Purpose

To determine whether the Department of Labor (Department) is efficiently utilizing its resources to undertake and complete wage theft investigations timely and whether these efforts are successful in recovering funds for injured workers. Our audit covered the period April 1, 2011 through December 20, 2013.

Background

The Department's mission is to protect workers, assist the unemployed and connect job seekers to jobs. Its Division of Labor Standards (Division) is committed to safeguarding New York State workers through vigorous enforcement of State Labor Laws, including the 2011 Wage Theft Prevention Act, established to reinforce protection of workers against unfair and/or illegal employment and wage practices. By enforcing these laws, the Division seeks to promote future compliance by the employers under investigation.

As the investigative and restitution arm of worker and wage protection, the Division conducts wage theft investigations on behalf of workers who file wage dispute claims against employers, and helps to collect unpaid wages, withheld wages, and illegal deductions. In 2013, the Division recouped nearly $23 million in wages and interest on behalf of more than 12,700 employees.

Key Findings

• The Division does not complete wage theft investigations timely. As of August 26, 2013, the Division had a caseload of 17,191 cases, including 9,331 active investigations and 7,860 cases pending payment. Of these, 12,938 cases (75 percent) had been open more than one year since the initial claim was received.
• The Division's Workforce Protection Management system does not provide management with accurate or useful case management reports.
• Employers may be allowed a payment plan for restitution, but the Division has not established criteria to guide eligibility or payment terms.
• The Division does not maintain a centralized record of all payment plans in effect, and neither the Division nor its districts have adequate controls in place to track and monitor employer compliance.

Key Recommendations

• Develop effective strategies to reduce the case backlog and complete new cases sooner.
• Work with Information Technology Services to correct the current case management reports and develop new reports to better manage the current cases and backlog.
• Develop criteria for investigators to use to determine if a payment plan should be granted.
• Establish specific payment plan procedures and update the policies and procedures manual accordingly.

Other Related Audits/Reports of Interest

Department of Agriculture and Markets: Food Safety Monitoring (2013-S-27)
Department of Labor: Assessment and Collection of Selected Fees and Penalties (2010-S-70)