Minimum Wages & Overtime Pay:

Concerns About Statutory Provisions and Agency Tracking Systems

T-HRD-92-21: Published: Mar 25, 1992. Publicly Released: Mar 25, 1992.

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GAO discussed the Department of Labor's (DOL) success in collecting back wages due to employees because of minimum wage and overtime violations. GAO noted that: (1) in fiscal year 1991, DOL detected about $143 million in back wages due to about 383,000 workers, and employers either agreed to pay or were ordered to pay $115 million, most of which employees actually collected; (2) the lack of civil monetary penalties for failure to keep adequate payroll records limits DOL ability to detect minimum wage and overtime violations; (3) in 1985, it found recordkeeping violations in 46 of 53 randomly selected case files, and 10 of them showed evidence that employers had falsified or concealed records; (4) some employees are probably not receiving the back wages owed to them, because when an employer refuses to pay back wages DOL or the individual employee must sue the employer in court to force payment, which can be a costly and time-consuming process; (5) the 2-year statute of limitations allows the amount of back wages an employee can collect to be reduced during the period in which DOL investigates the case or negotiates with the employer, but back wages can be reduced so much that litigation is not worthwhile; and (6) although the Wage and Hour Division has procedures it believes are successful in obtaining back wages for employees, it lacks information needed to confirm that its procedures are working. GAO believes that DOL still lacks information confirming the effectiveness if its procedures for obtaining back wages due to employees.

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