accommodation and food services, manufacturing, and health 
care and social services. WHDï¿½s other two types of compliance 
activitiesï¿½partnerships and outreachï¿½constituted about 19 percent of 
WHDï¿½s staff time based on available data from 2000 to 2007. 

WHD did not effectively take advantage of available information and 
tools in planning and conducting its compliance activities. In planning 
these activities, WHD did not use available information, including key 
data on complaints and input from external groups such as employer and 
worker advocacy organizations, to inform its planning process. Also, in 
targeting businesses for investigation, WHD focused on the same 
industries from 1997 to 2007 despite information from its commissioned 
studies on low wage industries in which FLSA violations are likely to 
occur. As a result, WHD may not be addressing the needs of workers most 
vulnerable to FLSA violations. Finally, the agency does not 
sufficiently leverage its existing tools, such as tracking the use and 
collection of penalties and back wages, or using its hotlines and 
partnerships, to encourage employers to comply with FLSA and reach 
potential complainants. 

The extent to which WHDï¿½s activities have improved FLSA compliance is 
unknown because WHD frequently changes both how it measures and how it 
reports on its performance. When agencies provide trend data in their 
performance reports, decision makers can compare current and past 
progress in meeting long-term goals. While WHDï¿½s long-term goals and 
strategies generally remained the same from 1997 to 2007, WHD often 
changed how it measured its progress, keeping about 90 percent of its 
measures for 2 years or less. Moreover, WHD established a total of 131 
performance measures throughout this period, but reported on 6 of these 
measures for more than 1 year. This lack of consistent information on 
WHDï¿½s progress in meeting its goals makes it difficult to assess how 
well WHDï¿½s efforts are improving compliance with FLSA. 

What GAO Recommends: 

To better plan and conduct FLSA compliance activities, GAO recommends 
that WHD evaluate complaint data, obtain and use input from external 
stakeholders, incorporate data from its studies, and leverage existing 
tools. GAO also recommends that WHD establish, consistently maintain, 
and report on its performance. 

GAO provided a draft of this statement to WHD but it declined to 
officially comment prior to the hearing. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-962T]. For more 
information, contact Anne-Marie Lasowski at (202) 512-7215 or 
[email protected]. 

[End of section] 

Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss the Department of Labor's 
(Labor) Wage and Hour Division's (WHD) efforts to enforce compliance 
with the Fair Labor Standards Act (FLSA), as amended, which protects 
over 130 million eligible workers from substandard wages and working 
conditions.[Footnote 1] The act contains specific provisions designed 
to ensure that workers are paid at least the federal minimum wage and 
for overtime, and that youth are protected from working too many hours 
and from hazardous conditions. 

In response to your request, we examined WHD's efforts from fiscal 
years 1997 to 2007 to ensure compliance with FLSA's provisions for 
minimum wage, overtime, and child labor. Accordingly, this statement 
provides information on (1) the trends in WHD's compliance activities 
from fiscal years 1997 to 2007; (2) the effectiveness of WHD's efforts 
to plan and conduct these activities; and (3) the extent to which WHD's 
activities have improved FLSA compliance over this period. 

To address these objectives, we obtained and analyzed data from WHD's 
Wage and Hour Investigator Support and Reporting Database (WHISARD) on 
enforcement actions, back wages, penalties, partnerships, and outreach 
activities from fiscal years 1997 to 2007, as available.[Footnote 2] 
All data we reported were assessed for reliability and determined to be 
sufficiently reliable for the purposes of this statement. We also 
analyzed annual performance plans and reports in light of GAO's work 
and guidance on strategic planning and performance management for 
regulatory agencies, and examined performance assessments conducted by 
outside experts at WHD's request. In addition, we reviewed relevant 
federal laws and regulations. Finally, we interviewed WHD officials at 
the national and regional level, and external organizations 
representing employers and employees affected by WHD's compliance 
activities and visited WHD and state offices in California, Georgia, 
New Hampshire, Texas, and Wisconsin. We conducted this performance 
audit from August 2007 through July 2008 in accordance with generally 
accepted government auditing standards. Those standards require that we 
plan and perform the audit to obtain sufficient, appropriate evidence 
to provide a reasonable basis for our findings and conclusions based on 
our audit objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. For more information on our scope and methodology, see 
attachment I. 

Summary: 

From 1997 to 2007, the number of WHD's enforcement actions decreased by 
more than a third, from approximately 47,000 in 1997 to just under 
30,000 in 2007. WHD's two other compliance activities--partnerships and 
outreach activities--constituted about 19 percent of the agency's staff 
time, based on available data from 2000 to 2007. In planning and 
conducting its compliance activities, WHD did not effectively take 
advantage of available information and tools. Specifically, WHD did not 
use information, including data on complaints and input from external 
groups, such as employer and worker advocacy organizations, to inform 
its planning efforts. Also, in targeting employers for investigation, 
WHD focused on the same industries from 1997 to 2007 despite 
information from its commissioned studies on low wage industries in 
which FLSA violations are likely to occur. As a result, WHD may not be 
addressing the needs of workers most vulnerable to FLSA violations. In 
addition, the agency does not sufficiently leverage existing tools, 
such as its partnerships, to encourage employers to comply with FLSA 
and reach potential complainants. The extent to which WHD's activities 
have improved FLSA compliance is unknown, because the agency frequently 
changes both how it measures and how it reports on its performance. 
While WHD's long-term goals and strategies have generally remained the 
same since 1997, WHD often changed how it measured its progress, 
keeping about 90 percent of its measures for 2 years or less. Moreover, 
although WHD established a total of 131 performance measures throughout 
the period from 1997 to 2007, it reported on 6 of these measures for 
more than 1 year. This lack of consistent information on WHD's progress 
in meeting its goals makes it difficult to assess how well its efforts 
are improving compliance with FLSA. 

To better plan and conduct its FLSA compliance activities, we are 
recommending that WHD evaluate complaint data, obtain and use input 
from external stakeholders, incorporate data from its commissioned 
studies, and leverage existing tools. We are also recommending that WHD 
establish, consistently maintain, and report on its performance 
measures. We met with WHD officials to discuss our findings and 
recommendations and incorporated their comments as appropriate. We also 
provided a copy of our draft statement to WHD, but the agency declined 
to comment prior to the hearing. 

