[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
GAO'S UNDERCOVER INVESTIGATION: WAGE THEFT OF AMERICA'S VULNERABLE
WORKERS
=======================================================================
HEARING
before the
COMMITTEE ON
EDUCATION AND LABOR
U.S. House of Representatives
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, MARCH 25, 2009
__________
Serial No. 111-11
__________
Printed for the use of the Committee on Education and Labor
Available on the Internet:
http://www.gpoaccess.gov/congress/house/education/index.html
----------
U.S. GOVERNMENT PRINTING OFFICE
48-054 PDF WASHINGTON : 2009
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON EDUCATION AND LABOR
GEORGE MILLER, California, Chairman
Dale E. Kildee, Michigan, Vice Howard P. ``Buck'' McKeon,
Chairman California,
Donald M. Payne, New Jersey Senior Republican Member
Robert E. Andrews, New Jersey Thomas E. Petri, Wisconsin
Robert C. ``Bobby'' Scott, Virginia Peter Hoekstra, Michigan
Lynn C. Woolsey, California Michael N. Castle, Delaware
Ruben Hinojosa, Texas Mark E. Souder, Indiana
Carolyn McCarthy, New York Vernon J. Ehlers, Michigan
John F. Tierney, Massachusetts Judy Biggert, Illinois
Dennis J. Kucinich, Ohio Todd Russell Platts, Pennsylvania
David Wu, Oregon Joe Wilson, South Carolina
Rush D. Holt, New Jersey John Kline, Minnesota
Susan A. Davis, California Cathy McMorris Rodgers, Washington
Raul M. Grijalva, Arizona Tom Price, Georgia
Timothy H. Bishop, New York Rob Bishop, Utah
Joe Sestak, Pennsylvania Brett Guthrie, Kentucky
David Loebsack, Iowa Bill Cassidy, Louisiana
Mazie Hirono, Hawaii Tom McClintock, California
Jason Altmire, Pennsylvania Duncan Hunter, California
Phil Hare, Illinois David P. Roe, Tennessee
Yvette D. Clarke, New York Glenn Thompson, Pennsylvania
Joe Courtney, Connecticut
Carol Shea-Porter, New Hampshire
Marcia L. Fudge, Ohio
Jared Polis, Colorado
Paul Tonko, New York
Pedro R. Pierluisi, Puerto Rico
Gregorio Kilili Camacho Sablan,
Northern Mariana Islands
Dina Titus, Nevada
[Vacant]
Mark Zuckerman, Staff Director
Sally Stroup, Republican Staff Director
C O N T E N T S
----------
Page
Hearing held on March 25, 2009................................... 1
Statement of Members:
McKeon, Hon. Howard P. ``Buck,'' Senior Republican Member,
Committee on Education and Labor........................... 4
Prepared statement of.................................... 5
Miller, Hon. George, Chairman, Committee on Education and
Labor...................................................... 1
Prepared statement of.................................... 3
Statement of Witnesses:
Kutz, Greg, Managing Director, U.S. Government Accountability
Office, Washington, DC; accompanied by Jonathan Meyer,
Assistant Director, U.S. Government Accountability Office,
Dallas, TX................................................. 8
Prepared statement of.................................... 11
GAO'S UNDERCOVER INVESTIGATION: WAGE
THEFT OF AMERICA'S VULNERABLE WORKERS
----------
Wednesday, March 25, 2009
U.S. House of Representatives
Committee on Education and Labor
Washington, DC
----------
The committee met, pursuant to call, at 10:03 a.m., in room
2175, Rayburn House Office Building, Hon. George Miller
[chairman of the committee] presiding.
Present: Representatives Miller, Kildee, Payne, Woolsey,
Hinojosa, McCarthy, Tierney, Kucinich, Hare, Courtney, Shea-
Porter, Sablan, Titus, McKeon, Petri, Price, and Roe.
Staff present: Aaron Albright, Press Secretary; Tylease
Alli, Hearing Clerk; Jordan Barab, Senior Labor Policy Advisor;
Chris Brown, Labor Policy Advisor; Jody Calemine, Labor Policy
Deputy Director; Nina DeJong, Investigative Associate; Lynn
Dondis, Senior Policy Advisor, Subcommittee on Workforce
Protections; Carlos Fenwick, Policy Advisor, Subcommittee on
Health, Employment, Labor and Pensions; Patrick Findlay,
Investigative Counsel; David Hartzler, Systems Administrator;
Ryan Holden, Senior Investigator, Oversight; Stephanie Moore,
General Counsel; Alex Nock, Deputy Staff Director; Joe Novotny,
Chief Clerk; Rachel Racusen, Communications Director; Dray
Thorne, Senior Systems Administrator; Michael Zola, Chief
Investigative Counsel, Oversight; Mark Zuckerman, Staff
Director; Andrew Blasko, Minority Speech Writer and
Communications Advisor; Robert Borden, Minority General
Counsel; Cameron Coursen, Minority Assistant Communications
Director; Ed Gilroy, Minority Director of Workforce Policy; Rob
Gregg, Minority Senior Legislative Assistant; Richard Hoar,
Minority Professional Staff Member; Alexa Marrero, Minority
Communications Director; Jim Paretti, Minority Workforce Policy
Counsel; Molly McLaughlin Salmi, Minority Deputy Director of
Workforce Policy; and Linda Stevens, Minority Chief Clerk/
Assistant to the General Counsel.
Chairman Miller [presiding]. Good morning. A quorum being
present, this oversight hearing on the Committee of Education
and Labor, ``The GAO Undercover Investigation: Wage Theft of
America's Vulnerable Workers,'' will now come to order.
And pursuant to rule 7(c), any member may submit an opening
statement in writing, which will be made part of the permanent
record.
And the Chair now recognizes himself for the purposes of
making an opening statement, and then I will recognize Mr.
McKeon, the senior Republican on the Committee.
The Committee on Education and Labor meets this morning to
examine the results of a Government Accountability Office
undercover investigation last year into practices of the Wage
and Hour Division of the Department of Labor.
In our first hearing on wage theft in July, we learned that
millions of workers were robbed of their hard-earned wages
every day. GAO testified that the very agency tasked to fight
wage theft had failed to effectively investigate and properly
track the number of cases involved in our nation's minimum
wage, overtime, and child labor laws.
In fact, GAO cited 15 case studies that showed the failure
of the agencies to fully investigate and properly address
violations of the law. Hundreds of cases were found where the
agency did not assign an investigator for more than a year
after the initial complaint. Delays effectively deny justice
because of the 2-year statute of limitations on wage theft.
As a result of their initial investigation, the GAO
concluded that thousands of complaints handled by the Wage and
House Division were likely mishandled over the past decade.
These failures likely resulted in workers receiving little or
no restitution at all from their employers.
In light of these initial findings, the Committee asked the
GAO to continue its investigation and dig deeper to see whether
highlighted cases were isolated or a symptom of a larger
problem throughout the agency.
This morning, the GAO reports back to the Committee on what
they learned during their undercover investigation.
From today's testimony, it is clear that there are serious
problems with the Wage and Hour Division's ability to
effectively enforce the law. The agency has dropped the ball in
far too many cases in pursuing employers that cheat their
workers out of their hard-earned wages.
Some Wage and Hour employees explicitly discouraged GAO
undercover investigators posing as workers from filing the
complaints. Other complaints went unanswered. Anonymous tips of
children illegally operating dangerous machinery did not get
investigated at all.
Not only was this allegation never investigated, but the
complaint did not appear in the agency's computers that are
used to track cases. Dropping the ball in child labor
complaints could be potentially deadly.
I wish this was not an isolated incident. The GAO found
time and again complaints were routinely brushed aside,
improperly tracked, or inadequately investigated.
I am concerned about the pattern of inaction in properly
addressing thousands of cases involving overtime, minimum wage,
and child labor violations, because these violations of the law
are not trivial.
Those most vulnerable to wage theft are likely bearing the
brunt of our nation's economic crisis. Families where a
breadwinner has his or her wages stolen still have rent to pay,
mouths to feed, children to clothe, and medicine to buy. They
can't afford to be paid less than what the law says.
Simply put, when a business pockets wages due its workers,
it is theft, and it is illegal. Today's testimony will help
inform Congress and the new leadership in the Department of
Labor on whether additional resources, better training, or
improved statutory language are needed.
We owe it to all hard-working Americans to ensure that the
Federal Government lives up to its responsibility to guarantee
that families are not being cheated out of their wages by
unscrupulous employers.
Ultimately, I believe that improving the Wage and Hour
Division will come down to strong leadership and a renewed
commitment to enforce the law. I believe that that was lacking
in the past administration. I believe that the previous
Secretary of Labor was essentially absent without leave with
regard to the enforcement of the laws on behalf of the safety
of workers and the wages of workers.
I am confident that the Obama administration and Secretary
Solis are committed to turning this egregious record around and
ensuring that all workers are treated fairly by their employers
and their government.
And I would like now to yield to Mr. McKeon for his opening
statement.
[The statement of Mr. Miller follows:]
Prepared Statement of Hon. George Miller, Chairman, Committee on
Education and Labor
The Committee on Education and Labor meets this morning to examine
the results of a Government Accountability Office undercover
investigation last year into practices of the Wage and Hour Division of
the Department of Labor.
In our first hearing on wage theft in July, we learned that
millions of workers are robbed of their hard earned wages every year.
GAO testified that the very agency tasked to fight wage theft had
failed to effectively investigate and properly track a number of cases
involving our nation's minimum wage, overtime, and child labor laws.
In fact, GAO cited 15 case studies that showed the failures of the
agency to fully investigate and properly address violations of the law.
Hundreds of cases were found where the agency did not assign an
investigator for more than a year after the initial complaint. Delays
effectively deny justice because of the two year statute of limitations
on wage theft.
As a result of their initial investigation, the GAO concluded that
thousands of complaints handled by the Wage and House Division were
likely mishandled over the past decade. These failures likely resulted
in workers receiving little or no restitution at all from their
employer.
In light of these initial findings, the Committee asked the GAO to
continue its investigation and dig deeper to see whether the
highlighted cases were isolated or a symptom of a larger problem
throughout the agency.
This morning, the GAO reports back to the Committee on what they
learned during their undercover investigation.
From today's testimony, it is clear that there are serious problems
with the Wage and Hour Division's ability to effectively enforce the
law. The agency has dropped the ball in far too many cases in pursuing
employers that cheat their workers out of their hard earned wages.
Some Wage and Hour employees explicitly discouraged GAO undercover
investigators posing as workers from filing complaints. Other
complaints went unanswered.
Anonymous tips of children illegally operating dangerous machinery
did not get investigated at all. Not only was this allegation never
investigated, but the complaint did not appear in the agency computers
that are used to track cases. Dropping the ball in child labor
complaints could be potentially deadly.
I wish this was an isolated incident.
The GAO found that time and again, complaints were routinely
brushed aside, improperly tracked, or inadequately investigated.
I am concerned about the pattern of inaction in properly addressing
thousands of cases involving overtime, minimum wage, and child labor
violations. Because these violations of the law are not trivial.
Those most vulnerable to wage theft are likely bearing the brunt of
our nation's economic crisis. Families where a breadwinner has his or
her wages stolen still have rent to pay, mouths to feed, children to
clothe, and medicine to buy. They can't afford to be paid less than
what the law says.
Simply put, when a business pockets wages due to its workers, it is
theft. And it is illegal.
Today's testimony will help inform Congress and the new leadership
of Department of Labor on whether additional resources, better training
or improved statutory language are needed.
We owe it to all hard working Americans to ensure that the Federal
Government lives up to its responsibility to guarantee that families
are not being cheated out of their wages by unscrupulous employers.
Ultimately, I believe that improving the Wage and Hour Division
will come down to strong leadership and a renewed commitment to enforce
the law.
I am confident that the Obama administration and Secretary Solis
are committed to turning this egregious record around and ensuring that
all workers are treated fairly by their employers and their government.
______
Mr. McKeon. Thank you, Chairman Miller, and good morning.
Today's hearing is about work and pay. It is the energy
that drives the American dream. Republicans have long believed
in the value and dignity of work and the rewards that come from
it.
Take welfare reform. Back in the 1990s, Republicans pushed
to change a system that for decades gave money to people for
not working. Today, welfare recipients earn their benefits by
working or training for a new job or taking classes to get the
skills they need to join the workforce later.
They are no longer dependent on the government. Instead,
government becomes dependent on them as recipients eventually
earn a living on their own and pay taxes.
And many years later, I am happy to report that bipartisan
welfare reform is still working. From 1996 to 2006, the
Heritage Foundation says the number of people receiving welfare
dropped by nearly 60 percent.
For these and all American workers, we have a duty to
ensure that federal workplace laws are enforced, and that
brings us to the subject of today's hearing, wage theft.
