Caught on Tape: Government Ineptitude

March 25, 2009— -- Every year, bosses steal what could be billions in wages from their workers – and the federal government has largely failed to protect employees from such abuse, an undercover investigation has found.

The government agency that's supposed to protect those American workers, the Department of Labor's Wage and Hour Division, is a miserable failure, concludes the Government Accountability Office.

Since last July, GAO investigators have been secretly testing the division, reporting fictional employer malfeasance and tracking the government's failure to follow up on their complaints.

In Louisiana, Lynne Krause says her employer cheated her out of tens of thousands of dollars in overtime pay. But it took her six months just to get a federal investigator on the phone. And it was another six months before the Wage and Hour Division finally got her some -- but nowhere near all -- of the money she says she was owed.

"It was like, 'don't call us, we'll call you, leave me alone so I can do my job,'" Krause said. "And almost everyone I talked to talked about how understaffed and overworked they were."

The handling of her case by the Department of Labor is all too typical, according to House Education and Labor Committee Chairman George Miller (D-CA).

"This is a massive failure of government," Miller told ABC News. At a hearing later today, Miller will reveal undercover audio tapes GAO investigators made in kind of a sting he authorized on the Department of Labor.

Congressional investigators set up fake companies and posed as employees who had been cheated, or saw violations of child labor laws. Their complaints largely fell on deaf ears at the Department of Labor, as their complaints languished, and Labor officials discouraged complainants from pursuing their claims.

"We have a backlog right now of like eight months. Eight to ten months," one Labor official told a GAO complainant in an exchange recorded by investigators. "We're not even going to be starting an investigation until eight to ten months."

Click here to listen to the call.