Background: 

Since FLSA was enacted, Congress has amended it several times, 
including recently increasing the federal minimum wage from $5.15 an 
hour, which it has been since September 1997, to $7.25 an hour in three 
steps over a 2-year period ending in July 2009. In 2007, about 2 
million workers were earning at or below the federal minimum wage. 
[Footnote 3] FLSA also limits the normal work week to 40 hours and 
requires that most employers pay 1ï¿½ times normal wages, or overtime 
pay, to eligible employees who work longer hours.[Footnote 4] 
Furthermore, FLSA and its regulations limit the types of jobs, number 
of hours, times of day, and types of equipment that youth can work. 
[Footnote 5] 

WHD's headquarters office, 5 regional offices, and 74 district and 
field offices with approximately 730 investigative staff are 
responsible for enforcing employer compliance with labor laws. In 2007, 
WHD's budget was approximately $165 million. 

WHD conducts several types of enforcement actions, ranging from 
comprehensive investigations covering all laws under the agency's 
jurisdiction to conciliations, a quick remediation process generally 
limited to a single alleged FLSA violation--such as a missed paycheck 
for a single worker, in which a WHD investigator contacts the employer 
by phone to try to resolve a complaint received from a worker.[Footnote 
6] 

WHD also initiates enforcement actions in an effort to target employers 
likely to violate FLSA. For many years, WHD officials have considered 
low wage workers to be most vulnerable to FLSA violations. In 2007, 
about 54 million workers were among this population.[Footnote 7] 
Furthermore, WHD officials, researchers, and employee advocates have 
expressed concerns that foreign born workers, although generally 
protected by FLSA to the same extent as other workers, may be less 
likely than others to complain because they may be unaware of federal 
laws or fear deportation if they are undocumented. About 19 percent of 
low wage workers, as defined by researchers in studies commissioned by 
WHD, were foreign born in 2007.[Footnote 8] 

When WHD finds violations during enforcement actions, it computes and 
attempts to collect back wages owed to workers and, where permitted by 
law, imposes penalties and other remedies.[Footnote 9] Other remedies 
pertaining to FLSA include the hot goods provision, which allows WHD to 
seize goods created in violation of FLSA, and liquidated damages, which 
permit workers to receive additional damages as a result of minimum 
wage or overtime violations. If employers refuse to pay the back wages 
and/or penalties assessed, WHD officials, with the assistance of 
attorneys from Labor's Office of the Solicitor, may pursue the cases in 
the courts. 

WHD's partnerships are formal written agreements with external groups-
-including states, foreign consulates, and employee and employer 
associations--designed to improve compliance.[Footnote 10] Its outreach 
activities include informational materials and seminars for employers 
and workers designed to improve public awareness of the provisions of 
FLSA. WHD holds seminars, provides training to employer associations, 
and distributes materials on FLSA provisions to employers and workers. 
In addition, as part of its outreach activities, WHD provides technical 
assistance to employers through its local offices, national hotline, 
and Web site. 

WHD, like other federal agencies, is required by the Government 
Performance and Results Act of 1993 (GPRA) to establish a framework to 
help align its activities with the agency's mission and goals. It is 
also required to develop long-term goals as well as establish 
performance measures to use in assessing the success of its efforts. 
Furthermore, to promote agency accountability, it is required to issue 
annual performance reports on its progress in meeting these goals. 

The Number of Enforcement Actions Has Decreased, although Enforcement 
Remained WHD's Major Compliance Activity: 

From 1997 to 2007, the number of WHD's enforcement actions decreased by 
more than a third, from approximately 47,000 actions in 1997 to just 
under 30,000 in 2007. According to WHD, although enforcement actions 
have comprised the majority of its compliance activities, the total 
number of actions decreased over this period because of three factors: 
the increased use of more time-consuming comprehensive investigations, 
a decrease in the number of investigators, and improved screening of 
complaints to eliminate those that may not result in violations. Most 
of these enforcement actions conducted from 1997 to 20007 were 
initiated by complaints from workers. The remaining enforcement 
actions, which were initiated by WHD, decreased 45 percent over the 
period, from approximately 13,000 in 1997 to approximately 7,000 in 
2007. WHD's partnerships and outreach activities constituted about 19 
percent of its total staff time. 

Total Number of Enforcement Actions Has Decreased: 

From 1997 to 2007, the total number of FLSA enforcement actions WHD 
conducted decreased, and lengthy, comprehensive investigations made up 
an increasingly larger share of this total. Of WHD's total resources, 
the majority was spent ensuring compliance with FLSA, which covers more 
workers than the other laws under WHD's jurisdiction.[Footnote 11] 
Based on available data from 2000 to 2007, the majority of staff time 
spent on FLSA compliance activities--81 percent--was spent on 
enforcement. However, the total number of enforcement actions, 
including investigations and conciliations, declined from approximately 
47,000 in 1997 to just under 30,000 in 2007, as shown in figure 1. 

Figure 1: Total Number of FLSA Enforcement Actions, 1997 to 2007: 

[See PDF for image] 

This figure is a line graph depicting the following data: 

Fiscal year: 1997; 
Number of enforcement actions: 46,758. 

Fiscal year: 1998; 
Number of enforcement actions: 51,643. 

Fiscal year: 1999; 
Number of enforcement actions: 48,405. 

Fiscal year: 2000; 
Number of enforcement actions: 40,251. 

Fiscal year: 2001; 
Number of enforcement actions: 32,987. 

Fiscal year: 2002; 
Number of enforcement actions: 34,424. 

Fiscal year: 2003; 
Number of enforcement actions: 34,929. 

Fiscal year: 2004; 
Number of enforcement actions: 34,331. 

Fiscal year: 2005; 
Number of enforcement actions: 32,083. 

Fiscal year: 2006; 
Number of enforcement actions: 30,003. 

Fiscal year: 2007;
Number of enforcement actions: 29,584. 

Source: GAO analysis of WHD data. 