Mr. Chairman, I am not sure this is the best language to
discuss the whole range of issues that need our attention in
this area. The allegations we are examining are not always
theft as we know it. The U.S. Department of Labor's Wage and
Hour Division is responsible for enforcing a whole host of
workplace laws.
For instance, we will hear today about alleged violations
of child labor laws. This isn't a question of so-called wage
theft, but it is an equally important concern.
Rather than using politically charged language, I think we
should ease the rhetoric and focus on the serious issues at
hand. And with the seriousness of these issues, I can't help
but notice that no one from the Labor Department is testifying
today. That is too bad.
Mr. Chairman, I respectfully submit that, in addition to
the expert testimony we will hear from the GAO, it would have
been helpful to have a representative from the department here
with us today. A Labor Department expert could have brought a
different perspective to the problems of so-called wage theft.
We have been told that a lack of political appointees
within the administration precludes the Department of Labor
from testifying today. I certainly appreciate the fact that the
department--indeed, the entire administration--is still in
transition. However, that does not explain why career civil
servants at the department, many of whom have spent decades
enforcing these laws, could not have testified today and
offered their thoughts.
At a minimum, one of these long-term officials with
responsibility for enforcement of our wage and hour laws might
have offered an explanation for dereliction of duty, alleged by
the GAO. More importantly, that expert could have offered
possible solutions to the problem.
At our urging, I understand that the majority requested
that a Department of Labor official testify here today. I am
told the department declined.
I am not sure how persistent we were in pressing the
department on this point, Mr. Chairman, but personally I don't
think we should have taken ``no'' for an answer. If we are
serious about enforcing the law and not just scoring political
points, we should insist on bringing the individuals who are
responsible for investigating wage and hour violations here to
account for their actions.
That said, the GAO has done extensive work in this area. I
am sure there are things we can learn from this investigation,
and I welcome Mr. Kutz of the GAO--back to the Committee once
again.
Thank you, Chairman Miller. I yield back.
[The statement of Mr. McKeon follows:]
Prepared Statement of Hon. Howard P. ``Buck'' McKeon, Senior Republican
Member, Committee on Education and Labor
Thank you, Chairman Miller and good morning.
Today's hearing is about work and pay. It's the engine that drives
the American Dream.
Republicans have long believed in the value and dignity of work,
and the rewards that come from it.
Take welfare reform. Back in the 1990s, Republicans pushed to
change a system that--for decades--gave money to people for not
working.
Today, welfare recipients earn their benefits by working. Or
training for a new job. Or taking classes to get the skills they need
to join the workforce later.
They are no longer dependent on the government. Instead, government
becomes dependent on them as recipients eventually earn a living on
their own and pay taxes.
And, many years later, I'm happy to report that bipartisan welfare
reform is still working. From 1996 to 2006, The Heritage Foundation
says the number of people receiving welfare dropped by nearly 60
percent.
For these and all American workers, we have a duty to ensure that
federal workplace laws are enforced. And that brings us to the subject
of today's hearing--``wage theft.''
Mr. Chairman, I'm not sure this is the best language to discuss the
whole range of issues that need our attention in this area. The
allegations we're examining are not always ``theft'' as we know it.
The U.S. Department of Labor's Wage and Hour Division is
responsible for enforcing a whole host of workplace laws.
For instance, we'll hear today about alleged violations of child
labor laws. This isn't a question of so-called ``wage theft.'' But it's
an equally important concern.
Rather than using politically-charged language, I think we should
ease the rhetoric and focus on the serious issues at hand.
And with the seriousness of these issues, I can't help but notice
that no one from the Labor Department is testifying today.
That's too bad.
Mr. Chairman, I respectfully submit that--in addition to the expert
testimony we will hear from the GAO--it would have been helpful to have
someone from the department here with us today.
A Labor Department expert could have brought a different
perspective to the problems of so-called ``wage theft.''
We have been told that a lack of political appointees within the
Administration precludes the Department of Labor from testifying today.
I certainly appreciate the fact that the Department--indeed, the entire
Administration--is still in transition. However, that does not explain
why career civil servants at the Department--many of whom have spent
decades enforcing these laws--could not have testified today and
offered their thoughts.
At a minimum, one of these long-time officials with responsibility
for enforcement of our wage-and-hour laws might have offered an
explanation for dereliction of duty alleged by the GAO.
More importantly, that expert could have offered possible solutions
to this problem.
At our urging, I understand that the majority requested that a
Department of Labor official testify here today. I'm told the
Department declined. I'm not sure how persistent we were in pressing
the Department on this point, Mr. Chairman. But personally, I don't
think we should have taken ``no'' for an answer.
If we're serious about enforcing the law--and not just scoring
political points--we should insist on bringing the individuals who are
responsible for investigating wage-and-hour violations here to account
for their actions.
That said, the GAO has done extensive work in this area. I'm sure
there are things we can learn from its investigation, and I welcome Mr.
Kutz of the GAO back to the Committee once again.
Thank you, Chairman Miller. I yield back.
______
Chairman Miller. Thank you.
The chair would just respond that it is--as it has been
since I have become chair of the Committee, the GAO will
testify on its findings and we will ask the Department of
Labor, and we will be asking the Department of Labor, the new
Department of Labor, what they will be doing and their
recommendations to follow up on this, because I think, at the
end of the day, we are going to see that the laws are
inadequate and fail to protect the very people whose wages are
being stolen.
I do not think that wage theft is a too severe term. A
conscious decision, as you will see in the record, has been
made to deny these people the wages that they are entitled to
under the law.
You are stealing--it may only be a dollar an hour or a few
dollars an hour, but what you will see is it adds up to very
serious money for thousands and millions of workers in this
country who do not get the benefit of the wages that they
signed up to earn for the work that they, in fact, do.
There are not a lot of allegations that these people didn't
do the job. They did the job. They weren't paid at the
conclusion of the job on either the legal rate or the agreed
rate by their employer. And so we have a long ways to go here
yet.
Mr. McKeon. Mr. Chairman, may I respond?
Chairman Miller. Sure.
Mr. McKeon. I agree with you totally. That is why I say
that we should have someone here from the Department of Labor
because----
Chairman Miller. With all due respect----
Mr. McKeon [continuing]. They should be held to account for
that.
Chairman Miller. With all due respect, we had people here
from the Department of Labor before, and it was fairly
pathetic, in terms of their inability to provide the data. So
we will give the new Department a chance to get up and running.
We expect them to come and to respond to this and to help us
develop a solution to it.
Mr. McKeon. Again, Mr. Chairman--and this will be my final
comment on this--there will be a few people at the top of the
Department replaced, but there are many people there that have
been there for a number of years that have the responsibility
for enforcing these laws. I would like to know why they haven't
been.
Chairman Miller. And I think it is----
Mr. McKeon. If it is because of their top leadership, then
that should be brought out----
Chairman Miller. I think as we will see, they utterly
failed in that obligation.
Dr. Price. Mr. Chairman, if I may? May I ask a question of
the chairman?
Chairman Miller. Yes.
Dr. Price. And I apologize for being a bit late, but are we
going to--is this Committee going to have the Department come
in and respond to this report at any point? Is that----
Chairman Miller. That is my intention. When we start to
consider legislation, we will want their response as to what
happened here and what we need to do and what we should do
going forward.
Dr. Price. In hearing format?
Chairman Miller. I would expect so, yes.
Dr. Price. Thank you.
Chairman Miller. Mr. Kutz, welcome to the Committee. Let me
just introduce Mr. Kutz to the Committee once again. He needs
no introduction for the members, but certainly for the
audience.
Gregory Kutz is currently the managing director of GAO's
Forensic Audits and Special Investigations Unit. Mr. Kutz has
testified and been responsible for investigative reports about
the Federal Government's handling of Hurricane Katrina and
Rita, security at airports and borders, and security of
radioactive materials, among other important issues.
Mr. Kutz has testified before the Committee several times,
including last Congress, when he testified about abuses in the
teen residential treatment industry.
Mr. Kutz is accompanied by Jonathan Meyer, who is the
assistant director of GAO's Forensic Audits and Special
Investigations Unit.
Mr. Kutz, welcome to the Committee, and we look forward to
the testimony. You know the rules. We will give you 5 minutes
here to try to summarize your report and then open it up for--
10 minutes, excuse me, 10 minutes for you to summarize your
report and then open it up for questions. Thank you.
STATEMENT OF GREG KUTZ, MANAGING DIRECTOR, U.S. GOVERNMENT
ACCOUNTABILITY OFFICE, WASHINGTON, DC; ACCOMPANIED BY JONATHAN
MEYER, ASSISTANT DIRECTOR, U.S. GOVERNMENT ACCOUNTABILITY
OFFICE, DALLAS, TX
Mr. Kutz. Mr. Chairman and members of the Committee, thank
you for the opportunity to discuss the Department of Labor's
investigations of wage and hour complaints.
Last July, I testified before this Committee that 15 cases
of wage theft were not adequately investigated. Today's
testimony highlights the results of our investigation into
whether those 15 cases were isolated or the tip of the iceberg.
My testimony has two parts. First, I will discuss the
results of our investigation. And, second, I will discuss our
recommendations and conclusions.
First, our covert testing clearly shows that the complaint
intake process is fundamentally flawed. Posing as fictitious
wage theft victims, we filed 10 common complaints with Labor
offices across the country. We also posed as a fictitious
employer that had committed the labor law violations.
Examples of our findings include: no response to a message
we left that children were working during school hours and
operating circular saws and meat grinders; one fictitious
employee being told not to file a complaint unless he had
another job lined up; investigators accepting employer refusals
to pay without question; and cases recorded in the system as
paid, even after our bogus employee told the Department that
they were not.
We also found that most calls we made during business hours
went directly into voicemail and oftentimes were never
returned. At the end of my presentation, I will play several
clips from the undercover calls we made to Labor offices across
the country.
We also investigated cases involving over 1,000 actual wage
theft victims. These cases were identified through data-mining,
and thus they cannot be projected to all investigations.
However, they clearly show that many investigations are not
adequate.
For example, one employer agreed that it owed 93 employees
$200,000. However, this employer stalled until the 2-year
statute of limitations had expired. This case was closed with
no collections.
In another case, an investigator found that 438 employees
were owed $230,000. This case was not assigned for 22 months
and, once again, ultimately was closed with no collections.
One allegation was from an employee that worked at a
sheriff's office. The investigator closed this case after two
phone calls were not returned.
We also found that conciliation cases are oftentimes not
recorded in the Department of Labor's systems. Conciliations
generally reflect complaints of one or several employees. We
found that the head of the southeast region, which has about 57
percent of these types of complaints, instructed offices in
that region not to record failed attempts at conciliation.
Thus, it is not surprising that our statistical sample
showed that 95 percent of recorded conciliations were
adequately investigated. This is a good news-bad news story.
The good news is that, when adequate investigations are
performed, there are often positive results. The bad news is
that likely thousands of these failed conciliation cases are
never recorded in the system.
Non-conciliation cases generally involve a larger number of
employees. Our statistical sampling of these cases showed that
81 percent of the time they were adequately investigated. For
example, in one case, it was completed in 4 months with $59,000
collected for 12 convenience store employees. This case
involved detailed payroll analysis and complete follow-up to
ensure that all of the employees were, in fact, paid.
The flip side to this is that 19 percent of the larger
cases are not adequately investigated. This leaves thousands of
victims vulnerable to wage theft with no help from the Federal
Government.
Moving on to my second point, based on our overall work, we
have concluded that the complaint intake and investigation
processes are not effective. We plan to issue a report with
several recommendations to Labor to improve their human
capital, processes, and the use of technology.
For example, we were surprised to find that investigators
had no special technology or tools to do their work. If Labor's
mission in this area is to properly investigate wage theft
allegations, then they need specialized tools to research and
identify individuals and businesses. My unit would be far less
effective in serving the Congress without the critical research
tools that we use every day.
In addition, throughout our work, we found many symptoms of
human capital problems. We will be recommending for Labor to
take a look at matters such as hiring, training, and whether
sufficient staff are on board to achieve the mission.
In conclusion, our work shows that the 15 cases I described
for you last year were, in fact, the tip of the iceberg. I am
concerned that thousands of victims of wage theft become
frustrated with the complaint intake process and never actually
file complaints with Labor.
Thousands of others who file complaints find themselves
victims of unscrupulous employers who know how to beat the
system.
I am also concerned that, with the current economic crisis,
that wage theft is increasing. Congress and the new
administration have an opportunity to make changes that would
better protect our nation's most vulnerable workers.
Mr. Chairman, as I mentioned, I would like to now play some
clips from the undercover calls we made that will give you and
the members of this Committee an inside look at what real
victims of wage theft can face when dealing with the Federal
Government.
