Caught on Tape: Government Ineptitude

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.

VIDEO: An undercover investigation exposes labor agencys ineptitude.Play

Click below to listen to the EXCLUSIVE undercover phone calls:
GAO RECORDING: Fictitious Complainant 1

GAO RECORDING: Fictitious Complainant 2

GAO RECORDING: WHD Discourages Complaints

GAO RECORDING: Investigator Lies to Fictitious Complainant

GAO RECORDING: WHD's Complaint Intake Process

GAO RECORDING: Child Labor Complaint

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.

Complaint Never Followed Up On

The official never logged that complaint into the Labor Department's system, and it was never followed up on, GAO found.

In other cases, the undercover callers were put on hold, brushed off, told they couldn't be protected.

"You're sure you just don't want to have a nice conversation with him yourself?" one Labor official told an undercover GAO investigator who called the hotline about his fictitious boss.

"No, no, I don't want to, because he gets very loud and angry," the investigator responded.

"Okay, well, here's another avenue you can pursue. Okay, do you have another job lined up?" the Labor official asked. The undercover investigator said he did not.

"Okay, you might want to do that before you file a complaint with us, because I can't guarantee that he's not gong to fire you," the Labor official advised.

Click here to listen to the call.

'Absolute Outrage'

"That is an absolute outrage that we have workers going to work every day, and they have no protection from the government to ensure that they get paid," said Kim Bobo, author of "Wage Theft in America" and a workers' rights advocate with the Chicago-based group Interfaith Worker Justice.

The undercover investigators also called in a complaint about what would have been a serious child labor law violation.

Caller: "They seem to be working all day, probably during school they're working on some heavy type of equipment, like I guess you call them circular saws. And the ones, uh, the machine that makes hamburger meat." The complaint was never recorded or pursued.

Click here to listen to the call.

GAO called Labor's efforts "ineffective," and found it suffered from "serious recordkeeping flaws" that made it appear to function better than it does.

"Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn," investigators concluded.

In a statement, incoming Labor Secretary Hilda Solis said she took the GAO findings "very seriously."

"I am committed to ensuring that every worker is paid at least the minimum wage, that those who work overtime are properly compensated, that child labor laws are strictly enforced, and that every worker is provided a safe and healthful environment," Solis said, noting that the Wage and Hour Division is boosting its investigative staff by more than a third.

Mark Wilson, a senior Labor Department official under former president George W. Bush, defended his agency's efforts against GAO's criticism. "We emphasized strong, effective enforcement, particularly for those workers who were most vulnerable." Wilson blamed any shortcomings on a lack of funding. "We stand by our enforcement results by [the] Wage and Hour [Division], given the level of resources enacted by Congress."

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