[End of figure] 

In addition, WHD attributed the decrease in the number of enforcement 
actions to three factors. First, the proportion of comprehensive 
investigations, which require more staff time than other types of 
enforcement actions, increased over this period--from 39 percent of all 
enforcement actions in 2000 to 51 percent in 2007.[Footnote 12] Agency 
officials said that WHD emphasized comprehensive investigations in an 
effort to increase future compliance because they provide an 
opportunity for WHD to educate employers about the laws under its 
jurisdiction. Second, officials cited the decrease in the agency's 
investigative staff--and the loss of experienced investigators in 
particular--as reasons for this trend. As shown in figure 2, the number 
of investigators decreased over this period by more than 20 percent, 
from 942 in 1997 to 732 in 2007. Finally, a senior WHD official told us 
that the agency now screens out complaints that are not likely to 
result in FLSA violations more effectively than it did previously. 

Figure 2: Number of WHD Investigators, 1997 to 2007: 

[See PDF for image] 

This figure is a line graph depicting the following data: 

Fiscal year: 1997; 
Number of investigators at end of fiscal year: 942. 

Fiscal year: 1998; 
Number of investigators at end of fiscal year: 942. 

Fiscal year: 1999; 
Number of investigators at end of fiscal year: 938. 

Fiscal year: 2000; 
Number of investigators at end of fiscal year: 946. 

Fiscal year: 2001; 
Number of investigators at end of fiscal year: 945. 

Fiscal year: 2002; 
Number of investigators at end of fiscal year: 898. 

Fiscal year: 2003; 
Number of investigators at end of fiscal year: 850. 

Fiscal year: 2004; 
Number of investigators at end of fiscal year: 788. 

Fiscal year: 2005; 
Number of investigators at end of fiscal year: 773. 

Fiscal year: 2006; 
Number of investigators at end of fiscal year: 752. 

Fiscal year: 2007;
Number of investigators at end of fiscal year: 732. 

Source: GAO analysis of WHD data. 

[End of figure] 

WHD Responds to Most Complaints with Conciliations: 

The majority (72 percent) of WHD's enforcement actions were initiated 
in response to complaints from workers. From 2000 to 2007, more than 
half of these enforcement actions--approximately 52 percent--were 
conciliations, which WHD conducted over the phone.[Footnote 13] 
Conciliations were also the quickest type of enforcement action--taking 
2ï¿½ hours, on average, compared to nearly 35 hours, on average, for 
other types of enforcement actions. However, conciliations are 
generally limited to a complaint about a single violation involving 
only one worker. Although this enforcement action allows initial 
complaints to be quickly closed, a WHD-commissioned study found 
conciliations to be associated with an increased probability of 
detecting violations in subsequent investigations of a specific 
employer. Further information on complaints handled via conciliations 
can be found in a companion GAO testimony being released today for this 
hearing.[Footnote 14] Nearly all of the remaining enforcement actions 
initiated by complaints from workers were comprehensive investigations 
(38 percent) or limited investigations (7 percent). See figure 3 for 
the types of enforcement actions WHD conducted in response to 
complaints from 2000 through 2007. 

Figure 3: Enforcement Actions Used to Respond to Complaints, 2000 to 
2007: 

[See PDF for image] 

This figure is a pie-chart depicting the following data: 

Enforcement Actions Used to Respond to Complaints, 2000 to 2007: 
Conciliations: 52%; 
Comprehensive investigations: 38%; 
Limited investigations[A]: 7%; 
Other[B]: 3%. 

Source: GAO analysis of WHD data. 

[A] Limited investigations have a narrower scope than comprehensive 
investigations. For example, a limited investigation could focus on a 
particular employee or employees, a department at the employer's 
worksite, an employment practice, a particular time frame, one law 
under WHD's jurisdiction, or one section of FLSA. 

[B] Other enforcement actions include self-audits, in which employers 
conduct fact finding and resolve problems under WHD's supervision, and 
office audits, in which employers visit WHD and provide the records 
requested. 

[End of figure] 

WHD-Initiated Actions Have Decreased and Have Targeted the Same 
Industries: 

From 1997 to 2007, the number of WHD-initiated enforcement actions 
declined by 45 percent, as shown in figure 4. As a proportion of all 
enforcement actions, those initiated by WHD decreased slightly over the 
period, from 28 percent of all actions in 1997 to 24 percent in 2007. 

Figure 4: WHD-initiated Enforcement Actions, 1997 to 2007: 

[See PDF for image] 

This figure is a line graph depicting the following data: 

Fiscal year: 1997; 
Number of enforcement actions: 13,121. 

Fiscal year: 1998; 
Number of enforcement actions: 16,262. 

Fiscal year: 1999; 
Number of enforcement actions: 16,502. 

Fiscal year: 2000; 
Number of enforcement actions: 11,619. 

Fiscal year: 2001; 
Number of enforcement actions: 10,283. 

Fiscal year: 2002; 
Number of enforcement actions: 9,052. 

Fiscal year: 2003; 
Number of enforcement actions: 10,000. 

Fiscal year: 2004; 
Number of enforcement actions: 8,651. 

Fiscal year: 2005; 
Number of enforcement actions: 7,754. 

Fiscal year: 2006; 
Number of enforcement actions: 7,209. 

Fiscal year: 2007;
Number of enforcement actions: 7,210. 

Source: GAO analysis of WHD data. 

[End of figure] 

From 2000 to 2007, in planning and conducting WHD-initiated enforcement 
actions, the agency primarily targeted four industry groups: 
agriculture, accommodation and food services, manufacturing, and health 
care and social services. [Footnote 15] These four industries generally 
coincide with those for which WHD had strategic initiatives for 
increasing compliance for several years: agriculture, restaurants, 
garment manufacturing, and health care. The agency conducted the 
largest proportion of WHD-initiated enforcement actions--22 percent-- 
in the accommodation and food services industry. However, at the same 
time, WHD increased its focus on the agriculture industry from 7 
percent of WHD-initiated enforcement actions in 2000 to 20 percent in 
2007. The majority of enforcement actions in the agriculture industry-
-82 percent--were initiated by WHD, while actions in all other 
industries were usually initiated as a result of complaints. 