[Begin audio clip.]
Voice. Okay, well, you will have to pay him at least the
minimum wage for all the hours that he worked.
Voice. Well, you know, like I said, all of our contracts
have dried up. We really don't have anything coming in, so----
Voice. Okay, so you are not in a position where you can pay
him?
Voice. No.
Voice. Okay, well, then I will let him know that he has his
private right to action to pursue the funds.
[End audio clip.]
[Begin audio clip].
Voice. Once the employer tells me that they are not going
to pay and that they can't, my ability to, you know, force
payment has ended.
Voice. So you really have no power to do any--all you did
was just call her and ask her to pay me. I mean, she is just--
--
Voice. And, well, the thing is that--I explained the law to
her. She knows that she needs to pay you. It is just that she
is saying she doesn't have the money to. I can't wring blood
from a stone.
I am bound by the laws that I am able to enforce, the money
that Congress gives us and all of that lovely stuff. If you are
having a problem with what our office is capable of achieving
based on the laws that were written, then you need to write
your congressman. Okay, do you know who your congressmen are? I
mean, we can use all the help we can get.
[End audio clip.]
[Begin audio clip.]
Voice. You are sure you don't want to just have a nice
conversation with him yourself?
Voice. No, no, I don't want to, because he gets very loud
and angry.
Voice. Okay, well, here is another avenue that you can
pursue. Okay, do you have another job lined up?
Voice. No.
Voice. Okay. You might want to do that before you file a
complaint with us, because I can't guarantee that he is not
going to fire you.
[End audio clip.]
[Begin audio clip.]
Voice. Yeah, they have to have a certain ADV amount for us
to have enterprise coverage, and we don't have it.
Voice. What does that mean? I don't understand.
Voice. What the gross sales is for that year.
Voice. How do you get that?
Voice. We report off of the IRS statements.
Voice. Oh. So you check with IRS and IRS says that he
reports less than that?
Voice. Yes.
[End audio clip.]
[Begin audio clip.]
Voice. We have a backlog right now of about like 8 months,
8 to 10 months.
Voice. Okay.
Voice. And we are not even going to be starting an
investigation until 8 to 10 months.
[End audio clip.]
[Begin audio clip.]
Voice. Please leave a message and the officer of the day
will return your call as soon as possible.
Voice. I have seen a place--I think it is called CP&D Meat
Packaging or something like that in Modesto, California. I have
seen kids working there; I believe they are under age. They
seem to be working all day, probably during school. They are
working on some heavy type of equipment like, I guess you call
them circular saws and the ones--the machine that makes like
hamburger meat.
[End audio clip.]
Mr. Kutz. Mr. Chairman, that ends our statement. Mr. Meyer
and I look forward to your questions.
[The joint statement of Mr. Kutz and Mr. Meyer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
------
Chairman Miller. Thank you very much.
When you look at the 10 cases and the other cases, I mean,
you really see an array of just failures and, in some cases,
construction of misinformation and misleading and wrong
information to the individuals.
I mean, you have these incredible delays, which are
obviously--the delay is very--it appears to turn out to be
costly to the employee, because the statute of limitations has
already started running. So if the Department uses up 5, 6, 7,
8 months before they even investigate or they just drag the
investigation along, the employee all of a sudden loses their
right to go to court.
Is that correct?
Mr. Kutz. That is correct, yes.
Chairman Miller. So then you have other situations where
they just--they don't record the complaints at all, so the
Department is never on the hook for whether they have
successfully completed the investigation and gotten money for
the person or resolved the case. That is not part of the
database.
Mr. Kutz. Yes, 5 of the 10 cases that we did the undercover
calls were not recorded in the Labor Department's system.
Chairman Miller. And you also have--we heard on the tapes
here where you have employees basically just saying, ``We asked
the employer to pay you. They said they are not going to pay.
We are done.''
Mr. Kutz. Correct. That is something we have seen
frequently, not just this time, but the 15 cases from last
year, also.
Chairman Miller. You know, it is really quite stunning. But
then, on top of that, I think it was the last tape that we
heard, you heard an employee--the employee of the Wage and Hour
Division basically make up a scenario that never occurred,
about going to the IRS and not having the wage--so you have an
employee openly lying, constructing a lie to the person whose
wages have been illegally taken, been stolen from them.
This government employee is lying to them about why they
will not pursue the investigation, because they went to a non-
existent database on a non-existent case and came back and
said, ``We can't help you.'' Is that correct?
Mr. Kutz. That is correct. And we have referred that
individual to the inspector general of the Department of Labor
for potential administrative----
Chairman Miller. So there is some level of malfeasance
here. When you start lying to the public about the law that
some action can be taken, you referred that to where?
Mr. Kutz. The Department of Labor inspector general.
Chairman Miller. The inspector general of the Department of
Labor?
Mr. Kutz. Correct. And the Department of Labor was
concerned. We talked to the Department of Labor, people in
charge of this division. They were very concerned about
employees lying to citizens who call into the hotline.
Chairman Miller. I would hope that they would be, when we
have got to at least start with some base of obligation here,
in terms of doing the job on behalf of the public.
Well, I am encouraged that you have made that referral.
Hopefully, that will help other employees think about what
their obligation is.
But even the act of simply saying, ``We asked the employer.
The employer told us no,'' and that that is the end of the
case, the employees could do that themselves, and they probably
already have been told no by the employers.
So, I mean, what they are looking for is additional
resources and help when they come to the government, are they
not?
Mr. Kutz. Yes. I mean, when I was talking about symptoms of
human capital problems, the discouraging of people from filing
complaints would seem to be a symptom that there are either not
enough people to answer the phones, not enough people to follow
up investigations, or something along those lines.
And, certainly, they are making decisions that the small
conciliation cases I mentioned, which are one or several
employees, are low priority, and that makes sense, compared to
the bigger cases, but they have got to--they have to be honest
with people and say, ``We just don't have time to get to you.''
And, again, you did see the one case there where they said,
``We have got an 8-to 10-month backlog. We won't get to your
case for 8 to 10 months.'' And as you said, the clock ticks on
those cases, so that doesn't necessarily help the employee.
Chairman Miller. You know, you have--I guess there is a
problem here. You know, in one of the cases, not in your
undercover case, but in the other one--I think it is number
two--you know, it is $800 in back wages. That is a small case,
perhaps, for the Department of Labor. To a worker and to a
family, that week or that 2-week pay period, whatever it is,
that is a significant chunk of money.
And that is important to them. And to just be told that the
answer is no, that is a loss of $800 to that individual. I
mean, that is----
Mr. Kutz. Yes, I mean, that is----
Chairman Miller. I don't know what the threshold is. Did
you find any formal threshold at which point you did not
proceed, the Department of Wage and Hour did not proceed to
recover wages?
Mr. Kutz. We have asked that question at two levels. Number
one, from an investigation standpoint, is there a threshold
where you will actually do an investigation? And it is unclear
what that is.
And number two is, when you have a legitimate case, we have
seen cases with tens or hundreds of thousands of dollars.
Sometimes they are litigated by the solicitor's office;
sometimes they are not.
I mean, certainly their criteria is large, we believe, but
why some large or semi-large and other semi-large aren't, why
some are and some aren't, we are not completely clear, and it
is not documented exactly what that criteria would be.
So it is two levels. I mean, sometimes they are not
actually supporting the investigators by taking it over the
goal line and going to court with the unscrupulous employers in
those cases.
Chairman Miller. You know, you have cases--you have $66,000
for 21 employees, where basically--I think it is case number
nine, the ambulance company. The Wage and Hour Division
essentially walked away from that case. They just said, well,
it has taken too long.
You know, $47,000 in overtime to 98 employees, again, they
cited some evidence as a reason for not having the employer
pay. The evidence turned out to be essentially fictitious. It
did not exist.
A hundred and fifty thousands dollars due 191 employees,
the employer said that he would have to file bankruptcy. They
took that as acceptable, did nothing more on behalf of that
person. Well, I guess they negotiated it down----
Mr. Kutz. At that point----
Chairman Miller [continuing]. But the person never filed
bankruptcy.
Mr. Kutz. Right. They compromised on that.
Chairman Miller. They compromised on that. You have 241
employees that were owed nearly $2 million in overtime, and
Wage and Hour rejected the employee's offer to pay $50,000 in
back wages and then eventually sent letters saying, ``This
employer is not going to pay. You are on your own.''
Mr. Meyer. Correct.
Mr. Kutz. Correct. Yes.
Chairman Miller. So, again, we don't know that--here you
have $2 million, and you have an $800 theft of a paycheck.
There is apparently no threshold within the Department.
Mr. Kutz. No, only they define that conciliations are small
and non-conciliations are large. But even within those, they
are pursued with different levels of enforcement and
aggressiveness with respect to calls, site visits, or whatever
other types of things.
And as you mentioned, the bankruptcy thing is interesting.
There are several cases where they closed the case because they
said the company was bankrupt. We checked our databases: They
are not bankrupt.
I mean, and it gets into those tools I mentioned. Do they
have the right tools to do investigations? There are tools out
there where you could check things like bankruptcy fairly
readily.
Chairman Miller. But they just don't go through that
forensic process?
Mr. Kutz. I don't believe they have--I don't believe they
have the tools in that particular to use. That is what I
understand. Is that correct?
Mr. Meyer. That is correct. They don't have access to
public court records. That is just not part of their processes.
Chairman Miller. Did you see any change from when you
testified in Congress to the end of the year? I mean, did you--
when you were doing this investigation, did you see any change
from your initial determinations? Was there any response to the
initial GAO report?
Mr. Meyer. I can speak to that. Initially, from our
testimony last year, there was some level of disbelief. But in
our closing conferences on this report and the--especially the
statistical sample testing, the Wage and Hour officials in
Washington have seen the problems that are there and really
seem concerned about what we found and are looking to find ways
to improve.
Mr. Kutz. Well, Mr. Chairman, I would say, too, that we now
know that there are many cases that are properly investigated
and collected. And so the real issue is: Why are 81 percent of
the big cases done effectively and 19 percent not?
The good news is, 81 percent there is an effective
investigation, but 19 percent represents tens or hundreds of
thousands of people over time. That is pretty significant. And
so why there are those differences like that, that to me is too
high of a rate of unsuccessful investigations.
Chairman Miller. Just one last question, and then I will
turn to my colleagues. Is there a regional difference? Is it a
regional explanation? Is it----
Mr. Meyer. I would say that, in certain regions of the
country, whether there is a strong state labor enforcement
state officials that enforce labor laws makes a difference in
how effective the Wage and Hour Division is because of the
assistance they receive from the state.
Chairman Miller. So if the state is running a strong
operation, it is more likely you will have stronger enforcement
at the federal level?
Mr. Meyer. I think it allows the resources at the Wage and
Hour Division to handle some of the bigger cases, some of the
more problematic instances, instead of a lot of these smaller
individual cases for one person.
Chairman Miller. I see. Thank you very much.
Thank you, Mr. Kutz.
Mr. McKeon. Thank you, Mr. Chairman.
I am still in a little bit of a quandary of what we are
doing here. We can beat up on the Department of Labor, but we
don't have them to really hear--I mean, there is--what you are
talking about, the 19 percent, it sounds to me it is pretty
indefensible, but I would like to see somebody here and to hear
what they have to say about it.
When I was in school, 80 percent was a B. The 19 percent
probably should get an F. But why this is happening, I would
really like to know.
Can you tell me, Mr. Kutz, how many people work at the
Department of Labor?
Mr. Kutz. No, I don't know. We know within Wage and Hour
there are over 700 investigators and a little over 1,000 staff.
We focused on the Wage and Hour Division. I am not familiar
with the whole Department of Labor.
Mr. McKeon. Seven hundred investigators and 1,000 staff. So
1,700 people work in the Wage and Hour----
Mr. Kutz. No, that is total. The total is 1,000. There are
several hundred technicians and other administrative--that is
700-some investigators.
Mr. McKeon. A thousand people?
Mr. Kutz. Roughly.
Mr. McKeon. To investigate how many complaints, would you
estimate, in a year?
Mr. Kutz. Well, in the system in 2007, there were a little
over 30,000 recorded. But as I mentioned, a lot of cases never
get recorded in the system, so it is probably 30,000 plus
several thousand more, at least. Let's say 40,000.
Mr. McKeon. So at least 30,000?
Mr. Kutz. At least 30,000, yes.
Mr. McKeon. And we have got 1,000 people to investigate
30,000 and they are doing a good job on 81 percent of them and
a lousy job on 19 percent of them.
Mr. Kutz. Of the bigger cases, correct.
Mr. McKeon. You know, maybe we are just holding this
hearing to beat up on the Bush administration. I don't know.
