POLITICS

How Elaine Chao's Labor Department Failed To Protect Low-Wage Workers

When Donald Trump's transportation secretary nominee led the Labor Department, auditors found it wasn't performing one of its most basic duties.

11/30/2016 04:00 pm ET

Watchdogs with the Government Accountability Office set up a sneaky test for the Labor Department in 2008. They wanted to know how well the agency was investigating complaints of wage theft and child labor ― some of its most fundamental responsibilities ― so they filed a bunch of fake complaints, then checked to see if investigators actually looked into them.

The findings were not pretty. A devastating report issued by the GAO, which is the official investigative arm of Congress, detailed how the Labor Department’s wage-and-hour division mishandled nine of the 10 fake complaints that were filed. They discovered “sluggish response times, a poor complaint intake process, and failed conciliation attempts, among other problems.”

“In one case, [an] investigator lied about investigative work performed and did not investigate GAO’s fictitious complaint,” the congressional testimony states. “At the end of the undercover tests, GAO was still waiting for [the department] to begin investigating three cases — a delay of nearly 5, 4, and 2 months, respectively.”

The findings weren’t any more heartening when the watchdogs looked into real complaints. Auditors found 20 cases that weren’t handled properly, affecting more than 1,000 workers. In many of those cases, workers waited more than a year after filing their complaint before hearing back from an investigator.

When the investigation began, the Labor Department was helmed by Elaine Chao, who served as labor secretary throughout the presidency of George W. Bush ― the only Cabinet member of his to serve such a long time. On Tuesday, President-elect Donald Trump tapped Chao to be his transportation secretary.

Chao’s strong establishment ties bode well for her confirmation. (In addition to her long resume, which includes being CEO of United Way, Chao is married to Senate Majority Leader Mitch McConnell.) If confirmed, she’d head the agency at a critical time, as Trump has said he hopes to get a major infrastructure bill through Congress.

A lot of Democrats and Republicans want Trump’s administration to include people with more of a government background, so Chao’s experience working within the Washington bureaucracy is a major asset. But the GAO report doesn’t reflect well on that experience.

Investigating wage theft complaints is one of the most basic duties of the Labor Department, which is tasked with enforcing minimum wage, overtime and child labor laws. Many low-wage workers who’ve been shorted on pay or forced to work off the clock are afraid to file complaints in the first place. If they do, they need to have the confidence that investigators will look into their claims and recoup any wages they may be owed. 

In the most damning anecdote in the GAO report, auditors called to file a fictitious complaint in California about several children working in a meatpacking plant during school hours. The auditors went so far as to say the kids were operating meat grinders and circular saws. Dangerous child labor is supposed to be the agency’s gravest concern.

But when the GAO did its audit, it found that the complaint was never investigated ― and that it never even went into the agency’s complaint database.

In another case, GAO auditors pretended to be a convenience store worker in Florida who hadn’t received her last paycheck from her employer. They left seven messages about the case, which all went unreturned. And in yet another case, the GAO’s fictitious employer admitted that the worker in question was owed money but simply refused to pay it. The wage-and-hour department accepted that, and told the worker to file a lawsuit if he or she wanted to pursue it further.  

Investigators waited more than a month to start looking into five of the 10 cases created by the GAO. And five of the 10 cases never went into the agency’s database that tracks complaints.

“Of the 115 phone calls we made directly to [wage-and-hour] field offices, 87 went directly to voicemail,” the report states.

Worker advocates often complain that the wage-and-hour division is chronically underfunded and not equipped to fulfill its obligations. And, in fairness, the division has surely come up short under the leadership of both Democratic and Republican administrations. But when the GAO performed its audit, Chao had been leading the Labor Department for nearly eight years, giving her ownership of the agency’s performance.

When the GAO released its report, former Rep. George Miller (D-Calif.) said on the House floor that the Labor Department had “dropped the ball” when it came to defending workers from wage theft. He also accused Chao of being “absent without leave.” Chao was no longer at the department when the 2009 hearing took place.

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