The number of enforcement actions and the proportion of WHD-initiated 
enforcement actions varied among WHD's five regions. For example, WHD's 
Southeastern region conducted the largest number of enforcement 
actions--approximately 128,000 from 1997 to 2007. In contrast, the 
Western region conducted the fewest--approximately 44,000. In addition, 
because the Western region had a smaller workload of enforcement 
actions initiated by complaints, nearly half of its enforcement actions 
conducted from 1997 to 2007 were initiated by WHD, compared to only 14 
percent for the Southeastern region. Agency officials said that when 
states have no minimum wage or overtime standards, or weak enforcement 
of such laws, WHD regions in which those states are located have 
heavier complaint workloads. Across WHD's five regions, regions with a 
greater proportion of states with a minimum wage below the federal 
level[Footnote 16] also had a greater proportion of enforcement actions 
that were initiated by complaints. 

Total Amount of Back Wages Assessed by WHD Have Increased, but the Use 
of Penalties is Limited: 

In the majority of its enforcement actions--approximately 75 percent 
from 2000 to 2007--WHD found employers in violation of FLSA, and most 
of these violations were of the overtime provisions of FLSA. In 2007, 
for example, nearly 85 percent of the FLSA violations WHD found were 
related to overtime, while 14 percent were minimum wage violations, and 
2 percent were violations of FLSA's child labor provisions.[Footnote 
17] When violations were found, employers agreed to pay some amount of 
the back wages owed to their workers approximately 90 percent of the 
time.[Footnote 18] In addition, the total amount of back wages 
employers agreed to pay increased by 41 percent, from approximately 
$164 million in 2000 to about $230 million in 2007--the highest amount 
for this period.[Footnote 19] Furthermore, the average amount of back 
wages per enforcement action nearly doubled, increasing from 
approximately $5,400 per enforcement action in 2000 to $10,500 in 2007. 
In those cases in which employers agreed to pay, most (about 94 
percent) resulted in employers agreeing to pay the full amount they 
owed to workers. However, in 6 percent of the cases, employers agreed 
to pay less than the amount they owed--an average of 24 cents for each 
dollar owed. In addition, WHD could not provide us with data on the 
amount of back wages assessed that were collected because WHD does not 
track this information in their WHISARD database. 

In addition to assessing back wages from employers found to be in 
violation of FLSA, WHD may also assess penalties for repeated or 
willful violations, or for child labor violations, but the agency made 
limited use of these penalties from 2000 to 2007.[Footnote 20] WHD 
assessed penalties for 6 percent of the enforcement actions conducted 
during this period in which it found FLSA violations.[Footnote 21] This 
percentage increased to a peak of almost 9 percent in 2001, before 
falling steadily to under 5 percent in 2006. 

Partnerships and Outreach Activities Represent a Small Proportion of 
WHD's Workload: 

Partnerships and outreach represent a small proportion of WHD's 
compliance activities, constituting about 19 percent of all WHD staff 
time from 2000 to 2007.[Footnote 22] From 1999 to 2007, the agency 
established 78 formal partnerships, 67 of which were still in place as 
of March 2008.[Footnote 23] Its earlier partnerships were largely with 
state governments, while more recent partnerships were primarily with 
employer groups. Other partnerships included worker associations, 
foreign consulates, and other agencies within the federal government. 
Overall, there was limited growth in the number of partnerships that 
WHD established, with a peak of 15 in 2004. 

According to its partnership agreements, WHD sought to utilize 
partnerships in several ways to improve FLSA compliance. The most 
common partnership activity was education, which was specified in 94 
percent of partnership agreements. Education encompasses a number of 
activities, including WHD attendance at seminars and training sessions 
regarding wage and hour laws and the distribution of pamphlets and 
other educational materials to workers and employers. The second most 
common partnership activity was complaint referrals. More than half of 
the partnership agreement documents contained language that encouraged 
or provided guidelines for partners to refer relevant complaints to WHD 
and, in the case of other governmental partners such as state labor 
agencies, for WHD to refer cases to them. 

Other partnership activities included: 

* monitoring agreements, which provided guidelines for employers to use 
in monitoring themselves or their contractors for potential FLSA 
violations and reporting violations to WHD; 

* sharing of enforcement information, mainly used in partnerships with 
other federal or state enforcement agencies; and: 

* bilingual assistance, which included the distribution of educational 
materials in foreign languages and assistance with translation of wage 
and hour regulations. 

From 2000 to 2007, WHD conducted approximately 13,600 FLSA-related 
outreach activities such as seminars, exhibits, media appearances, and 
mailings.[Footnote 24] During this period, the percentage of staff time 
spent on outreach events decreased, from approximately 22 percent in 
2000 to 13 percent in 2007. From 2003 to 2007, the largest proportion 
of outreach events targeted employers, although more diverse audiences 
have been included in recent years. Over this period, employers were 
the intended audience for 46 percent of the outreach events WHD 
conducted. In contrast, workers were the intended audience for 14 
percent of events. However, over this period, WHD began to target more 
diverse groups of non employer groups, including schools, governmental 
agencies, and community-based organizations. 

WHD Does Not Effectively Use Available Information and Tools in 
Planning and Conducting Its Compliance Activities: 

In planning and conducting its compliance activities, WHD does not 
effectively use available information and tools. First, WHD does not 
use information, such as data on the number of complaints each office 
receives or the backlog of complaints for each office, or other 
information, such as input from external groups. This information could 
help the agency manage its workload and allocate its staff resources 
accordingly. Second, in targeting employers for investigation, WHD 
focused on employers in the same industries from 1997 to 2007, despite 
findings from its commissioned studies intended to help it focus on low 
wage industries in which FLSA violations are likely to occur. Finally, 
the agency may not sufficiently leverage existing tools such as 
hotlines and partnerships to improve compliance with FLSA. 

WHD Does Not Use Available Information to Inform Its Planning Efforts: 

In planning its FLSA compliance activities, WHD does not use the 
following information to focus its work: 

Information on complaints received from workers. WHD does not use key 
information regarding the complaints it receives from workers that 
could help the agency manage its workload. First, WHD does not have a 
consistent process for documenting the receipt of, or actions taken in 
response to, complaints. According to guidance on GPRA planning, 
understanding customers' needs, such the demand for WHD's services in 
response to complaints, is important to help ensure that an agency 
aligns its activities, processes, and resources to support its mission 
and help it achieve its goals.[Footnote 25] Although WHD's Field 
Operations Handbook provides guidelines for recording complaints, and 
there is a complaint intake screen in the agency's WHISARD database, 
the handbook also states that, even if a complaint indicates probable 
violations, it may be rejected by district office managers based on 
factors such as the office's workload or available travel funds. 
Therefore, WHD staff usually enter a complaint into the database only 
when it is likely to result in finding of violations. In addition, 
although one office we visited maintained separate logs of all 
complaints received, WHD does not require all complaints, including the 
actions taken, to be recorded. As a result, WHD does not have a 
complete picture of all of the complaints it receives and the agency 
cannot be held accountable for the actions it takes in response to 
complaints. 