But out of----
Chairman Miller. If I were one of the 20 percent, I think
you would want to know what happened to my wages.
Mr. McKeon. No question. That is why I would like to see
somebody from Department of Labor that we could zero in on. I
didn't disturb you, Mr. Chairman. I appreciate it. Thank you.
Mr. Kutz, you have testified as to the failures of
frontline rank-and-file federal employees at the Department of
Labor in handling and processing wage and hour complaints.
There is nothing in your testimony to suggest that these
shortcomings were the result of any directive by any political
appointee of the prior administration, is there?
Mr. Kutz. Nothing that we saw of that, no.
Mr. McKeon. You are not suggesting that these career
federal employees were told by Washington to mishandle or delay
processing complaints, are you?
Mr. Kutz. We have no evidence of that, no.
Mr. McKeon. Again, that is why I wonder why we are going
through this.
You have testified at length about your findings at this
most recent analysis of case handling. By way of comparison, do
you have any similar analysis of enforcement under prior
administrations?
Mr. Kutz. I believe the other GAO report went back into the
1990s and showed declining numbers of investigators of about 20
percent, but I don't know if we have got any program reviews in
the 1990s that I am aware of.
Mr. McKeon. Possibly if we increased the number of
investigators, you say this started decreasing back in the
1990s?
Mr. Kutz. It started decreasing from 1997 to 2007. It
reduced by about 25 percent the number of investigators in this
division. So over a 10-year period, it went down by 20 percent
to 25 percent.
Mr. McKeon. That may be one of the solutions that we could
attack to help the other 20 percent or 19 percent.
Has your study revealed any evidence to suggest that
frontline, rank-and-file government workers were handling cases
differently during the Clinton administration?
Mr. Kutz. We don't know that, can't comment on that.
Mr. McKeon. Or the Bush administration before that or the
Reagan administration before that?
Mr. Kutz. No, no. We just know for the last 2 or 3 years.
That is the timeframe we have looked at.
Mr. McKeon. Okay, so I--Mr. Chairman, I think that this is
a really important issue. If we have 19 percent of people who
have serious complaints--it sounds to me like we do--we ought
to really bring the Department of Labor in here, ask them why
this is happening, ask them if they think that, by adding
additional people into the Wage and Hour investigation process
would help solve this, then we should do something about
changing the budgetary requests or the budgetary requirements
or something within the Department.
You know, I don't think we disagree that people should be
paid for their work. You know, I think we are all in agreement
on that. If this is just a political witch hunt to try to blame
the Bush administration, that is one thing. If it is to really
solve the problem, then we should have people here from the
Department, we should get to the bottom of it.
I personally think, aside from hearing--you know, I mean,
this is pretty bad stuff, what you have shown here--that if we
have people at the Department, career people that are giving
these kind of responses to people that are making serious
requests, that should be handled.
And it sounds like you are not blaming it on the
administration giving false direction. They are telling them to
do certain things a certain way. Of the 15 people that you
called, were you able to nail down to like a couple of
employees that were making the same mistakes over and over or
giving these kind of----
Mr. Kutz. In the Baltimore office, there was one individual
that answered the phone several times. There is usually one or
two people answering the phone, and so we did six different
offices.
I will tell you the office that we did work: Baltimore,
Birmingham, Dallas, Miami, San Jose, and West Covina,
California. Those were the six offices we called.
So you typically would get the same person if you made
multiple calls to an office. But Baltimore----
Mr. McKeon. Then----
Mr. Kutz [continuing]. Several of the ones you heard on the
audio earlier were the same person in Baltimore, some of the
more egregious cases.
Mr. McKeon. Then I think we could seriously nail down some
of this stuff and fix it. And that is what we should be doing.
Mr. Kutz. And we agree, too. The Department of Labor asked
us for the information so they know who those employees are and
they can do training, counseling, administrative actions,
whatever the case may be. So we will share with them that
information.
Mr. McKeon. And maybe they have made progress in that we
don't know about. And that is why, again, we should have
somebody here from the Department to find out.
I think we understand that most of these are career
appointees--I mean, not appointees. They are career people that
have applied for jobs, that have taken jobs, that are doing the
jobs, and maybe out of the 1,000 people, maybe 990 are doing a
good job or maybe 900 are doing a good job or maybe 10 are
doing a terrible job or 100 are doing a terrible job.
But at some point, we should get serious about really
fixing the problem instead of trying to point political blame.
That is my point in this whole thing, Mr. Chairman.
Chairman Miller. Thank you. The chair will recognize
himself.
You want to keep talking about political blame. Let's just
understand something: I became chairman of this Committee 2
years ago. I don't remember any oversight on this problem prior
to my becoming chair.
We asked a question of GAO because this issue has been
raised. It was raised many, many years throughout the
construction trades, throughout all kinds of occupations. We
could get no responses.
We asked GAO. They investigated the time and period. They
couldn't go back and investigate what--you know, we weren't
there, they weren't there, and this is what we found.
When we saw the first report, we said, ``You know, this is
a serious problem. Would you go in-depth and find out, was your
first report, you know, an anomaly or is there something
systematically wrong with this? Is this a systemic problem?''
They have come back now with this report that says it is
much more widespread, and it is about 20 percent--19 percent,
20 percent of the cases. It is serious. It is costing people a
lot of money. They are not following through. We will then take
the next step.
So, you know, it falls on whatever watch you want. This
isn't about the politics of that. I became chairman, and I
asked this question, because I have--you know, the issues of
people being paid off the books, people being denied overtime,
this is not new.
It may be new to you and to this Congress because there was
no concern expressed about this over the last many years. And
so here it is, and we will have the Department of Labor in. We
expect them to partner with us to work out the solutions to
this problem and get these people the wages that they are due.
Many of these people will never see their wages because
there was a lack of oversight, there wasn't due diligence on
this issue. We would hope that people now and the Department,
recognizing the problem they have there, will change. And I
think it will under the new secretary and new people. Why would
you carry on in this inherited problem?
But the purpose of here is to get the change on behalf of
working people that every day are losing wages that are
entitled to them. So we will go through this process, and
everybody will be included, and everybody will have a chance to
participate.
Mr. McKeon. Mr. Chairman, may I respond?
Chairman Miller. Sure.
Mr. McKeon. You became chairman a little over 2 years ago.
I was chairman a little less than a year. At the time, we were
very, very busy, as you remember, finishing up conference on
the pension bill, passing the mining safety law----
Chairman Miller. No, I am not saying you weren't doing your
job.
Mr. McKeon. I understand.
Chairman Miller. I am just saying, but, you know, you asked
a question of GAO and they come back to you. But you know what?
You don't have to use your staff. God bless the fact that we
have got GAO. They went off and did the work. They came back
with the results. We were fairly busy, too, if I remember. So--
--
Mr. McKeon. Yes, we are all----
Chairman Miller. You know, this is just a question of
whether or not this is a priority.
Mr. McKeon. We are all real busy here.
Chairman Miller. This happens to be a priority for me----
Mr. McKeon. What I would----
Chairman Miller [continuing]. I hope for the Committee, and
I hope for the Department of Labor.
Mr. McKeon. Now may I respond?
Chairman Miller. Sure.
Mr. McKeon. And I will respond, and I will not interrupt
you when you respond.
Chairman Miller. Just having a conversation.
Mr. McKeon. That is great. What I would like to say is, I
am totally in agreement with you that this should be fixed.
Chairman Miller. I knew we would get there. Excuse me. I am
sorry.
Mr. McKeon. We get along well personally. I will try to
maintain the decorum of not interrupting you again.
Chairman Miller. And I am going to try really hard, too.
Mr. McKeon. That would be great, Mr. Chairman. Now, I think
we are in agreement that there is a problem with this 19
percent. I think we are in agreement of how we should fix it. I
am not concerned about blaming you because you have just been
chairman for 2 years, and I was just chairman for a year.
I think the important thing is, they have not been able to
tell us that this didn't happen under FDR, you know, or under
Truman. What we--the important thing is that it is 19 percent
of people that need to be helped. And there is a way to address
that. And I think that it is important that we do that and it
is incumbent upon us to do that.
And I will work with you to make sure that that happens. I
just want to make sure that we are not trying to play a game of
political blame, that we are really trying to help the 19
percent. And I think that there is a way to do it. We are going
to have to get the Department in here and in a non-finger-
pointing way go after those employees that are not doing their
job.
They are hired. They are paid. And then, once we find out
that all 1,000 of them are doing their job adequately, if they
still can't get to the 19 percent, then they should hire more
people, and they should be adequately trained, and they should
understand the importance of their job is to uphold and carry
out the law so that people are paid for an honest day's wages
for an honest day's work.
Thank you, Mr. Chairman.
Chairman Miller. Thank you, Mr. McKeon.
Mr. Kildee?
Mr. Kildee. Thank you, Mr. Chairman.
Mr. Kutz, you said that the complaint input system is
fundamentally flawed. Does it need restructuring or just
adherence to the present rules and regulations?
Mr. Kutz. I think it is a combination of improved customer
service. You heard the audio here and the way that people were
treated sometimes. I think it is a matter of tone and the way
you treat people with respect.
And it is also a matter of competence, with making sure
that all the cases are recorded in the system. I mentioned
cases aren't recorded in the system. So, for example, if you
have a repeat employer that is making all kinds of--having all
kinds of issues and you don't record cases in the system, how
can you go back and make sure, when a new complaint comes in,
that that employer hasn't done several other wage theft or
other types of violations?
And so it is a combination of customer service, competence,
and enforcement at that front intake process. And to me, if you
don't do a good job at the front of the process, you don't even
get to the 19 percent necessarily, because some people will
probably walk away and not even file a complaint.
Mr. Kildee. Is there someone within the Department or
agency within the Department, not GAO, but that is in charge of
quality control?
Mr. Meyer. I think there are individuals in Washington that
try to do studies and monitor that situation, but, again,
because complaints aren't recorded into the system at all, it
is difficult to go back and check to see if a good job was done
if there is no record of that call ever coming in.
Mr. Kildee. I know very often if you call a company or an
agency, sometimes you will hear, ``Your call may be recorded
for quality control.'' That is commonly done in the private
sector.
Mr. Kutz. The IRS does that, too.
Mr. Kildee. IRS does that.
Mr. Kutz. I have listened to the call centers in the IRS,
and other federal agencies, I believe, do that to monitor the
quality of the responses people make. And sometimes the calls
are not known. You are actually monitoring someone; they don't
know you are monitoring them, where you are listening for Q.C.
purposes.
Mr. Kildee. I always admit, I have kind of mixed feelings
on that third-party listening, but at least they are concerned
about--the purpose is for quality control. And I don't see a
real concern for quality control.
Every investigator should be impartial. This person calling
in, the person is in a sense a judge and a solver of this. But
many of them seem to be on the side of the employer or have
just worn out in the job and don't care. They come to work in
the morning, and they go home and don't feel like kind of, ``I
have done some justice today.''
You know, if I were talking to one of them, I would say,
you know, the laborer is worthy of his hirer. And each one of
those investigators--how often and how regularly--or are they
at all--is their investigative prowess evaluated?
Mr. Kutz. I am not aware of any internal reviews
necessarily, other internal reviews.
Mr. Meyer. I think that each investigator has internal
metrics based on back wages that they collect, the time it
takes them to enforce a case. But as far as success rates and
how effective they are, that is not part of the metrics, as far
as we know.
Mr. Kildee. So a person could get into a position where
they could just show up?
Mr. Kutz. Yes, I mean. I would caution the Committee, too,
to say just throwing money at this issue is not necessarily
going to solve the problem. You could have more people, but if
they are the wrong people without the right tools, you might
end up with the same result.
So you have got to look at this from a bigger perspective
that you need improved people, processes and systems that will
then--are you hiring the right people? Are you training them
correctly? Is there proper quality control over the work that
they do, et cetera?
So I would just caution, just throwing FTEs at this and,
you know, repeating some of the same things that are being done
now isn't necessarily going to get you a better result.
Mr. Meyer. And I would add that I have interviewed multiple
investigators in the field. And most, if not--I would say many
of them and pretty much most of them are dedicated and
concerned about this issue. So I don't--I think it does get
more to your case of what you said, where they are worn out.
There are a lot of cases they are having to respond to as
rapidly as possible, and there is just a lot of work to be
done.
Mr. Kutz. Well, and that is why technology is important,
too. I mean, you can leverage your resources better if you have
at your fingertips the ability to determine whether a company
is bankrupt or not, where that company is located, what their
revenues are. They don't have those tools right now, from what
we can see.
And so if I were to do investigations for the Congress
without those tools, I couldn't do the job. I couldn't be up
here talking to this Committee and the other committees we work
for with the kinds of investigative findings we have. You have
got to have good technology to be an effective enforcement and
investigative unit.
