The Fair Labor Standards Act:

Back Wage Case Management

HRD-88-110: Published: Jul 28, 1988. Publicly Released: Aug 30, 1988.

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Pursuant to a congressional request, GAO investigated the Employment Standards Administration's (ESA) Wage and Hour Division's (WHD) management of back-wage installment collections and disbursements at two regional ESA offices.

GAO found that ESA: (1) in fiscal year 1987, disbursed about $15.7 million in back wages from litigated cases to employees and deposited about $1.2 million in undistributed back wages in the Treasury; and (2) as of January 31, 1988, held about $29.4 million in its back-wage disbursement account. GAO also found that WHD did not comply with back-wage management requirements in 85 percent of 148 cases GAO reviewed, with deficiencies involving: (1) untimely collections of back wages from employers; (2) inadequate efforts to locate employees owed back wages; (3) late payments to employees owed back wages; (4) late case closings; and (5) late transfers of unlocated employees' wages to the Treasury. In addition, GAO found that WHD: (1) lacked procedures regarding the time period for follow up on late employer payments; (2) attributed some case management problems to staff inexperience; and (3) directed staff to not try to find unlocated employees, citing limited staff resources. GAO believes that the review plans WHD has undertaken and its plan to implement an automated back-wage management and disbursement system will improve the regional offices' management of back-wage cases.

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