Backlogs of complaints. Although the number of complaints each office 
receives greatly affects its workload and ability to initiate 
investigations, WHD does not have a consistent process for tracking 
information on complaint backlogs across its offices. For data to be 
useful to GPRA planning and an agency's decision making, they must be 
complete, accurate, and consistent. WHD officials told us that the 
agency's offices vary in how they track their backlogs of complaints. 
However, headquarters officials said that they do not track the 
regional or district offices' backlogs, nor do they know how they are 
measured. Therefore, WHD cannot consider these backlogs in its planning 
efforts, including its allocation of staff resources to its regional 
and district offices. 

Input from external groups such as employer and worker advocacy 
organizations with an interest in WHD's activities. In the past, WHD 
held meetings with external stakeholders--organizations with an 
interest in the agency's activities--at a national level, but more 
recently, the agency has relied on second-hand information from its 
district offices to identify the concerns of these groups. GAO has 
reported that it is important to involve external stakeholders in the 
planning process, such as developing goals and performance 
measures.[Footnote 26] Agencies that have involved these external 
groups report that this cooperation has allowed them to more 
effectively use their resources. According to agency headquarters 
officials, prior to 2000, WHD held meetings at a national level with 
external organizations such as industry groups, advocates, unions, and 
state officials. Around 2000, WHD began relying instead on its district 
office staff to gather input on external stakeholders' concerns and 
provide this information at WHD's annual planning meetings. However, 
these planning meetings are not held until after the agency's national 
and regional priorities are set, thereby limiting external stakeholder 
input in the early phases of the process. In addition, WHD headquarters 
officials said its district offices report input from external 
stakeholders as part of annual performance reports submitted to the 
regional offices. However, we found little evidence of stakeholder 
recommendations in WHD's planning and reporting documents. 

State labor regulations and levels of enforcement. In planning the 
allocation of staff to its regional offices, WHD does not consider 
information on state labor laws or the extent to which these laws are 
enforced for the states covered by the district offices in each region. 
According to GPRA guidance, understanding the external environment in 
which its offices operate should be a key part of WHD's strategic 
planning process.[Footnote 27] Because WHD offices in states with 
weaker labor laws or enforcement may receive more complaints, these 
factors may directly affect the workload of WHD's district offices. For 
example, according to WHD officials, because the state of Georgia does 
not conduct investigations of overtime or minimum wage violations, the 
Atlanta WHD district office has a heavy workload of complaints 
regarding these issues. Officials told us that WHD headquarters does 
not consider state laws or enforcement in making allocations of 
investigators to its regions, and that each region has been allocated 
approximately five investigators each year for the past few years. 

WHD Did Not Change How It Targets Its WHD-Initiated Investigations, 
despite Information from Its Studies of Low Wage Industries: 

From 1997 to 2007, in targeting employers for investigation, WHD 
focused on employers in the same industries despite obtaining 
information from its commissioned studies on low wage industries in 
which FLSA violations are likely to occur. During its annual planning 
process, the agency develops national and local initiatives that focus 
on selected industries in which it will conduct investigations. 
Individual employers within these industries are often selected for 
these WHD-initiated investigations in one of two ways. WHD either 
obtains a statistical sample of employers or selects them using the 
judgment of its staff--for example, by looking through a telephone 
directory of local businesses. 

Over this period, WHD considered low wage workers to be most vulnerable 
to FLSA violations, but it did not clearly define who these workers 
were or identify the industries in which they were concentrated until 
2004. Instead, according to WHD officials, the agency relied primarily 
on its historical enforcement data--the majority of which consisted of 
actions initiated by complaints--and observations from regional and 
district officials to focus its compliance activities. WHD centered its 
work on nine industries, and based many of its performance indicators 
on garment manufacturing, nursing homes, and agriculture. However, 
district officials told us that it was difficult to contribute to all 
of these national goals because few of WHD's offices are located in 
areas that have a substantial number of employers in the garment 
manufacturing industry to investigate. 

To ensure that all of its offices could contribute to its national 
goals, and that industries in which workers are less likely to complain 
were included in its plans, WHD changed its focus to include more low 
wage industries. In 2002, the agency commissioned a series of studies 
to define the population of low wage workers, and to determine in which 
industries these workers were most likely to experience minimum wage 
and overtime violations. Researchers used data from the Bureau of Labor 
Statistics to estimate how common and severe minimum wage and overtime 
violations were throughout all industries. They found that 33 
industries had a high potential for violations of the minimum wage and 
overtime provisions of FLSA, including 9 that ranked highest nationally 
for violation potential.[Footnote 28] However, since the completion of 
the studies in 2004, WHD has not used this information to substantially 
refocus its efforts or target its investigations. The proportion of WHD-
initiated investigations targeting these top 9 industries has risen by 
approximately 2 percent since 2004. Therefore, the investigations 
initiated by WHD may not have addressed the needs of low wage workers 
most vulnerable to FLSA violations. 

Local WHD officials also told us that despite the results of these 
studies, the focus of their investigations has not substantially 
changed. For example, the agriculture industry, which is not on the 
national list of 33 priority industries, was the focus of 16 percent of 
WHD-initiated investigations from 2005 to 2007. In addition, WHD 
headquarters officials told us that the agency cannot regularly measure 
its progress in improving compliance in the 33 industries because it 
does not have the resources needed to conduct the investigations it 
uses to evaluate whether compliance has improved. Finally, most 
district-level WHD officials told us they were not aware of the 
specifics of these commissioned studies. For example, at one WHD 
district office, the managers told us brief presentations on some of 
the studies were provided at management meetings, but copies of the 
full studies were not provided, and investigators we spoke with at this 
office said they were not aware of the studies and therefore could not 
incorporate the results of these studies into planning their work. 