Mr. Kildee. Now, as far as quality control, we have much
smaller operations. I have 18 people working for me, so it is
much easier to evaluate. But I--every week at our staff
meetings, I say, ``When someone calls us with a problem, we
should not take that as a burden, but as an opportunity.''
And now that might be self-serving for me, because every 2
years I actually get an accounting on my stewardship, right?
But if I find people on my staff who look upon a call as a
burden rather than an opportunity, then I don't want them on my
staff.
And if we could transfer some of that over to the
Department of Labor, that could be very helpful.
Mr. Kutz. Well, I think that is a great point. I mean, the
culture of--is this a customer of you or someone who you are
going to treat with--you know, we have a hotline. We get people
that call in all the time. No matter if they are crazy, we get
people that call and say, ``I am a paranoid schizophrenic. You
know, I have had some sort of an experience.'' But we treat
them all the same.
We don't record them all as cases, because some of them
have issues that have nothing to do with GAO or anything that
we are able to help them with, but we still treat them all the
same, no matter what. And I think that is an important piece of
a culture here that needs to be addressed.
Mr. Kildee. Thank you, Mr. Kutz.
Thank you very much, Mr. Chairman.
Chairman Miller. Thank you.
Mr. Price?
Dr. Price. Thank you, Mr. Chairman.
Some of the--well, I will just comment that all of us
believe that workers ought to be paid honest wage for an honest
day's work. Some of the information that you presented, the one
that was most disturbing was this meatpacker in Modesto,
California, accusing child labor laws being violated and young
people, young children missing school and working on dangerous
machines.
That was fictitious, correct?
Mr. Kutz. Correct.
Dr. Price. So it wasn't true that that was happening?
Mr. Kutz. No. But----
Dr. Price. The fact that the investigator didn't follow up
on it or the DOL employee didn't follow up on it is the point,
right?
Mr. Kutz. Yes.
Dr. Price. We don't want people across this nation going
away from this hearing thinking that children are working at a
meatpacking plant in Modesto, California, without anybody
following up on it.
Mr. Kutz. That is correct.
Dr. Price. Okay.
Mr. Kutz. It was one of our undercover agents.
Dr. Price. I want to just correct the record. Charlie
Norwood, who was a member of this Committee and longstanding
member of this Committee, and passed a couple of years ago, in
fact, did a similar oversight with the use of GAO at the
Department of Labor's offices, workers' compensation offices,
programs and the like, similar issues of incompetency we raised
at that time.
And you would acknowledge that previous work has, in fact,
been done, would you not?
Mr. Kutz. Yes. And I am not familiar with--I am not sure
how far back that goes. The latest report of GAO, aside from
the two investigative reports we did, was a GAO report issued
at your hearing last year in July.
Dr. Price. A couple of your comments that you made, you
said that this is just the tip of the iceberg, that the
complaint intake process--investigation process wasn't
adequate. Do you have any reason to believe that this type of
activity by career civil service employees at the Department of
Labor is any different than at any other Department?
Mr. Kutz. No, not necessarily. I mean, we see----
Dr. Price. So it could be the same at other Departments?
Mr. Kutz. Yes.
Dr. Price. And this--your investigation focused on career
rank-and-file employees within the Department of Labor,
correct?
Mr. Kutz. It focused on the 32,000 complaints that were
recorded by Wage and Hour for fiscal 2007, and it was primarily
related to that, in addition to the undercover calls we made,
which are real-time calls over the last several----
Dr. Price. And the folks who respond to those complaints
are career rank-and-file employees of the Department of Labor?
Mr. Kutz. That is correct. Yes.
Dr. Price. Do you know if any of those folks are members of
a union?
Mr. Meyer. That wasn't a part of our discussion.
Dr. Price. You wouldn't--they may or may not be.
Mr. Kutz. We are not aware of that.
Mr. Meyer. Right.
Dr. Price. We have heard some comments from some folks on
the Committee here that these employees were ``lying,'' seemed
that they were ``worn-out'' or didn't care. Do you know if
these would be the same level of employees that would be
charged with handling, for example, a national health care
program?
Mr. Kutz. Don't know.
Dr. Price. No way to know that?
Mr. Kutz. No.
Dr. Price. So it is possible that folks who are advocating
for something like a national health care program that these
would be the same level of employees that would be answering
the phone for complaints in that area as well, is that correct?
Mr. Meyer. The level of employees answering the phone
ranges from, I think, a GS-5 all the way up to GS-12
investigator.
Dr. Price. Could be the same? Could be the same?
Mr. Meyer. It is a----
Dr. Price. So the prospect--it is curious that some of the
calls that--or some of the recordings that you made or played
for us, one of the employees gave the information to the
individual calling that they had a private right of action.
They could take their employer to court. That was accurate
information, correct?
Mr. Kutz. Yes, correct. They are oftentimes--when there is
a backlog or we say, ``We can't get to your case,'' you can
file a private lawsuit.
Dr. Price. When I call the Federal Government sometimes, I
get that, too. ``You ought to go somewhere else. You ought to
look to somebody else. You ought to try some other avenue.''
So it is wholly likely that folks who would be wanting to
set up a nationalized pension plan, 401(k) plan run by the
Federal Government that the employees who would be responsible
for investigating or answering challenges to a plan like that
would be the same level of employee as these folks, is that
correct?
Mr. Kutz. If they are between what Mr. Meyer said, GS-5
and-12, it is possible. It is just something we don't have any
direct knowledge of.
Dr. Price. So the prospect for allowing the Federal
Government to be more intrusive in other areas of our lives--
health care and financial security for one's family--might be
under the control of folks just like the people, the 19 percent
that have, as some others have said, were just worn-out? Is
that accurate?
Mr. Meyer. It is possible.
Mr. Kutz. It is possible.
Dr. Price. It is possible?
Mr. Meyer. Sure, it is possible.
Dr. Price. Well, as a physician member of Congress, it
concerns me greatly that there are members of the House of
Representatives who are clearly convinced this is exactly where
we need to go, to have the Federal Government running our
entire health care system.
And consequently, it is instructive to look to other areas
that the government controls, I believe, for increasing
education of both members of the House of Representatives,
Congress, and the American people as to what that might look
like.
Thank you. I yield back.
Chairman Miller. Mrs. McCarthy?
Mrs. McCarthy. Thank you, Mr. Chairman. And thank you again
for holding this hearing.
Mr. Kutz, if I remember correctly, July of 2008, we had a
hearing almost on the same subject. Is that not true?
Mr. Kutz. That is correct.
Mrs. McCarthy. And at that hearing, didn't we have
representation from the Department of Labor?
Mr. Kutz. Yes.
Mrs. McCarthy. And if I remember correctly, one of the
statements that was put from the assistant secretary,
Alexander--I am going to pronounce his name wrong--Passantino
touted his division's effectiveness by citing WHD's own
performance statistics and rejected everything that you said.
He also was asked if the Department of Labor was
effectively enforcing our wage and hour laws, and he responded
with an unqualified, ``Yes.'' And I guess I want to--with the
videos that we saw or the voice messages that we saw, those
were random calls that you made. Were they to the same person
all the time?
Mr. Kutz. They were to six offices, the ones I mentioned
earlier, across the country.
Mrs. McCarthy. Across the country?
Mr. Kutz. Baltimore, Miami, Dallas, California, yes.
Mrs. McCarthy. Correct. You have done an awful lot of these
investigations. With that being said, with the investigation
that you made and the telephone calls that your Department made
and the tapes that you heard, would you say this was probably a
fairly large amount of people giving answers that were quite
not true?
Mr. Kutz. It is highly likely there are many others doing
the same thing. You know, the one thing that we can do for
committees like yours is give you an inside look at what a real
person faces when they approach the government, because if we
had gone to their offices and said, ``Hey, we are GAO. We want
to talk to you about how you handle phone calls,'' I don't
expect we have got any of those examples provided to us from
the Department of Labor.
So this gives you a real picture of what it looks like if
you are a victim of wage theft or some other violation of FLSA.
Mrs. McCarthy. And, by the way, I do the same thing. I call
my office to see how they answer the phone.
Mr. Kutz. It is a good process.
Mrs. McCarthy. That is just something--because they are
representing me. Well, let's go on. As we go forward with
this--and I am sure we are going to have another hearing on
this--what do you think needs to be done to ensure all
complaints are at least documented at the Department of Labor?
Mr. Kutz. Well, we believe they should be documented. I
mean, if something is--they get a lot of calls probably that
aren't real cases, somewhat like our hotline. They might call
about something that has nothing to do with a labor law
violation. Those shouldn't be given case numbers.
But everything that comes into the system, like our 10
calls, should be given a case number. And even if they are not
going to work it, they should keep it in the system, because
what if that employer comes back again and has committed
another wage law violation? Then you give off a trend of
information.
If you don't report the information in the system, you
can't do linking of cases. So with our hotline--our FraudNet,
we call it--we give case numbers to everything. And we go back,
and I can determine where there were other Wage and Hour
Division things or Medicaid, Medicare, whatever the case may
be. We can go back and research by person, company, theme, et
cetera, to determine what has happened in the past.
And the first thing we do about a complaint coming in, have
they been here before?
Mrs. McCarthy. Just to follow up on that, my office, my
district office, and my Washington office, anyone that calls
for help, we open up a case file for them, and it goes into our
computer so that we can have a running issue on what we are
doing, what they are doing, and how it ends up in the case
before it is closed.
So I think that we are all trained that way, to basically
make sure that we are tracking our constituents. And each
member has over 600,000 people that we represent.
What do you think, as we go forward, does Labor need to do
to assist the situation and make sure that enough proper
trained people are in place to adequately investigate
allegations of wage theft?
Mr. Kutz. Well, they need to take a top-to-bottom look at
this. It is not necessarily, do they need more people? Which
they maybe do need more people. But it is better trained
people, possibly. Are they hiring--what are the criteria of the
people they are hiring? That is something we didn't look at as
part of this, but that is a valid question. I mean, do you have
the right kinds of people?
Because if you have investigators that are willing to take
a ``no'' answer and just say, ``Okay, we are done,'' I have
investigators that work for me. Not a one of them would accept
that as an answer. I mean, they would at least follow up with a
second question or a--do something besides just say, ``Okay,
thank you,'' and then they call the victim, the potential
victim here, and say, ``We are sorry. We can't help you. They
said no.''
I mean, that is not really an investigation. I am not sure
what you would call that. It is just a thing. It is a phone
call we made.
And so you heard our frustrated victim on the undercover
call saying, ``Is that all you do, just make a phone call?''
And I think a lot of times, with the smaller cases, that is all
that they do.
Mrs. McCarthy. Last question. One of the other things that
we do in our office--and I am going to ask if you think it is
worthwhile to look into that for the Department of Labor,
also--we retrain. Even if someone that has been with me for 13
years, every couple of years, we go through a whole retraining
program, because new techniques are always coming up, new ways
of handling things that were always coming up.
I was just wondering if that would be something that would
be important to do for the Department of Labor?
Mr. Kutz. Yes. Do they do something like that?
Mr. Meyer. Yes, there are annual updates that investigators
go through. I think a focus, though, needs to be shifted in
some cases from compliance assistance and, you know, trying to
go out there and walk the thin--the middle line between the
complaint and the employer--to enforcement of laws. It is an
emphasis on enforcing the laws on the books, needs to be re-
emphasized with investigators every year to make sure they feel
that their job is important and to get it done.
Mrs. McCarthy. I yield back the balance of my time. Thank
you.
Chairman Miller. Thank you.
Mr. Roe?
Dr. Roe. Thank you, Mr. Chairman.
Just a couple of questions. Could you sort of put this in
context about how many cases--you may have said this before I
came in to the room, but I was at another committee hearing--
but how many do they handle a person? Like you said, if you
just answer the phone and say, ``No,'' that is hardly a case.
But just a--I know from my experience and what I have done
in a lifetime, I know how much I can do in a day's work. How
many cases--are these people just overwhelmed with the number
of cases or what?
Mr. Kutz. There are 32,000 cases that were recorded in the
system for 2007. And as I mentioned, a lot of cases don't get
recorded in the system, so we know it is more. We don't know
how many more. And they had 700 to 800 investigators for 2007,
and they had--I think they have roughly about that amount. So
that gives you an idea of the different volumes you are talking
about.
And cases are very different. A case can be one person or
it can be thousands of people. So there is a wide range of what
a case is. So not all cases are equal. Some cases could take
thousands of hours to investigate; some could take a couple of
hours.
Dr. Roe. Well, and to follow up on that, I guess, and to
follow up on some of the other--the questions that we asked was
that--is there any way to measure what kind of job they are
doing? I mean, are there any kind of standards that they are
doing, any oversight that they are doing?
