"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.
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."