WHD Does Not Sufficiently Leverage Existing Tools to Increase 
Compliance: 

WHD does not sufficiently leverage its existing tools to increase 
compliance. These include the following: 

Use of penalties for willful and repeat violations. WHD does not know 
the extent to which it has leveraged its statutory penalty authority 
because it does not track how often willful or repeat violations are 
found. WHD can assess penalties when employers willfully or repeatedly 
violate FLSA but WHD does not track how often it finds repeated or 
willful violations or when penalties are not assessed for such 
violations. In addition, a study commissioned by WHD showed that, when 
employers are assessed penalties, they are more likely to comply in the 
future and other employers in the same region--regardless of industry-
-are also more likely to comply. Although the agency has occasionally 
addressed the use of penalties in its performance plans--for example, 
by including a measure for increasing the use of penalties and other 
remedies in its 2007 plan-WHD managers did not emphasize the importance 
of these tools by including them in the agency's performance reports, 
which are used by external groups to hold the agency accountable. 
Furthermore, there was no quantifiable goal associated with the measure 
in the 2007 plan, and officials told us that it was intended only as a 
reminder to staff that penalties were one tool they could use to 
encourage compliance. 

Collection of back wages and penalties. WHD began collecting more data 
on its enforcement actions in 2000 with the introduction of its WHISARD 
database. However, the agency does not use information on whether back 
wages and penalties assessed are collected to determine whether it is 
fulfilling its mission of ensuring that workers receive the wages they 
are owed or verify that employers are being penalized for violating 
FLSA, respectively. WHD headquarters officials in charge of strategic 
planning told us they do not know whether back wages or penalties are 
collected from employers, although this information is tracked in its 
financial accounting systems. They also could not provide information 
on how long it takes the agency to collect back wages or penalties. 

Hotlines and office telephone lines. WHD is not fully utilizing its 
hotlines or its regular office telephone lines to reach potential 
complainants. WHD has set up some hotlines through partnerships, but 
these hotlines are not always effective. For example, one partnership 
set up a hotline targeted toward Latino workers and hosted by the 
Mexican Consulate. One member of the partnership said that she tested 
the hotline repeatedly over 6-month period but the phone was never 
answered. When we made test calls to this hotline asking about wage- 
related issues, staff either did not refer us to WHD or other 
government agencies or did not return our calls. Phone systems also 
vary among WHD's offices, and only some have the capacity to take 
messages outside of office hours, when workers with complaints may be 
more likely to call. For example, at one district office, we were told 
that they did not have an answering machine on which callers could 
leave messages after hours because they had no one to return these 
calls during the day. In addition, state officials and advocates said 
that some local WHD offices are not always available by phone to help 
callers with detailed questions. At one district office we visited, 
investigators said that calls went straight to a voice mail system, 
where callers were instructed to leave a message and wait for a return 
call from WHD staff. 

Partnerships. Although partnerships can help WHD leverage resources and 
reach potential complainants, some of WHD's partners, including state 
labor agency officials, told us that WHD does not always provide 
adequate support to its partnerships. First, some state officials said 
that WHD does not notify them of the status of complaints or of actions 
taken. For example, one state official told us about a case in which an 
employer violated state and federal labor laws, but WHD settled with 
the employer without consulting state officials. The state officials 
said they were unhappy with the settlement, mainly because it resulted 
in the employer paying less in back wages. Second, WHD has not allowed 
its investigators to take part in some joint investigations with state 
labor agencies or send investigators to events intended to help educate 
the worker community. Third, several of WHD's partners told us that the 
agency has not provided adequate financial support for outreach events, 
leaving the funding to nonprofit organizations. For example, WHD 
officials in Houston told us that, although one of its partnership's 
billboards advertising a hotline for Latino workers needed to be 
replaced, the office was unable to provide any funding to replace them 
because WHD headquarters had not approved the funds. In California, WHD 
officials told us they do not support expanding the agency's 
Employment, Education, and Outreach (EMPLEO) partnership--which 
received an award from Harvard University's Kennedy School of 
Government for successful innovation--to other areas of the state or 
hold certain outreach events because these efforts would generate more 
referrals than the agency could handle. 

The Extent to Which WHD's Activities Have Improved FLSA Compliance Is 
Unknown: 

The extent to which WHD's activities have improved FLSA compliance is 
unknown, because WHD frequently changes both how it measures and how it 
reports on its performance. When agencies provide trend data in their 
performance reports, decision makers can compare current and past 
progress in meeting long-term goals. While WHD's long-term goals and 
strategies have generally remained the same since 1997, WHD often 
changes how it measures its progress, keeping about 90 percent of its 
measures for 2 years or less. According to WHD officials, the agency 
decided to discontinue some of its measures either because they had 
been met or because WHD realized they were not appropriate. In 
addition, while WHD specified a number of performance measures each 
year in its planning documents, it included less than one-third of them 
in its annual performance reports. Moreover, although WHD established a 
total of 131 performance measures throughout the period from 1997 to 
2007, it reported on 6 of them for more than 1 year. This lack of 
consistent information on WHD's progress in meeting its goals makes it 
difficult to assess how well WHD's efforts are improving compliance 
with FLSA. 

Since the first time Labor was required to report on it performance in 
1999, WHD has included similar performance goals and strategies related 
to its FLSA compliance activities in its annual performance reports. 
For 1999 to 2006, WHD had the general outcome goal of increasing 
compliance with worker protection laws and, by 2002, also had a more 
program-specific goal of ensuring that American workplaces legally, 
fairly, and safely employed and compensated their workers. For 2007, 
the agency reported on the program-specific goal of ensuring workers 
received the wages due. Also, from 1999 to 2007, the agency reported on 
how it used its three types of compliance activities--enforcement, 
outreach, and partnerships--to reach its goals. 