I know some of your testimony said they weren't being very
effective. But is there a way to measure that? We have that in
most of our offices. We have standards, job evaluations, and so
forth.
Mr. Meyer. We measured these cases just based on the
allegation that was filed and whether an adequate job was done
of responding to that allegation and investigating it.
In last year's testimony, the other witness from GAO
provided statements that Wage and Hour has continually shifted
their goals and shifted their metrics they use to measure
compliance so there wasn't a consistent way to evaluate them
over the years.
But for our investigation, it was purely based on the case
we were looking at and whether it was adequately responded to.
Mr. Kutz. But some information they have that is useful, I
think. They say they collected about $220 million in 2007. Now,
again, we know based on our work they probably collected less
than that, because a lot of stuff in the system doesn't ever
get collected, but let's say they collected about $200 million.
That is useful to know. Their budget is about $200 million. Is
that a good ratio? I don't know.
They helped 341,000 employees. Again, we probably think it
is less than that, because we know some people they say that
they helped, they weren't helped, but there are also tens of
thousands, maybe hundreds of thousands they didn't help.
So there is some useful information like that that--and the
thing we don't know, again, getting back to asking you--if they
are asking you for more resources, what evidence do they have
to show you what they will do with those resources and what
return on investment that would be? See, if I was there, I
would say, ``Well, I want to show--if you give me an extra
dollar, how much more can I collect for wage theft or other
types of cases I can work to help victims here?''
Dr. Roe. I agree.
Thanks very much, Mr. Chairman. I yield back my time.
Chairman Miller. Thank you.
Mr. Courtney?
Mr. Courtney. Thank you, Mr. Chairman.
And thank you for holding this hearing, which is a
completely logical follow on to last July's hearing where this
issue was first identified and GAO testified, of course, at
that hearing.
And, also, for the record, for the benefit of people who
are watching this hearing, I think it is important to know that
Secretary Solis submitted a statement indicating that the
Department is now hiring an additional 250 Wage and Hour
Division case workers, which was the result of the 2009
spending bill, which some of us in this room supported and
others did not, but clearly there is now, with the new
administration, movement towards strengthening the workforce
there.
And additionally, there are another 100 workers that are
being brought on as a result of the stimulus bill, the American
Recovery and Reinvestment Act, which the president, again,
signed into law just recently. So there is good news, at least
in terms of the strengthening of the case workers, which has
been identified by some here today as potentially the problem.
The other one issue which we had discussed last July, a
pattern that emerged from your investigation was that the
prior--well, the Wage and Hour Division case workers that were
interacting with complainants, were being told, ``Well, go get
a lawyer,'' as sort of the way to close out the file.
And, again, I just want to ask you a simple question. I
mean, in fact, the mission of the Department of Labor is to
provide free advocacy for workers who have been denied their
wages and, in fact, not to force or direct them to private
representation through lawyers, isn't that correct?
Mr. Kutz. That is an important point, yes. And that gets
back to the issue of resources. And is the mission to serve
only those we have the resources to? Or is it to serve all the
people that come in?
Is the mission to serve greater than 10 numbers of people
or, you know, greater than 7? That is an important issue,
because it appears the reality is they are picking and choosing
who they are able to serve.
Mr. Courtney. And there clearly was an irony in last July,
which was pointed out, which--because the morning of the
hearing in the New York Times, the administration actually put
out a statement saying that, you know, their goal was to, you
know, stop trial lawyers from enriching themselves from this,
and, in fact, the opposite was occurring, which is that people
were being steered towards private counsel as a way of getting
a remedy.
And, again, I think certainly this Committee wants to go
the direction of the original mission of the Department of
Labor, which was to, again, as an administrative agency,
provide people with help without having to incur the expense
and difficulty of retaining private counsel.
Mr. Kutz. Well, and the reality is, if you are one person
making $6 or $7 an hour, how many attorney's fees hours can you
afford?
Mr. Courtney. And I guess the other question is that there
is also a time issue. Now, again, I think throughout some of
the notes you talked about the fact that--I mean, there is a
statute of limitations for bringing a claim, is that correct?
Mr. Kutz. Correct, 2 years from the time of the violation,
yes.
Mr. Courtney. So if you filed a complaint, you are waiting,
you are waiting, and then the case is closed out by saying,
``Go get a lawyer,'' I mean, the fact is, is that you are--that
scenario makes it even worse for people.
Mr. Kutz. Right. Sometimes the clock runs out, and
employers know that, and some of the egregious ones stalled,
and eventually the case went away with no collections.
Mr. Courtney. And, lastly, just looking at the locations of
where some of these cases were--took place, I mean, I am
seeing, you know, from the West Coast to the East Coast and in
between. I mean, the fact is, is that this seems to be a much
more widespread problem than one field office from, again, just
the report that you have submitted here. I mean, is that a safe
conclusion to make?
Mr. Kutz. I think we have done enough work to say that,
yes, this is a national issue. We can't say every single office
has the same problems, but there are many, many offices that
have these types of problems, yes.
Mr. Courtney. Great.
Thank you, Mr. Chairman.
Chairman Miller. Thank you.
Mr. Sablan?
Mr. Sablan. Thank you, Mr. Chairman. And thank you for your
leadership on this very important issue.
Thank you, Mr. Kutz and Mr. Meyer.
I am trying to learn something here. In your undercover
testing, how did you arrive at the types of jobs to use to
determine? This was very thorough, and I am trying to----
Mr. Kutz. Yes----
Mr. Sablan [continuing]. Was there a certain, you know,
scientific testing you--or process you did? I am trying to
determine if these are--if the lack of attention given to these
cases are because they are for certain types of jobs or a--
those making so much money per hour, or if they are, you know,
minimum-wage-earners or--where is the lack of attention? Is it
just endemic throughout the system for----
Mr. Kutz. The undercover calls we made were what we thought
were common complaints we had seen in the database. And the one
was the child labor one. I will just give you the other--some
examples. We did dry cleaners, convenience store, dishwasher,
janitor, painter, lawn mower service. Those are pretty typical
of what we have seen in the database of legitimate complaints
coming in.
So we tried to recreate what would be a legitimate
complaint and legitimate scenarios out there.
Mr. Sablan. And this was done throughout the nation?
Mr. Kutz. Yes. Again, six offices, Baltimore, Birmingham,
Dallas, Miami, San Jose, and West Covina, California. Those
were the six offices we made those 10 calls to.
Mr. Sablan. Thank you, Mr. Chairman.
Chairman Miller. Thank you.
Ms. Titus? Congresswoman Titus?
Ms. Titus. Thank you, Mr. Chairman.
Gentlemen, you were asked if you have any evidence that the
employees of the division had deliberately been told to
mishandle cases. And, of course, the answer is no. But I have
often found that lack of resources and capricious enforcement
are generally the result and reflection of administrative
priorities.
So let me ask you that same question just a little bit
differently. Do you have any evidence that the professionals in
the Department, who should know what is needed to be effective,
requested the resources or the tools that you say that they
need?
I mean, those tools seem to me to be pretty obvious. You
are talking about training in customer service, recording of
cases, access to information on bankruptcy. Is there any
evidence that they were trying to do the best job that they
could to serve these workers, help them get their wages?
Mr. Meyer. I think speaking specifically to the information
technology, when we raised the issue initially in our first
audit and then in this follow-up audit, it seemed to be a new
idea to the management in Washington, at the headquarters
level, for Wage and Hour that it didn't--it wasn't something
they had explored in the past. So I don't know if--I don't know
if they considered it before this point.
Ms. Titus. And that is just shameful, it seems to me, a
real derelict of duty, I think, because I believe it should be
critical to use all the tools possible to help people get their
wages. And that is why I am so pleased to have your report and
that the chairman is making this a priority.
Just one other kind of more technical question, too. You
mentioned that, in states where you have strong enforcement of
labor laws, you have a better result at the national level. I
know in Nevada we have had some serious problems. Are there any
things that we can do legislatively or as we look at the
operations of this division and that relationship with states
to improve the situation, so that even if you have a weak link
at the state level, we can make it work better?
Mr. Meyer. I think when Wage and Hour reassesses their
staffing and the allocation of resources, it should be
important for them to consider states with, let's say minimum
wages that are higher than the federal minimum wage. That makes
a big difference on if the Federal Government should take a
case or if the state should take a case.
So that needs to be an important part of their
consideration, because more resources are likely going to be
needed in states where there is no state agency that can assist
complainants.
Ms. Titus. Okay.
Thank you, Mr. Chairman.
Chairman Miller. Thank you.
Mr. Hare?
Mr. Hare. Thank you, Mr. Chairman.
I am not here today to finger-point and look backwards too
much, but I think it really is important to point out to people
that are watching this, the former Secretary of Labor, I saw
her two times. I am in my second term. Once was in the back of
a car with her husband at a parade running for re-election,
Mitch McConnell, and the other was when President Obama was
sworn in.
I have not seen her at this Committee. But she sent the
acting administrator, Alexander Passantino, I believe, who just
basically said that you guys didn't know what you were talking
about.
Also, which I--by the way, I couldn't disagree with him
more. I think you clearly do.
Also, you have a Department of Labor that significantly cut
funding for the Wage and Hour Divisions. And I am not
suggesting that we throw people into a position and that you
are going to solve this entire thing by having more people, but
I do know that, when you cut the funding for the Wage and Hour
Division, problems are going to occur.
And, you know, I just find this, especially when you are
talking about people's salary, an honest--as mentioned, you
know, an honest day pay for an honest day's work, I find it
almost unbelievable that people would do that and would treat
people like that.
And then, just lastly, before I have a question, you know,
we are going to have comprehensive national health care. And
for the people watching this hearing today, I can assure you
that for those 47 million Americans that don't have it, I don't
think they are going to have to worry about who is answering
the phone. I think they are going to have something at least
that they can go to the hospital and get taken care of.
My question to you, your investigation revealed an
ineffective Wage and Hour Division that discouraged wage theft
complaints. But in the situation when complaints were recorded
and assigned as a case to an investigator, they were often
adequately investigated.
To me, this indicates that many of the problems at the Wage
and Hour could be fixed by the dedication of more resources and
a labor secretary with the will to address wage theft
complaints.
What are your thoughts on community partnerships, in other
words, with--you know, partnering up so that more people can be
served and in a timely fashion and with respect?
And, by the way, I just want to say, I apologize for
getting here late. I didn't hear the complaints. But after
listening to you testify, I can imagine just how egregious they
were for people. Whether they were fictitious or not, the fact
of the matter is, the person on the other end of the line
didn't know that.
So I am wondering what you think about community
partnerships, knowing the shortage of the staff and some other
things, and maybe working with some nonprofits?
Mr. Kutz. I think that makes sense as part of an overall
strategy for how they are going to address is, along with the
states, as Mr. Meyer mentioned. If we have effective
enforcement of states, it frees up the federal offices across
the country to maybe take on bigger cases and not worry as much
about the smaller cases.
So partnership and leveraging resources--and I agree with
you that just throwing money at this isn't necessarily the
answer. Part of the money needs to go to technology. Part of
this needs to be better processes, maybe even a better phone
system for handling the complaints that is much more customer-
friendly.
So it is a bigger picture, I think, than just putting more
people on this. But community partnerships and working with
states and others, it makes perfect sense to me.
Mr. Hare. Do you think that the problems at the Wage and
Hour are causing wage theft victims to not file complaints? In
other words, when they hear that people are being treated like
this or they get treated like--do people just start saying,
``It is not going to do me any good to make the phone calls, so
I am not even going to give them a call''?
Mr. Kutz. Yes, I mean, actually, those 10 cases, we made
115 calls, and 76 times it went directly to voicemail. And
frequently we never got a call back. We had to call month after
month to try to get them to call us back.
So I think some people would give up eventually. So I
really believe that what you said is true, that some people are
not filing complaints because of that. And I mentioned that in
my opening statement, also.
Mr. Hare. And that would be--I mean, that is really a
tragedy they are not filing a complaint because they just think
it isn't going to matter.
Mr. Kutz. Right. And they don't--they are making, like I
said, $6, $7, $9, $10 an hour, and getting an attorney is going
to be a challenge.
Mr. Hare. Let me just ask you this. I am almost out of time
here. What are the one or two things that we can do, that this
Committee, this Congress can do to make sure that ordinary
people when they call in have at least a fighting chance to be
able to get the wages that they feel they have been denied and
that they have coming, so that they have, you know, as I said,
for ordinary people, bureaucracy is tough enough as it is.
So what can we do as a committee and a Congress, do you
think, to help these people out? Because the bottom line is, we
can finger-point all we want to, but it is helping the ordinary
people out.
