The federal agency responsible for investigating employers who employ children, fail to pay proper wages, and violate other fair labor laws is riddled with inadequacies, according to a Government Accountability Office (GAO) report released today.

GAO performed an undercover audit of the Department of Labor’s Wage and Hour Division (WHD) in which GAO investigators posed both as employees whose rights were being violated and as employers in violation of federal fair labor laws. The results of GAO’s audit do not engender much confidence in WHD:

For example, WHD failed to investigate a child labor complaint alleging that underage children were operating hazardous machinery and working during school hours. In another case, a WHD investigator lied to our undercover investigator about confirming the fictitious businesses’ sales volume with the Internal Revenue Service (IRS), and did not investigate our complaint any further. WHD successfully investigated 1 of our 10 fictitious cases, correctly identifying and investigating a business that had multiple complaints filed against it by our fictitious complainants. Five of our 10 complaints were not recorded in WHD’s database and 2 of 10 were recorded as successfully paid when in fact the fictitious complainants reported to WHD they had not been paid. 

(Check out some of the audio from GAO’s undercover calls.)

WHD’s failure to record complaints to its database raises questions. According to the agency summary of activity for 2008, “The number of registered complaints declined for the fourth year, reflecting the agency’s emphasis on complaint intake strategies that screen incoming calls and correspondence to ensure that the issue is properly within WHD’s enforcement jurisdiction, allowing the agency to focus resources on targeted investigations.”

Maybe that’s true, or maybe WHD is just recording fewer complaints. According to GAO, WHD’s southeast region does not record unsuccessful investigations, in order to pad its stats: “WHD staff told us that if employers do not agree to pay back wages, cannot be located, or do not answer the telephone, the conciliation work performed will not be recorded in the database, making it appear as though these offices are able to resolve nearly all conciliations successfully.”

Out of sight, out of mind. Unfortunately, as GAO concludes of WHD’s current practices, “[T]he result is unscrupulous employers taking advantage of our country’s low wage workers.”