While its goals and strategies did not change, WHD often changed how it 
measured its progress. From 1997 to 2007, WHD included 131 FLSA-related 
performance measures in its plans but kept about 90 percent of these 
for 2 years or less. A majority of these measures--67 percent--were 
reported for only 1 year. Furthermore, for most of the period from 1997 
to 2007, WHD had strategic initiatives for improving compliance in its 
targeted industries--agriculture, garment, and health care--as well as 
a strategic initiative designed to measure and reduce recidivism by re- 
investigating employers it had previously investigated and found in 
violation of FLSA. However, the agency also frequently changed how it 
measured progress in both of these areas. For example, although WHD had 
10 performance measures for improving compliance in agriculture from 
1997 to 2007, it kept only 1 of them for more than a year. These 
frequent changes to its performance measures have affected the ability 
of agency officials and outside observers to understand WHD's progress 
and for agency officials to make decisions for future strategic 
planning. In a recently issued study WHD commissioned to obtain 
recommendations for future performance measures for reducing 
recidivism, researchers found that they could not assess the agency's 
progress to date because of the frequent changes in its measures. 

According to WHD officials, the agency discontinued some of its 
performance measures because they had been met or were not appropriate. 
Specifically, WHD officials stated that during their annual planning 
process, they make ongoing refinements to their performance measures. 
Throughout the years, the agency has decided to discontinue measures 
for several reasons, including (1) the agency data it used to assess 
its progress in meeting the measure were not reliable; (2) agency staff 
did not understand how the measures related to their work; (3) staff 
did not believe the agency could influence the measure through its 
work; (4) the issue the measure was attempting to address was no longer 
relevant; and (5) the agency had met the targets for the measure 
repeatedly. For example, although growers typically rotate their crops 
annually, WHD's performance measures for the agriculture industry 
focused on compliance among growers of specific crops, such as lettuce 
and tomatoes. After 4 years of using various performance measures based 
on crops, WHD realized that because growers often change crops, this 
approach was not measuring compliance for the same group of growers 
over time and discontinued using these measures. 

In addition to frequently changing its performance measures, WHD does 
not report on many of the measures. While WHD specified a number of 
performance measures each year in its planning documents, it included 
less than one-third of them in its annual performance reports. Of the 
131 FLSA-related performance measures, WHD reported on 40 of them (29 
percent) in its annual performance reports. WHD officials attributed 
this lack of reporting to departmental space limitations in annual 
reports. 

Moreover, although WHD reported on 40 of its performance measures from 
1999 to 2007, it reported on only 6 of them for more than 1 year. The 
agency met 30 of its goals (75 percent) for the measures on which it 
reported, and meeting the goals was among the reasons WHD officials 
cited for discontinuing the use of some measures. However, nearly half 
of the measures WHD met were designed to establish baselines for 
understanding the current state of compliance or an agency process; 
they were not meant to measure agency progress. Overall, the lack of 
consistent reporting further complicates the ability of those within 
and outside the agency to assess how well WHD's efforts have improved 
compliance with FLSA. 

Conclusions: 

While WHD is responsible for protecting some of the basic rights of 
U.S. workers by enforcing FLSA, it does not know how effectively it is 
doing so. As with all government agencies, WHD must determine how to 
strategically manage its limited resources to help ensure the most 
efficient and effective outcomes. Although WHD has been challenged by 
reductions in its investigative staff, it has not used all available 
information to promote compliance, such as the studies in which it has 
invested that could inform how it targets employers for WHD-initiated 
investigations. In addition, it has not fully leveraged available 
tools, such as hotlines, office phone lines, and partnerships, that 
could extend its reach or tracked penalties and collection of back 
wages to know their impact on compliance. Furthermore, by not 
consistently measuring and reporting its progress in meeting the 
unchanging goal of ensuring FLSA compliance, the agency is unable to 
account for its progress more than a decade after GPRA implementation. 

Recommendations for Executive Action: 

To more effectively plan and conduct its compliance activities, we 
recommend that the Secretary of Labor direct the Administrator of WHD 
to: 

* enter all complaints and actions taken in response to complaints in 
its WHISARD database, and use this information as part of its resource 
allocation process; 

* establish a process to help ensure that input from external 
stakeholders, such as employer associations and worker advocacy groups, 
is obtained and incorporated as appropriate into its planning process; 

* incorporate information from its commissioned studies in its 
strategic planning process to improve targeting of employers for 
investigation; and: 

* identify ways to leverage its existing tools by improving services 
provided through hotlines, office phone lines, and partnerships, and 
improving its tracking of whether penalties are assessed when repeat or 
willful violations are found and whether back wages and penalties 
assessed are collected. 

To provide better accountability in meeting its goal of improving 
employer compliance, we recommend that the Secretary of Labor direct 
the Administrator of WHD to establish, consistently maintain, and 
report on its performance measures for FLSA. 

Agency Comments: 

We held a meeting with WHD officials on June 20, 2008, in which we 
discussed our findings and recommendations in detail. At that meeting, 
they provided comments on our recommendation regarding obtaining input 
from external stakeholders. We adjusted the recommendation to indicate 
that they consider stakeholder input only as appropriate. They also 
indicated that their priorities do not currently include entering 
information on all complaints received from workers. However, their 
database would allow them to enter this information. In addition, we 
provided a copy of our draft statement to WHD, but the agency declined 
to comment on it prior to the hearing. 

Mr. Chairman, this completes my prepared statement. I would be pleased 
to respond to any questions you or other members of the Committee may 
have. 

GAO Contacts: 

For further information, please contact Anne-Marie Lasowski at (202) 
512-7215. Individuals making key contributions to this testimony 
include Revae Moran, Danielle Giese, Amy Sweet, Miles Ingram, Susan 
Aschoff, Sheila McCoy, John G. Smale, Jr., Jerome Sandau, and Olivia 
Lopez. 

[End of section] 

Attachment I: Scope and Methodology: 

To identify the trends in WHD's FLSA investigations and other 
compliance activities from fiscal year 1997 to 2007, we obtained and 
analyzed data from WHD's Wage and Hour Investigator Support and 
Reporting Database (WHISARD). The data included information on WHD's 
enforcement actions, back wages, penalties, partnerships, and outreach 
activities. All data we reported were assessed for reliability and 
determined to be sufficiently reliable for the purposes of this 
statement. In addition, we gathered quantitative and qualitative 
information from agency officials on factors that may have influenced 
these trends, including staff resources. To assess the effectiveness of 
WHD's planning and implementation of compliance activities and whether 
these activities led to improvements in FLSA compliance, we analyzed 
WHD's annual performance plans and reports in light of GAO's work and 
guidance on strategic planning and performance management for 
regulatory agencies. In addition, we examined performance assessments 
conducted by outside experts at WHD's request. 