Mr. Kutz. I think one of the things legislatively we saw
was that the 2-year statute of limitations sometimes when cases
are ongoing end up running out because either they start late
on the investigations at the Department or the employer stalls.
Looking at specific targeted ways to possibly look at
legislation in that area we are going to probably put in our
recommendation and a matter for the Congress to consider.
We don't make policy, but we offer to you to consider
policy. I think that is a situation where you could consider
policy.
The other thing I would say is, again, not walking away
from this--and as Chairman Miller said--consistent oversight of
this until you are satisfied that the systems, processes and
controls in place are good and we could even go back for the
Committee at some point in time and do similar tests to what we
did this time and see if they do better.
Mr. Hare. Thank you very much.
I yield back, Mr. Chairman.
Chairman Miller. Thank you.
Congresswoman Woolsey?
Ms. Woolsey. Thank you, Mr. Chairman.
Last session, my subcommittee, the Subcommittee on
Workforce Protections, held a hearing on the lack of
enforcement by the Wage and Hour Division of child labor laws.
There was evidence to the contrary, but the former acting
administrator, Passantino, testified at the hearing that child
labor complaints were the division's top priority. And he said
that more than once.
So in that regard, what did your investigation find? And
what recommendations do you have for improvements in that area
of child labor and including farm-worker children?
Mr. Kutz. With respect to child labor, you know, one of our
undercover calls was a child labor call, because we knew that
was a priority of the Labor Department. And their policy, I
believe, or practice, at least, is that even if it is an
anonymous tip, that they are supposed to open a case and look
into it.
So we planted an undercover call with them that kids were
working during school hours, operating circular saws, meat
grinders at this meat plant. And when we went back to look in
the system, it wasn't anywhere. It wasn't recorded in the
system. They hadn't done anything with it.
And so they were concerned about that, too, because they
don't--they agree with your statement that that is a top
priority. But the reality was, in that case, they didn't do
anything.
We had seen a case like that last year, too, that was a
child labor law complaint. So we don't have a lot of
experience, because not a lot of the actual recorded items in
the system are child labor complaints, but in several cases now
we have seen that maybe it is not such a priority if they are
not actually following up.
Ms. Woolsey. And if there was a scattering of instances
like this, you have to know there are many, many more, right? I
mean----
Mr. Kutz. Certainly. I expect there are several others.
Ms. Woolsey. That was--yes.
Mr. Kutz. I mean, you have to believe that.
Ms. Woolsey. Well, then what is the deal? I mean, it comes
from the top. So now with a new administration and a new
Secretary of Labor, and then there will be new deputies and new
heads of Departments, and with a new attitude, is that going to
be enough to change this? Or is it really that the short-
staffed, under-trained, lack of motivation, I don't--lack of
tools? I mean----
Mr. Kutz. I think it is----
Ms. Woolsey [continuing]. You can't make somebody do the
job they are supposed to do if they don't have the tools to do
them.
Mr. Kutz. I don't think you can point at one thing. I
think, if you just focus on throwing staff at it, it is not
going to solve the problem. That is one element possibly here.
But as you mentioned, culture is one thing. The right
people, enough of them. Are they properly trained? Do you have
good processes in place?
An example of that is, you know, if you accept the neighbor
saying, ``Well, the company is bankrupt,'' and then you walk
back to the office, you close the case, and say, ``Yes, they
are bankrupt,'' well, we had cases like that.
Ms. Woolsey. Right.
Mr. Kutz. And then we went back and looked in the system,
and the company is not bankrupt. They just moved or they
actually didn't have trucks there that day or something like
that.
I mean, that is a matter of just bad processes. You should
have a process that you are going to validate--if you are going
to say in the system that someone is bankrupt, you should
validate that with independent evidence that that, in fact, is
true before you drop the case.
Ms. Woolsey. So are there training programs that you, in
your survey, were there employee training programs that would
help the employee know how to research whether a person was
bankrupt or not? Or do we just assume that person is supposed
to know these things?
Mr. Meyer. Based on the investigators and technicians we
talked to, their training in that area relates to looking it up
on public searches, if a local court keeps their records online
or if there are some Google search results that will find a
business.
It doesn't get to the level of sophistication that we have
with public court records, federal court records, LexisNexis,
some real robust technology. And I would also say, for child
labor complaints, one way to make sure that they are dealt with
is to force people to record the complaint when it comes in,
because then there is at least a record that it is there.
And I think it would be very hard for management at the
Department of Labor to ignore those cases. And I think they
really genuinely are concerned about them. But if it never
makes it into the system and it is not on their database, no
one knows about it.
Ms. Woolsey. How about farm-labor kids? Was there anything
in your survey, your report about them?
Mr. Meyer. Our statistical sampling didn't randomly pull up
any farm labor, Migrant and Seasonal Worker Protection Act
cases. However, through interviews in the field, we did see
that a number of offices at the Department of Labor take time
out of their year to specifically investigate MSPA cases.
So it is an emphasis at Department of Labor how effective
it is. Unfortunately, it just wasn't pulled up in the random
sample, so it wasn't a large enough percentage for us to look
at.
Ms. Woolsey. Well, Mr. Chairman, I would believe, with
Hilda Solis as the new Secretary of Labor, that farm kids are
going to have a lot more emphasis than they have in the past,
and children in general.
Thank you very, very much.
Chairman Miller. Thank you. It is the intent of the chair
that this Committee hearing will end at noon, but we will have
a second round, if members want to participate.
One of the things that concerns me in this construct is the
person who may be most financially vulnerable to lost wages, in
terms of major disruptions in their life--they could lose a car
payment, they could lose a house payment, they could lose their
rent, they could be evicted--they are the person that really
has the least--has no margins for error.
So you lose $800 in a paycheck, whether that is, again,
over a week or 2 weeks, whatever period of time that paycheck
has come in for, you lose that $800, you don't have margins.
Turning to an attorney isn't really an option for an $800 case.
And yet those are the cases that are quickly reconciled, either
yes, no, maybe, thank you very much.
So they get the least resources focused on them, and yet
they are the most vulnerable. There is something wrong in that
system. I understand why you would do it, because if somebody
is withholding--failed to pay a couple of million dollars or
hundreds of thousands of dollars, that seems more important,
unless you happen to be that person that lost the $800
paycheck.
So it seems to me you have an obligation to do a very
thorough investigation, maybe not terribly time consuming, but
a very thorough investigation at the outset for that
individual. Does that make any sense? I mean, the system seems
to be tilted a little bit away from the average worker in the
occupations that you cited.
Mr. Kutz. Yes, the system is tilted away. And it gets back
to, what is the mission? Is the Department willing to spend
$3,000 to collect $800 for an employee? And that isn't just--
you can't just look at it as a cost basis, too. You look at
future compliance and things like that. So just working to make
sure that these employers know that they will go after some of
those smaller cases can also help future compliance.
But the reality now is they are kind of picking and
choosing, it appears, because of issues with resources and
technology and whatever the case may be.
Mr. Meyer. I would also add that, for conciliation
specifically, right now Wage and Hour's policy is to make one
or several phone calls. And if it doesn't result in
collections, they drop the case at that point.
And most of the time, those are actually effective. The
ones that we looked at in the database, most of the time a
normal employer will comply once they have been told they have
broken the law in some area.
But the ones that don't should be raised to the level of a
full investigation and followed up on. So you can have a rapid
response and a more thorough response in those limited cases.
Chairman Miller. And, Mr. Meyer, I assume you are saying
that, given your--that maybe some of these people aren't the
best trained in how to be the most effective on the phone or
what resources they should bring in advance to that phone call.
Maybe a little bit of work before the phone call and you speak
with more authority, possibly.
Mr. Meyer. True. There is very little work done before that
first phone call----
Mr. Kutz. Well, not only that. I mean, you did hear some of
those. They simply said, ``Are you willing to pay?'' The answer
was no. ``Okay.'' I mean----
Chairman Miller. So the employer steals $800 out of my
paycheck, whether it is overtime or regular pay, and the
likelihood maybe is that nothing will happen. That employee
steals $800 out of petty cash in that company, and that
employee is going to jail. In all likelihood, that employee is
going to jail.
So you steal it out of their paycheck, you go past jail.
You are free. You steal it out of petty cash, you are going to
go to jail.
I mean, somehow there has to be an initial investigation
that understands what took place here. This isn't--you know, in
many of these--this isn't a bookkeeping error. This is a
conscious decision not to obey the law.
Mr. Meyer, you talked about--they have to understand they
are there to enforce the law, the minimum wage law, the
overtime laws, you know, the hours worked, all of those things.
So a conscious decision in many of these instances is
simply made not to pay these individuals. A conscious decision
to rob that business and you have two different--you have two
different outcomes.
Mr. Kutz. Right. If you have a situation now where
employers know probably that, worst-case scenario, they may get
investigated and, if so, they might have to pay what they owed
in the first place, I mean, so you have that kind of a system
out there----
Chairman Miller. There is no penalty.
Mr. Kutz. There is no penalty.
Chairman Miller. You steal from the employee, there is no
penalty. You steal from the employer, you go to jail.
Mr. Kutz. You are not going to get criminal, sure. There is
no criminal. And so worst case, you pay what you owe, and
sometimes you compromise it down to something less than you
owe. So it is a system with minimal teeth to it at this point.
Chairman Miller. And there are 30,000 complaints in this
system in 2007?
Mr. Kutz. Correct.
Chairman Miller. We heard when you were here in July from
Wage and Hour that they suggested that they resolve 93 percent
of their cases, where employers agreed to pay. Does that mean
they got 93 percent of the wages that were wrongfully taken
returned?
Mr. Kutz. No. No.
Chairman Miller. What does that mean?
Mr. Kutz. Well, that is what is recorded in the system. As
I mentioned for our undercover calls, in several cases, the
employer initially agreed to pay. And several weeks later, our
fictitious employee called back and said, ``By the way,
investigator, they never paid me.'' We went back into the
system several months later, and all those cases showed that
the case was actually paid.
So they are recording as paid if the employer says, ``I
paid,'' but they don't go back to follow up or, even if someone
calls and says they never were paid, they don't go back and
change the records.
Another important thing is----
Chairman Miller. So not only now is the employer stealing
from his employees, he is now lying to the government?
Mr. Kutz. Correct.
Chairman Miller. To the enforcement agency?
Mr. Kutz. And we are recording it as a successful case,
even though he didn't pay.
Chairman Miller. Right. Yes, I would say we have a cultural
problem here, if that is success. I don't think that is success
for anybody on this Committee.
Mr. Kutz. The other thing I wanted to mention on that, too,
there is another case that we saw, too, that is very
interesting. The actual amount owed was $150,000, but the
amount assessed ultimately was $78,000, so it was compromised.
What they recorded in the system was assessed $78,000, paid
$78,000.
So in that case, it appeared that 100 percent was paid. The
reality is, 50 percent was paid, because they owed $150,000. So
you always have to get behind these numbers like 93 percent and
say, is there something more to the story than 93 percent?
So you have several factors. I am not saying they are not
collecting hundreds of millions. They probably are. But that
number is probably overstated based on a number of cases we
have seen.
Chairman Miller. You know, you touched upon also the issue
that about money and workload and the rest of that. It is kind
of interesting that, as I look at the chart here, I think this
is from CBO--the money went down 4 percent--a little--4.2
percent from 2001 to 2008, but the full-time employees went
down 21 percent, 21 percent, 22 percent, 23 percent.
So, I mean, it wasn't--apparently, you know, it wasn't
money. They just decided they were going to--I don't know if
these people went somewhere else or whether they were
discharged or what have you, but the numbers in the
Department--in the Wage and Hour Division, the employees went
down continuously over this time 21 percent, but the money to
the appropriated dollars didn't go down.
Mr. Kutz. Right. The number of investigators has gone down
from 1997 to 2007 by 20 percent to 25 percent, in that range.
Chairman Miller. Right.
Mr. Kutz. Correct.
Chairman Miller. Let me ask you--one of my colleagues
raised the issue of the statute of limitations. This clearly
works absolutely against from--at least my conclusion is, from
looking at these cases, if the Department is not efficient,
they are working on my time if I have a statute of limitations
running against me and my ability to recover.
Is there--have you thought about what the alternative would
be for starting the statute or----
Mr. Kutz. Well, we believe that--we were going to put a
proposal into our report that has recommendations for a matter
for Congress and to consider whether or not the statute should
be extended. I am not sure what the right wording necessarily
or how you would write the bill.
In certain cases where there is a legitimate claim, Wage
and Hour is investigating it, but the clock stops ticking, and
that would be something that would help not only the Wage and
Hour Division, but the victims who we see oftentimes get
nothing----
Chairman Miller. You would hold that during the
investigation?
Mr. Kutz. Yes, yes, I think that is the right term. I--yes.
Chairman Miller. Yes, okay. And so then, if they did a good
job--maybe I get my money back----
Mr. Kutz. Yes.
Chairman Miller. If they didn't or they refused to or
whatever the case was, I still have my right, if they used up 6
months of the time, I still have my full 2 years to proceed
against the employer and have time to do that?
Mr. Kutz. Or at least more time, because let's say it takes
you a year to get to the first point. You would at least have
an extra year. It depends on how you write the bill or how you
would write that legislation, but, yes, you would have time to
see if Wage and Hour could resolve it. And if they can't, you
would still have at least a period to file your own lawsuit.
Chairman Miller. When you look at other agencies, are there
agencies that have better models in terms of measuring outcomes
and user-friendly, customer-friendly systems in intake and
initial investigations that the Department of Labor should be
looking at?
Mr. Kutz. Well, I thought the interesting idea--and I don't
remember which member it was that mentioned the monitoring of
the calls to determine whether people--how people are handling
the actual people--that is an interesting idea. I have seen--at
IRS, I have observed how they do it.
And I think in that case they know that they are doing it,
or at least randomly doing it, but it keeps people on their
toes and it makes people know that we are measuring this as one
of the considerations in your job rating and the pay for
performance you are going to get or whatever raises you might
get.
So that was an interesting idea, I thought, that could be
used on the complaint intake process.
Chairman Miller. That would also let you know whether or
not that case was entered into the system so that you would
have follow-up or you would have data about that employer or
that industry or the rest of it, would help you develop
reliable data if that phone call was matched to a decision.
Mr. Kutz. Yes, you have to hold the Department of Labor
accountable to make sure that all legitimate cases are entered
into the system, because otherwise Congress doesn't have a very
good idea of what kind of work is not getting done.
It would be nice for you to know that there were 6,000
cases, or whatever the number is, that they just didn't have
time to get to.
Chairman Miller. You have----
Mr. Kutz. That would be an important metric.
Chairman Miller. You have mentioned the IRS. Do you know of
other agencies that have done that or----
Mr. Kutz. With respect to metrics or other processes?
Chairman Miller. Monitoring calls or----
Mr. Kutz. I would have to think about that. We could
certainly think about that and get back to you no that.
Chairman Miller. Thank you.
Mr. Roe?
Dr. Roe. Thank you, Mr. Chairman.
Obviously, when you see an investigation like this, it is
embarrassing, when you see a performance that is this poor. My
bet is, there are a lot of people that are doing good work,
too. And I suspect----
Mr. Kutz. We agree.
Dr. Roe [continuing]. That there are a lot of good people
who go to work every day and try to do their job correctly. And
it would look to me like--and I have been in the private world
my entire career, except for the last 90 days, and it would
look to me like that it would be easy to ferret out or, with
the proper supervision, who these essentially bad actors are
that are not doing their job well.
And, you know, this is just not acceptable to have a
citizen of the United States call in to one of our Departments
and be essentially just blown off. And, I mean, it doesn't look
to me like a terribly difficult problem to fix.
And like you said, whether it is--throwing more money at it
may not be. It may just be having some requirements, some
oversight. And I think having these random calls that are
fictitious come in is a good idea. That is a way to find out if
it--and it may be just a few people that you are--I don't know
whether you got to the same investigator each time or not, but
that would be a pretty easy thing, I think, to hone in, I bet.
Mr. Kutz. Well, what you are getting to, too, is the
possibility of agencies testing themselves. You know, we have
tested, for example, airport security by the TSA using--trying
to get improvised explosive devices through the checkpoints on
the aircraft. They test themselves, also. I mean, this is a
case where you could have a unit set up in quality control that
makes various calls just to see how they are handled.
I think some of the members here have said even they call
their own telephone system to see how their employees are
handling potential constituents.
Dr. Roe. You know, I think it would be--obviously, you
all--we all know the story of the one mailman who is dumping
the mail in the garbage truck so he doesn't have to deliver the
mail, and it may not be a deep problem, but it is a problem.
And it needs to be solved.
And I think there needs to be a mechanism to do that and
report back to this Committee.
I yield back my time, Mr. Chairman.
Chairman Miller. Thank you.
Mr. Kildee?
Mr. Kildee. Thank you, Mr. Chairman.
Thank you, gentlemen, for all you have done. I am the one
who mentioned the monitoring of calls, and that is--I ask this
question in conjunction with that, but other things.
What needs to be done to ensure that all complaints are at
least documented at Wage and Hour Division, both technological
things and personnel things? What can assure us that they are
at least documented?
Mr. Kutz. Well, sorry I didn't give you credit for that. I
had lost track of who actually made the comment, but it was a
good idea nonetheless.
I would say that they need to make sure that they have
written policies and training, that it is a requirement that
when a legitimate case comes in the door, not a case that has
nothing to do with any violations, cases that are within their
jurisdiction, things that whether they investigate or not, they
need to know about, the policy should be to record it in the
system.
Policy guidance was sent out in the southeast region that
conciliations or the smaller cases are not to be recorded in
the system if they are failed. That needs to be changed. Those
cases need to go in the system so there is a record that that--
even if you didn't investigate it, that that employer committed
a potential labor law violation so, if they do another one, you
can go back and research in the system, say, ``Hey, they have
been here before. Maybe this should become a bigger case now,
because we have had three or four complaints come in.''
So it needs to be a requirement, a policy, and it needs to
be training.
Mr. Kildee. Thank you, Mr. Chairman.
Chairman Miller. Mr. Payne?
Mr. Payne. Thank you very much.
Since I missed most of the--all of the testimony, I will
pass this time. Very rare for me, but I will do that at this
time.
Chairman Miller. [OFF MIKE]
Mr. Payne. All right. Thank you. Next time I will have
twice as much time.
Chairman Miller. You have credits this time.
Mr. Payne. All right. Thank you. Thank you very much.
Chairman Miller. Mr. Hinojosa?
Mr. Hinojosa. Thank you, Mr. Chairman, for having this
hearing. I apologize that I was not able to be here at the
beginning of this session, but I have a great deal of interest
in the subject that was being discussed here today.
I would like to ask you about conciliation. What is the
percentage of conciliations you estimate are never reported?
Mr. Kutz. There is no way to know. But in the southeast
region, as I mentioned, which gets 50 percent of the--57
percent of the recorded conciliations, the policy has been, if
it is not successful, you don't record it in the system. So it
certainly is hundreds, potentially thousands. We just--since
they are not recorded, there is no way to know.
Mr. Hinojosa. What remedies would you suggest to improve
the timeliness of processing complaints?
Mr. Kutz. Processing of conciliations or----
Mr. Hinojosa. No, just complaints that are brought to you.
What do you suggest so that it will be more timely at--there is
a response?
Mr. Kutz. Well, that is a big issue. And many of the
regions around the country have known backlogs that are 8
months, 10 months, 12 months, whatever the case may be.
Those are region-specific issues in some cases. In some
cases, they are national issues. So I think, on a region-by-
region basis, they have to assess whether they have sufficient
staffing on board.
And they have standards for how quickly they intend to get
to cases and investigate cases. They need to make sure they
have sufficient staffing, technology and training so that they
can meet those. And right now, many regions--and Mr. Meyer
could probably add comments on some of the regions that had the
most significant problems--many regions don't meet those
standards.
Mr. Meyer. Right. I would say, looking at the different
offices we interviewed with, some have adequate resources and
are responding--you know, a caseload for an investigator might
be three or four cases, whereas in a different part of the
country someone has 8 to 10 cases on their desk and, when they
get the case, it has already been 6, 8, sometimes 12 months
since the complaint was originally filed.
So there needs to be a review of where the resources are in
the Department of Labor, where they need to be shifted to, and
then, after that review has been done, decide if there are more
resources that need to be allocated.
Mr. Hinojosa. I know that you all have worked very hard.
And based on the calls you made, what are some of the key areas
that need to be addressed, in your view, to better serve low-
wage workers, hourly workers who are calling with allegations
of wage theft?
Mr. Kutz. Well, I mean, first of all, calls need to be
returned. And a lot of calls were not returned. We went to
voicemail, and they didn't call us back, so at a minimum you
should at least call people back.
We mentioned recording cases in the system, following up to
make sure that, if an employer agreed to pay, that they
actually pay, and if the employer reneged on an agreement to
pay, you go back into the system and you correct the system to
say that employer refused to pay and they did not pay.
It is a matter of customer service and the quality of the
investigations that are done, but I think one of the big things
you need to consider is making sure that people are handled
with dignity, respect, and timely responses with respect to
their allegations.
And if they can't get to their allegations for several
months, they have to be told that upfront. And in some cases,
they are. And as Mr. Meyer mentioned, some offices, they are
very prompt getting to people, because they appear to have
enough staff in place. Other ones are so overwhelmed, I think
those are the ones that they are not even calling back people
in some cases.
Mr. Hinojosa. Knowing that it takes maybe months to address
all the complaints, what types of problems did you identify
that could be causing victims to get discouraged and not want
to call again or notify WHD of their complaint?
Mr. Kutz. Well, if someone tells you that, if you file a
complaint your employer might fire you, that would discourage
me from probably filing a complaint. So, you know, just some of
the phone calls we played or people lying--I mean, you know,
that was just one case. But it was discouraging that someone
would actually lie to us and say they checked with the IRS, and
they found that our fake company was below $500,000 in
revenues.
So be truthful with people, be straight with them, and
handle them with dignity and respect, is the way we would
suggest that they handle it.
Mr. Hinojosa. And being that my time is almost running out,
give us a recommendation for improvement. What do you believe
the mission should be of WHD?
Mr. Kutz. I think it should be a combination of--
encouraging volunteer compliance. The vast majority of
companies in this country are going to want to do the right
thing. And you handle them differently than the minority, which
is going to either want to violate the law or be on the fence
and, especially in tough times like this, maybe say, ``Hey, I
can stay in business 2 more months if I don't--if I stiff a few
employees,'' kind of a thing.
And so you have got to handle the enforcement side
aggressively, which I think helps enforce or actually encourage
future compliance, but the vast majority of companies that are
trying to comply, as Mr. Meyer said, if you call them up, tell
them that they have violated the law, they owe money, they
actually pay.
Mr. Hinojosa. Thank you.
Thank you, Mr. Chairman.
Chairman Miller. Thank you.
Mr. Hare?
Mr. Hare. Thank you, Mr. Chairman.
Just trying to wrap my mind around what the chairman said
about, if somebody steals $800 from the company, they are going
to jail; somebody steals it from the employee, you know, you
are lucky if anybody does anything about it.
This question may have been asked and answered, and I
apologize if it has, but I am trying to get from your
perspective, for the people who do the kinds of things that
they are not supposed to do--they hang up or they return--you
know, what is the recommendation to be able to weed these
employees out so that they don't continue to do what they have
been doing, which is either not talking to these people,
hanging up on them, giving them false information, et cetera?
So from your perspective, what does Wage and Hour need to
do to identify these people and then to get people in there
that are actually going to be able to get the job done so that
ordinary people can get that $800?
Mr. Kutz. Well, the 10 we did that were played at the
beginning of the hearing, management has asked for the names of
those people and the information we have. And we will share
that with them. The individual that lied we have referred to
the Office of Inspector General.
With respect to the other things we have talked about here,
such as the--Mr. Kildee talked about the potential monitoring
of this, et cetera. Those are ideas where you could do enhanced
quality control procedures to weed out the employees that don't
perform, that don't treat people well on the phone, who don't
make phone calls back, or who do poor investigations.
So having a better quality control system in place,
performance management system, and then, again, hiring and
training people, are we--what kind of people--we didn't look at
that. But what kind of people are they hiring? What kind of
training are they giving them? What backgrounds are they?
You know, when we hire law enforcement people, for example,
as our criminal investigators with former executive branch
experience. Those are people that have actually worked out
there in the law enforcement field. They have served warrants.
They have arrested. They have done undercover work before.
So we bring in people with very specific qualifications. Or
our auditors and analysts, we look for very specific
qualifications. I don't know exactly what their hiring is, but
it is important to target the right people.
Mr. Hare. Thank you.
Thank you, Mr. Chairman.
Chairman Miller. Thank you.
Thank you very much for your testimony this morning and for
your investigation. And if you will thank your co-workers who
participated in this, I would appreciate that. And thank you
for all of the work that your office does on behalf of the
taxpayers in this country and the committees of Congress. We
appreciate it.
And we would like to be able to continue to use you as an
intellectual resource here, as we think about what changes make
sense and not, and go forward on this problem. Thank you.
With that, the Committee stands adjourned.
Take 21 days, 14 days for submit statements--all the usual
unanimous consent requests are granted to the minority for
today.
[Whereupon, at 11:48 a.m., the Committee was adjourned.]