Finally, for all of these research objectives, we interviewed WHD 
officials at the national and regional level and external organizations 
representing employers and employees affected by WHD's compliance 
activities and visited WHD and state offices in California, Georgia, 
New Hampshire, Texas, and Wisconsin. We selected these states using 
several criteria that would provide a mix of characteristics, including 
the concentration of hourly workers earning at or below the federal 
minimum wage in each state; the number of formal agreements between WHD 
and state or local organizations; and geographic diversity. We also 
made test calls to WHD's local and national hotlines. In addition, we 
reviewed all relevant laws and regulations. We conducted this 
performance audit from August 2007 through July 2008 in accordance with 
generally accepted government auditing standards. Those standards 
require that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our audit objectives. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 75-718 (codified at 29 U.S.C. ï¿½ 201 et seq.) 

[2] For the remainder of this statement, when we refer to years, we are 
referring to the federal fiscal year (October 1 to September 30.) 

[3] The 95 percent confidence interval is within +/-5.05 percent of 
this estimate. 

[4] Certain kinds of employees are not covered by various aspects of 
the FLSA. For example, certain executive, administrative, or 
professional employees and outside sales employees are among those that 
are exempt from FLSA's minimum wage and maximum hour requirements. 
Section 13 of the FLSA provides more detailed information about exempt 
employees. 29 U.S.C. ï¿½ 213(a). 

[5] FLSA provides the Secretary of Labor with the authority to 
determine which jobs and equipment are too hazardous for children under 
the age of 18 or detrimental to their health or well-being. 

[6] We have defined the activities WHD conducts as part of its 
enforcement strategy as "enforcement actions" to distinguish them from 
its partnership and outreach activities. 

[7] This 95 percent confidence interval is within +/-1.96 percent of 
this estimate. 

[8] This 95 percent confidence interval is within +/-1.96 percent of 
this estimate. 

[9] Penalties are fines that WHD may impose when employers violate 
child labor provisions or are found to have willfully or repeatedly 
violated the minimum wage or overtime provisions of FLSA. They are 
known as "civil money penalties." 

[10] Many states have labor laws that offer similar protections to 
those in FLSA, but state laws vary in the issues they address and the 
extent to which they are enforced. In general, if both federal and 
state law apply, the more stringent (i.e. the one more protective for 
the worker) takes precedence. 

[11] In addition to the FLSA, WHD also enforces the Migrant and 
Seasonal Agricultural Worker Protection Act, the Family and Medical 
Leave Act, the Davis Bacon Act, and other federal labor laws. 

[12] Although reliable data on the number of enforcement actions WHD 
conducted from 1997 to 2007 were available, data on the types of 
enforcement actions WHD conducted prior to 2000 were not reliable and 
therefore are not included in this statement. 

[13] Although data on the source of WHD's enforcement actions (i.e., 
whether the actions were initiated by complaints from workers or by 
WHD) were available for the entire period from 1997 to 2007, as noted 
previously, reliable data on the types of enforcement actions conducted 
by WHD was not available prior to 2000. 

[14] GAO. Department of Labor: Cases Studies from Ongoing Work Show 
Examples in Which Wage and Hour Division Did Not Adequately Pursue 
Labor Violations, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-
973T]. (Washington, D.C.: July 15, 2008). 

[15] Reliable data regarding industrial classification were not 
reliable prior to 2000 and are not included in our statement. 

[16] This includes states with no state minimum wage. 

[17] Due to rounding, these percentages do not add up to 100. In 
addition, less than 3 percent of FLSA violations found were violations 
of, for example, recordkeeping regulations or regulations requiring the 
display of informational posters. These violations are not attributable 
to the overtime, minimum wage, or child labor provisions of FLSA, and 
are not associated with the payment of back wages or penalties, and are 
therefore not included in our calculations. 

[18] We did not include data on back wages assessed by WHD prior to 
2000 because they were not reliable. 

[19] The amounts shown are in current dollars. 

[20] A repeat violation is a violation in which the employer previously 
violated the minimum wage or overtime requirements of FLSA, provided 
the employer was previously notified by WHD that it had allegedly 
violated the law, or if a court or other tribunal found a previous 
violation, unless that finding was appealed or set aside. A willful 
violation is one in which the employer knew its conduct was prohibited 
by FLSA or showed reckless disregard for the requirements of FLSA. In 
determining whether a violation is willful, WHD takes into account all 
of the facts and circumstances surrounding the violation. 

[21] FLSA limits the assessment of penalties to investigations in which 
willful, repeat, or child labor violations are found. 

[22] According to WHD officials and agency data, the large majority of 
partnership agreements entailed outreach activities. Joint enforcement 
actions were mentioned in a small proportion of partnership agreement 
documents, though WHD officials and a WHD partner reported that the 
agency was not fully participating in these joint enforcement efforts. 
Therefore, time spent on partnerships was almost completely accounted 
for in outreach event time, and our analysis groups the two strategies 
together 

[23] Partnership agreement documents were not available for 
partnerships formed prior to 1999. 

[24] Although the recording of data regarding outreach activities was 
not mandatory prior to 2003, WHD officials said that the entry of time 
spent on outreach as well as a record of the event was required in 
order for staff to be paid, so we have included those data for 2000 
through 2007. All other outreach data reported include only events from 
2003 to 2007. 

[25] GAO. Executive Guide: Effectively Implementing the Government 
Performance and Results Act, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO/GGD-96-118] (Washington, D.C.: June 1996). 

[26] GAO, Managing for Results: Strengthening Regulatory Agencies' 
Performance Management Practices, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO/GGD-00-10] (Washington, D.C.: Oct. 28, 1999). 

[27] GAO. Executive Guide: Effectively Implementing the Government 
Performance and Results Act, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO/GGD-96-118] (Washington, D.C.: June 1996). 

[28] The top nine industries identified as those with the highest 
potential for minimum wage and overtime violations were construction; 
eating and drinking places; certain health services, such as medical 
laboratories and home health care; grocery stores; hospitals; 
elementary and secondary schools; certain business services, such as 
photo finishing; child day care services; and hotels and motels. 

[End of section] 

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